Oil market highlights: OPEC raises 2023 demand forecast; MENA oil exports drop

Oil market highlights: OPEC raises 2023 demand forecast; MENA oil exports drop

The OPEC expects oil demand in 2023 to reach pre-pandemic levels, touching around 102 million bpd, according to the Secretary General of the group.

In the most recent monthly report, the group raised forecasts for demand growth in the current year for the first time in several months, taking optimism from the reopening of China and strength in the broader East of Suez markets.

The producer group has however been cautious with respect to the downside risks that continue to prevail, including the threat of interest rate hikes and inflation eating into demand. These concerns are likely to prevent the group and partner countries in the OPEC+ from changing the output plans but instead wait and watch the summer gasoline demand before taking a call.

The Dubai Brent EFS spread remained nearly flat through the week but has fallen since the start of the year. The spread is likely to remain narrow as demand for vacuum gasoil (VGO), an intermediate stream used as secondary feedstock increases in refineries, creating a stronger demand for medium crudes. Demand for ME crudes are also expected to remain strong, keeping the Dubai complex supported.

China's UNIPEC is reported to have bought about 7.5 million bbl of April loading