Asia to drive oil demand growth in second half

DUBAI, May 22 (Reuters) – Asia will lead oil demand growth of around 2 million barrels per day (bpd) in the second half of the year, a senior executive at Vitol (VITOLV.UL) said on Monday, an increase that could potentially lead to a shortage of supply and drive up prices.

$75

International benchmark Brent crude has fallen to around $75 a barrel from a peak of nearly $140 in March last year, just after the disruption caused by oil producer Russia’s invasion of Ukraine.

OPEC+

Prices have drawn support from surprise voluntary output cuts by some members of the Organization of the Petroleum Exporting Countries and allies, including Russia (OPEC+) anounced in April. The group meets again on June 4 to review output policy.

2 million bpd

“We are going into the second half of the year where, largely thanks to Asian demand growth, the world is going to need about 2 million bpd more than it needs now,” Mike Muller, Vitol Asia president, told the Middle East Petroleum & Gas Conference in Dubai.

“For those of you asking whether OPEC+ needs to take more off the market or not, I will then let you draw your own conclusions,” he said.

Muller’s view echoes remarks from the International Energy Agency, which shortly after OPEC+ announced its output cut in April, said the producer group risked exacerbating an oil supply deficit expected in the second half of the year.

About E. J. McKay

E.J.McKay is a Shanghai-headquartered investment bank with a special focus on mergers & acquisitions. We are one of the most long standing independent investment banks in China, with core business of mergers & acquisitions and financing advisory.