LONDON: OPEC on Tuesday further raised its forecast for Chinese oil demand growth in 2023 due to the relaxation of the country’s COVID-19 curbs, although it left the global total steady, citing potential downside risks for world growth.

World oil demand in 2023 will rise by 2.32 million barrels per day (bpd), or 2.3%, the Organization of the Petroleum Exporting Countries said in a monthly report. This was unchanged from last month’s forecast.

While faster Chinese demand could support the oil market, crude prices have fallen this week as the collapse of Silicon Valley Bank has sparked fears about a fresh financial crisis. OPEC flagged potential downside risks for the world economy from rising interest rates.

“China’s reopening, following the lifting of the strict zero-COVID-19 policy, will add considerable momentum to global economic growth,” OPEC said in the report.

“The rapid rises in interest rates and global debt levels could cause significant negative spill-over effects, and may negatively impact the global growth dynamic,” OPEC added.

US senators reintroduce bill to pressure OPEC oil producer group

OPEC expects Chinese oil demand to grow by 710,000 bpd in 2023, up from last month’s forecast of 590,000, although the global total was steady due to downward revisions elsewhere.

The report also showed OPEC’s crude oil production rose in February despite the wider OPEC+ alliance last year pledging output cuts to support the market.

OPEC said its crude oil output in February rose by 117,000 bpd to 28.92 million bpd.