Most participants are still bullish on crude oil, especially for the second half of 2023.

That’s what analysts at Macquarie Bank Limited noted in a new report sent to Rigzone, which outlined a summary of views from International Energy Week 2023.

Looking at further “key oil market takeaways” the analysts stated in the note that China remains the key regional driver, “with FY23 demand growth estimates ranging from 800,000 barrels per day to two million barrels per day” and that global jet fuel demand growth is the key product driver “with high conviction bulls looking for a massive 1.2 to 1.5 million barrel per day increase this year”.

“Overall, most market participants remain bullish on oil, especially in 2H23. As expected, the single biggest driver of bullish views is the result of large demand growth expectations from China’s reopening,” the analysts said in the report.

“In fact, some estimates of China’s demand increase from reopening were in the 1.5+ million barrel per day range and the high China demand growth estimate was 2+ million barrels per day,” the analysts added.

“Not surprisingly, everyone in the market is allocating most demand growth to jet fuel under the assumption that Chinese air travel recovers to pre-Covid levels and then quickly reaches new highs during the year,” they continued.

In the report, the analysts stated that many funds, oil producers, and refiners were best described as “rangebound bullish, i.e., looking for Brent to trade between $75 and $95 while reaching the high end of the range more frequently than the low end”.

“At the margin, this appears to be the fastest growing category of oil market outlook as it simultaneously incorporates broader macro risks and supply growth alongside Chinese reopening benefits,” the analysts said.

The analysts also noted that some corporates and funds were cautious about the global macro situation “and believed that China’s reopening related demand increase would disappoint”.

“The view was anchored by the notion that global economic pressures would limit demand growth in Chinese and the rest of the world,” the analysts added.

Outlining their view in the report, the analysts said they find themselves inclined to be short-term bullish but added that “global balances are making it difficult to stay the course”.

“Our balances result in 1.5 million barrel per day surpluses during 1H23,” the analysts added.

“However, event risks are largely bullish including the potential that Chinese demand grows by 1.5 million barrels per day versus our 800,000 barrel per day estimate, Russia supply drops sharply, and West and North African production retrace down to 2022 levels,” the analysts continued.

Energy Institute’s International Energy Week took place from February 28 to March 2 at the Intercontinental London Park Lane. Analysts at Standard Chartered also provided an inside view of the event earlier this month.

In its latest oil market report, which was released in February, the International Energy Agency (IEA) noted that global oil demand is set to rise by two million barrels per day in 2023 to 101.9 million barrels per day.

“The Asia-Pacific region (+1.6 million barrels per day), fueled by a resurgent China (+900,000 barrels per day), dominates the growth outlook,” the IEA stated in the report.

“The reopening of borders will boost air traffic. Jet/kerosene demand is expected to increase by 1.1 million barrels per day to 7.2 million barrels per day, 90 percent of 2019 levels,” the IEA added.

The organization’s next oil market report is currently scheduled to be released on March 15.