The role of China in oil markets

Key takeaways:

• The sudden abandonment of the zero-covid policy in China has been the main factor shaping oil markets at the beginning of this year.
• However, while most forecasts expect an upward pressure on oil prices, the Chinese factor should not be taken for granted. A recession in other economic powerhouses, such the United States and the European Union, could outweigh the positive effect.
• There is a diverging view on the outlook of the world economy for 2023 between private investors and public institutions. For instance, both the World Bank and the International Monetary Fund (IMF) have a negative outlook for the world economy for 2023, warning that the worst is yet to come. In contrast, the bulls of Wall Street believe the worst is already behind us. Such a dichotomy reflects the sheer uncertainty still ahead of the global economy and oil markets this year.