Search the site

Author Yessica Dames

Senior Consultant View profile
China's lockdowns will contribute to-main image

China’s prolonged Covid-19 lockdowns, coupled with a weaker global economic outlook, have taken a toll on oil prices in recent weeks.  Futures prices for ICE Brent were trading at around $105/bbl as this report went to print. This represents a drop of 18% since the price spike in early March caused by Russia’s invasion of Ukraine. As per the Energy Information Administration (EIA), China’s demand dropped by 0.46Mbbl/d (2.9% m/m) in March, the month when the Omicron variant became widespread in China.

A weaker global economic outlook along with China’s outbreaks have led to a 0.81 Mbbl/d (0.8%) downside revision to 2022 global oil demand. Demand is now expected to average 99.80 Mbbl/d this year.

Despite these downside forecasts revisions, the oil market remains tight. On the demand side, the EIA still expects the global demand to grow 2.5% y/y this year, as activity continues to recover from the pandemic. Meanwhile, on the supply side, oil markets are struggling to offset a reduced flow from Russia. OPEC+ is failing to meet output targets, exacerbated by recent disruptions in Libya. An embargo by the EU would further tighten the market. Global inventory is at its lowest level since 2014. We expect these dynamics to keep oil prices above the $100/bbl level throughout the end of 2022 Q3.

These and other developments that will determine the future path of oild demand and the impacts on the commodity markets are discussed with CRU subscribers regularly. To enquire about CRU services or to discuss this topic in detail, get in touch with us.

CRU experts discussed the impact of the war in Ukraine on commodity markets in a recent webinar. experts from all major commodity areas joined CRU’s Head of Economics and an energy specialist to appraise markets one month on from the invasion of Ukraine. The webinar is available to watch on demand here.

Explore this topic with CRU

Author Yessica Dames

Senior Consultant View profile

The Latest from CRU


India Commodities Briefing 2024

We are delighted to invite you to the annual CRU India Commodities Briefing, a landmark event where industry leaders, analysts, and consultants come together to share...

13 March 2024   
Topics: Aluminium, Aluminium Raw Materials, Copper, Steel, Steelmaking Raw Materials, Sustainability, Wire and Cable


South Korea’s pivotal role in the battery supply chain

Topics: Battery Materials, Cobalt, Lithium, Nickel