Chinese comeback after lockdown and the mild winter weather

Oil prices fell on Thursday this week after rising to new heights in recent days, as investors remain cautious amid lingering concerns about a global recession. On Friday, prices rose again amid signs of weaker Russian production and stretched supplies as the market awaits the release of the IEA`s monthly oil report to clarify the outlook for global demand. 

Data published this week show that there has been a 22% increase in Chinese oil imports in March 2023, the highest level since June 2020. The increase is due to lower prices and discounted Russian oil, along with a better demand outlook. OPEC has maintained its forecast that the global oil demand would rise by 2.3 million barrels per day in 2023, unchanged from last month. 

Because of below-average demand and sufficient inventories, the US natural gas futures price fell below $2 per MMBtu approximately 10 days ago. That is the lowest price since September 2022. The mild winter and the continuously low demand for natural gas in both commercial and residential sectors has resulted in an expectation from the Energy Information Administration of over 2% less consumption of natural gas in 2023 than in 2022. 

In the beginning of March, we stated that there was an increase in the US LNG export that was one of the drivers for the high US Natural Gas Futures price. It has been reported that the natural gas flows to LNG export plants have been on track to hit record highs after the export plant in Texas, Freeport LNG, became operational again. 

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