Alexey Gromov, Principal Director on Energy Studies of the Institute for Energy and Finance, commented on the impact on world oil prices in anticipation of increasing demand for it from the Chinese economy to the TASS news agency:
The expert noted that at the end of last year, the surplus of oil on the world market was estimated at about 1 million barrels per day.
"The rejection of covid restrictions will lead to some recovery of business activity in the country and, accordingly, an increase in demand for oil, especially in air transportation, which were practically frozen. The growth in demand for oil in China is now estimated at the level of 500-700 thousand barrels per day additionally, but it is not necessary to say that this growth will radically change the balance of power in the global oil market," Gromov explained to TASS.
"In other words, the growth that we have the right to expect from the Chinese economy today in terms of oil and petroleum products consumption will lead to the fact that there will be fewer prerequisites for maintaining a surplus of oil on the world market. And, most likely, in the second half of the year, while maintaining the OPEC+ policy, which was announced in November last year about a steady monthly reduction in production by 2 million b/d, there will be a steady supply deficit, then we should expect some kind of growth in oil prices. What is happening with China now will prevent oil quotes from going down," Gromov believes.
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