Heading into 2023 and the key area of market uncertainty is shaping up to be on the demand side. Despite the deteriorating global economic picture, Opec and the IEA both see strong demand growth in 2023 requiring Opec to markedly increase production by end-2023 to avoid shortages. The US EIA however takes a very different outlook, with demand staying broadly flat through the year. Navigating this murky path will be no easy task.
Ironically, the EIA, in its latest Short Term Energy Outlook (STEO), is the most bullish of the three organizations when it comes to the near-term outlook. Both Opec and the IEA project global demand declining between the current quarter and 1Q 2023, but the STEO forecasts a robust 540,000 b/d increase. From there however, the picture changes dramatically. The EIA sees Q1 as the 2023 high point for global demand, while Opec and the IEA see incredibly strong growth of around 3mn b/d over the course of 2023, with both forecasting demand exiting the year at 103.4mn b/d (see chart). (CONTINUED - 863 WORDS)
