OPEC sees oil stocks rising, 'healthy' start to year for demand

Global oil demand grew by a "healthy" 2.1 million b/d in the first quarter 2023 with the pace set to increase in Q2 and Q3, while tightness in product markets shows signs of easing, OPEC said in its monthly oil market report April 13.

In its latest report, OPEC left its global demand growth forecast for 2023 unchanged at 2.3 million b/d, with a slight downward revision for the OECD offset by an upward revision for non-OECD countries.

It also left its estimate of demand for OPEC crude in 2023 — also known as the "call" on OPEC crude — unchanged from its previous report at 29.3 million b/d.

In Q1 2023, "world oil demand is estimated to have grown by a healthy 2.1 million b/d year-on-year on the back of a strong rebound in China's oil demand, as well as solid oil demand data in other non-OECD regions, particularly the Middle East and Asia," the report said, going on to forecast year-on-year growth of 2.4 million b/d in Q2, 2.5 million b/d in Q3 and 2.3 million b/d in Q4 of 2023.

It estimated OPEC crude oil production had fallen by 86,000 b/d to 28.80 million b/d in March.

In terms of oil stocks, OPEC said commercial inventories in the OECD had risen by 14.1 million barrels in February to 2.87 billion barrels, some 18 million barrels above the five-year average, but 54 million barrels below the 2015–2019 average.

"OECD commercial inventories have been building in recent months, and product balances are less tight than seen at the same time a year ago," OPEC said.

The OPEC report was also relatively bullish on Russian production in the face of sanctions compared with some other sources, saying Russian liquids production had risen by 175,000 b/d to 11.4 million b/d in February, comprising 10 million b/d of crude and 1.4 million b/d of natural gas liquids and condensate.

The report follows the surprise April 2 announcement of additional production cuts by the OPEC+ producer group, described in the report as a "relentless and determined" effort to support the stability of the oil market.

The report precedes the rival monthly oil market report of the International Energy Agency, published April 14.

The latest Platts survey by S&P Global Commodity Insights found that OPEC crude output decreased by 60,000 b/d to 28.97 million b/d in March, while non-OPEC allies in the OPEC+ group saw output fall by 240,000 b/d to 13.40 million b/d.

Crude prices have recovered significantly since the April 2 production cut announcement. Platts, part of S&P Global, assessed North Sea benchmark Dated Brent at $88.21/b on April 12, up $2.13 on the day.