Oil market outlook: rapid recovery in 2023 but still below pre-covid level
- In 2022, China's crude throughput fell by 3.4% YoY to 676 million tonnes because of waning demand for downstream products. Crude throughput for 2023, however, is estimated to rise by 3% YoY thanks to increasing throughput of new refineries and rapid recovery of product demand.
- Crude demand recorded weakening support from oil product markets. In 2022, China's oil product supply and demand both tumbled by about 9% YoY, much steeper than a 3.4% decline in crude throughput. The oil product market was still oversupplied and China continued to export. China is expected to have exported 33.95 million tonnes of oil products in 2022, down by 12.8% YoY. The exports are expected to increase by about 27% YoY to 43 million tonnes in 2023.
- In 2023, the demand for jet fuel and gasoline is expected to show stronger growth than others. On a year-on-year basis, the growth in gasoline, gasoil, and jet fuel demand may go up by 10%, 3%, and 49%, respectively, but still slightly lower than the pre-epidemic levels.
- In 2023, China may continue to standardize the wholesale, storage, and retail of oil product circulation management rules as the key to its regulation on the oil product market, with detailed policies to be issued by provincial governments, then focus on the regulation of the retail market for coming years.
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Written by the GL Consulting team (Mysteel's consultancy arm on energy transition): glconsulting@mysteel.com
Edited by Navy Liu: liuchuanjun@mysteel.com
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