Energy Aspects founder and director of research Amrita Sen said Friday that she maintains her view that energy prices will move higher in 2023.
Speaking to CNBC, Sen predicted that the economy will show “green shoots” from March onwards and throughout Q2. This will point to much better global growth in the second half of 2023 as demand for oil will surge after China reopens.
“Right now, COVID is rampant but once they come out of it, demand is going to be huge,” she said of China.
The Energy Aspects founder also noted that Russia might have to cut production early next year, which will add a supply pinch to the demand surge expected from China.
Sen added that China’s reopening will have multiplier effects on demand by contributing to oil needs in other countries as well. Specifically, she noted that 25% of Korea’s petrochemical exports depends on China, 20% of Thailand’s tourism depends on China and, in the U.S., 70% of the international flights on the west coast are linked to Asia-Pacific.
With huge amounts of SPR releases from governments around the world, particularly the U.S., and lockdowns in China, there has been “a lot of year end liquidation,” Sen reported.
“We are getting into the year with very very clean positioning,” she concluded.
Meanwhile, oil sector has moved higher during Friday’s intraday trading session: Exxon (NYSE:XOM) +2.3%, ConocoPhillips (NYSE:COP) +3.3%, Valero Energy (NYSE:VLO) +3.4%, Marathon Petroleum (NYSE:MPC) +3%, Phillips 66 (NYSE:PSX) +2.8 and Occidental Petroleum (NYSE:OXY) +2.3%.
Oil Sector ETFs also gaining momentum in Friday’s intraday trading: (XLE), (USO), (UCO), (BNO), (SCO), (DBO), (USL), (DRIP), (GUSH), (NRGU), (USOI).
WTI crude (CL1:COM) +3.35% to $80 in Friday’s intraday action.
Also read: Oil prices rise after inventory report shows bigger-than-expected drawdown.