However different executives on the Power Asia convention in Kuala Lumpur had been divided, with Malaysia state oil agency Petronas
reporting a slowdown in demand for petroleum and petrochemicals within the second quarter and rising refinery capability placing stress available on the market.
“Regardless of the recession dangers in a number of OECD international locations, the economies of creating international locations — particularly China and India — are driving wholesome oil demand progress of greater than 2 million barrels per day this 12 months,” he advised the convention.
Though China faces financial headwinds, the transport and petrochemical sectors are nonetheless exhibiting indicators of demand progress, he added.
Brent crude futures are down about 14 % because the begin of the 12 months as rising rates of interest hit investor urge for food, whereas China’s promising financial restoration has faltered after a number of months of softer-than-expected consumption, manufacturing and property market knowledge.
Crude oil provides from Russia and Iran have additionally held up regardless of Western sanctions, offsetting manufacturing cuts by Saudi Arabia and different members of the Group of the Petroleum Exporting International locations (OPEC).
Whereas a failed mutiny by mercenaries in Russia over the weekend has raised issues about political instability and pushed up oil costs, not one of the trade executives and officers talking on the primary day of the convention talked about it throughout their onstage remarks.
“There’s not a lot geopolitical affect available on the market now. It’s dominated by economics, not geopolitics,” Daniel Yergin, vice chairman of S&P World, mentioned on the sidelines of the occasion.
“What has occurred to this point this 12 months is the availability facet hasslightly overperformed, significantly Russia, the place there have been
expectations of manufacturing loss on account of the problem getting oil to market due to the sanctions,” he mentioned.
Sazali Hamzah, Petronas’ government vice chairman and CEO ofdownstream, was much less optimistic, saying that demand for
petroleum and petrochemicals began slowing within the second quarter regardless of a restoration in jet gasoline consumption.
He expects new refining capability coming on-line this 12 months to place “loads of stress available on the market.”
“We imagine in second-half of this 12 months we are going to nonetheless see weak de-mand, and that can be prolonged to a part of subsequent 12 months,” he
Wanting forward, Vitol mentioned oil demand might peak round 2030.
“We acquired it peaking in about 2030 and a gradual decline out to 2040 … After which (it’s a) fast decline thereafter because the EV
fleet and vitality transition takes over,” Hardy mentioned.