Oil Prices Threaten to Hit $100 a Barrel With Chinese Demand Soaring - Bloomberg

Oil Prices Threaten to Hit $100 a Barrel With Chinese Demand Soaring - Bloomberg

As Covid-19 lockdowns gripped the world in 2020, Bernard Looney, chief executive officer of BP Plc, made a startling admission: He thought that oil demand might never return to its pre-pandemic peak. But recently, Looney has done an about-face.

After announcing ambitious plans to cut emissions, BP, one of the world’s top crude producers, is now plowing more money into fossil fuels. Oil consumption is heading for a record this year, according to the International Energy Agency, which advises major economies. Supply — buffeted by Russia’s invasion of Ukraine, a slowdown in US shale growth and lackluster investment in production — can’t keep up.

It all comes down to China: The world’s second-biggest oil consumer is snapping up crude after reversing its strict Covid-19 policies. Against a backdrop of tight supply, the demand boost has everyone from Goldman Sachs Group Inc. to trading powerhouse Vitol Group predicting a rally to $100 a barrel later this year.

“The demand from China is very strong,” Amin Nasser, CEO of Saudi Aramco — the world’s biggest oil company — said in a March 1 interview in Riyadh.

By the second half of the year, analysts say, the market will face a shortage — a scenario that will loom over the industry leaders meeting this week in Houston for CERAWeek by S&P Global, a major annual energy conference.