Here’s 10 Things to Watch in Energy Markets in 2023

Energy has rarely been out of the news over the last year. From Russia’s invasion of Ukraine convulsing oil and gas markets, to big-power politics around OPEC+, a surge in interest in renewables, and in December a landmark US breakthrough in nuclear fusion research. BloombergNEF has analyzed these and other key developments, and here we look forward to what might be coming in 2023.

China’s oil demand declined in 2022 for the first time this century as the nation jumped from one lockdown to the next. With the giant energy consumer easing its Covid-19 restrictions, the potential for growth is enormous, pressuring an already tight and turbulent market. Chinese demand grew to 15.4 million barrels per day (b/d) in 2021 from some 11.3 million b/d in 2015. Over the period, it added millions of gasoline-consuming cars – equivalent to 3.7 times Germany’s total car fleet, and rapidly expanded its petrochemical sector. In 2022, consumption of oil in the industrial sector boomed as gas prices spiked, and with economics for oil burn favorable in 2023 despite declining spot LNG prices, demand looks set to remain strong. As road and air traffic rebound, the International Energy Agency estimates China’s 2023 oil demand to climb by about 0.78 million b/d, eclipsing any previous annual growth. The speed at which China returns to normality will dictate the shape and level of oil prices in 2023. -Philip Geurts, oil analyst.