Global demand for crude could see a bigger increase in 2023 than traders and analysts had projected as the Chinese economy fully reopens and the world moves beyond the Covid pandemic, assesses founder of Andurand Capital and one of the world’s leading oil traders, Pierre Andurand, on Thursday, as cited by finance media Marketwatch.

”If demand came back to trend in 2023, that would mean a demand growth of 4.6 mbd (million barrels a day) vs 2022, way above most analysts expectations of 1-2 mbd demand growth,” writes Andurand on Twitter, according to Marketwatch.

Andurand has looked at the large negative effect on oil demand from the pandemic compared to the long-term trend, with previous falls in demand showing a rapid return to trend.

A full return to trend may not come about, says Andurand, with reference to increasing expansion of electric vehicles, which could cut off 600,000 barrels per day from oil demand.

Andurand also points out that Russia’s invasion of Ukraine has provided a shock that could entail a reduction in demand of 300,000 barrels per day.

This could be countered by increased traveling and a shift from natural gas to oil.

“So, overall, the potential to see a surge of oil demand of 3-4 mbd sometime in 2023 is there, assuming the world reopens fully,” he calculates.

US reference oil WTI traded at USD 77.93 per barrel on Thursday afternoon, an increase of 3% this year and roughly USD 14 below the price of USD 92.1 per barrel on Feb. 23, the night before Russia’s invasion of Ukraine.

Energy stocks have performed markedly better than the market in general with an increase of 58% for energy stocks in the S&P 500 index, which has dropped by 19% this year.

Previously in December, Andurand Capital’s largest fund reduced its progress this year to 50%, according to Bloomberg News.

Oil slides lower as rising virus numbers in China douse forecast demand