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Live news: UK house prices report first monthly decline since October 2021, ONS says

China ditched its controversial zero-Covid coverage in December © REUTERS

Global oil demand is about to rise to an all-time excessive in 2023 after China relaxed its Covid-19 restrictions in a transfer that might drive crude prices greater within the second half of the 12 months, in line with the International Energy Agency.

“Two wild playing cards dominate the 2023 oil market outlook: Russia and China,” the IEA stated in its first monthly oil report of the 12 months. “This 12 months may see oil demand rise by 1.9mn b/d to succeed in 101.7mn b/d, the very best ever, tightening the balances as Russian provide slows underneath the complete affect of sanctions.”

Russian oil provide had “held regular” in December at 11.2mn b/d regardless of EU sanctions.

However, the Paris-based IEA forecast that the “well-supplied” international oil market in the beginning of the 12 months may “rapidly tighten” because the western sanctions — notably an EU ban on the import of refined Russian merchandise from February 5 — took full impact.

The IEA stated practically half of the forecast rise in oil consumption this 12 months would come from China although “the form and velocity” of China’s reopening remained unsure.

Beijing’s Covid-19 restrictions, which depressed financial exercise final 12 months, meant that Chinese oil demand in 2022 fell for the first time since 1990, declining by a mean of 390,000 b/d, its largest ever annual decline.

But the loosening of quarantine and testing measures in November, adopted by Beijing’s abrupt choice to desert its zero-Covid regime in early December, had already boosted Chinese consumption, the IEA stated. Chinese oil demand in November rose by 470,000 b/d in contrast with October, in line with IEA knowledge