Oil market tightens as demand moves higher and supply drops.

The latest monthly Oil Market Report forecasts that demand will reach over 102 million barrels per day in 2023. That would translate to an annual rise of 2.2 million barrels per day, with China accounting for more than 70% of the growth.

As we have been warning since the start of the year, the global oil market is tightening as this rise in demand comes up against deepening cuts to output by OPEC+ countries. In July, oil supply from the OPEC+ alliance fell to a near two-year low as a voluntary reduction from Saudi Arabia took effect. The bloc’s production was down more than 2 million barrels per day from the start of the year. Crude oil and oil products inventories have drawn down sharply as a result. And market balances are poised to tighten further into the autumn as Saudi Arabia and Russia extend supply cuts.