Global oil demand has surprised to the upside in recent months. Oil prices hit a 9-month high on Friday after January data showed strong growth in Chinese oil imports. Oil is also supported by tensions in the Middle East and enduring worries about oil supply from the region.
Overall Chinese exports and imports were much stronger than expected, pointing to robust domestic demand and an economic recovery. Global markets have risen in anticipation that a surge in China’s export growth signals recovering demand in the US and the EU. China’s exports to the US were up by 15% and to the EU by 5% from a year ago.
Gas prices strengthened last week on a fall in supply on certain days, ongoing cold weather and a couple of Norwegian outages. Demand will remain slightly above normal this week due to cold weather, and focus will remain on Norwegian supply glitches as the need for deliveries remain.
European demand will see significant year-on-year losses in February due to record cold temperatures last year.
The LNG spot market is tightening, as Nigeria shuts down 45% of output and Egypt cuts off Damietta entirely.
Figure: UK gas demand (Source: Reuters)