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After lifting its tough Covid-19 restrictions, China will drive growth of 1.9 million b/d in global oil demand this year, accounting for nearly half of that increase, the International Energy Agency (IEA) predicts. However, in its latest monthly Oil Market Report, the IEA adds that "the shape and speed of [China's] reopening remains uncertain." The agency estimates that Covid-19 lockdowns caused China's oil demand to fall by 390,000 b/d in 2022, the first such contraction in its annual demand since 1990. But Beijing's abrupt abandonment of its zero-Covid-19 policy has led to a faster-than-expected reopening of the country and prompted analysts to raise their estimates of its oil consumption. With growth led by China and other non-OECD countries, the IEA sees global oil demand setting a new record of 101.7 million b/d this year — an upward revision of 100,000 b/d versus last month's report. The IEA noted that OECD industry inventories stood at 2.779 billion barrels in November — up 37.1 million barrels from a year earlier, but 125.9 million barrels below their five-year average. It said that while the oil market appeared well supplied at the start of this year, balances could tighten quickly as the full impact of Western sanctions hits Russian exports.

Oil Forecasts
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