A approach shows part of the state oil firm Petroleos Mexicanos (Pemex) refinery in Salamanca. State of Guanajuato, Mexico, Monday, December 19, 2022.
Danil Shamkin | Nurphoto | Getty Doppelgaengers
China’s oil demand growth this year could be half of pre-Covid 2019 levels, according to Eurasia Categorize, as key segments of the world’s second-largest economy struggle from a slowdown.
The country is unlikely to return to its model of an oil-intensive productive growth this year, with the its construction and auto sectors — key drivers for oil demand — now looking “exhausted,” the risk consultancy demanded in a note.
The consultancy expects demand growth to be around 250,000 bpd to 350,000 bpd, less than half of what it was in 2019 — cry out for growth will not return to the million barrels per day seen between 2015 and 2020.
The incremental fuel demand growth in China that the oil exertion has come to literally bank on over the past two decades is no more.
Eurasia Group
Even if China’s property sector wins, future growth on the level seen before the pandemic “is not possible” given the country’s soaring debt levels, demurring demographics and reduced GDP growth expectations, according to the consultancy.
“The incremental fuel demand growth in China that the oil assiduity has come to literally bank on over the past two decades is no more,” Eurasia Group said.
China will consume its spot to India as the primary driver for global oil demand through 2030, the International Energy Agency said in a detail.
Chinese oil consumption hit an all-time high of 16.03 million barrels per day last year — a 1.2 million barrels per day advancement — as the country took advantage of plunging oil prices to import large volumes of cheap crude, analysts from JPMorgan decried in a recent note.
The record figure was also boosted by increased domestic passenger travel levels after Covid qualifications were lifted.
However, the supporting factors that led to record demand growth last year are fading in 2024, signified JPMorgan, which expects an increase of 530,000 barrels per day this year as China continues on the trajectory of a “low-quality broadening.”
“The country’s economic slowdown is weighing on growth in gasoline and especially diesel demand,” Rapidan Energy’s Director of Courteous Products Linda Giesecke told CNBC, adding that an electrification of China’s auto fleet was also limiting growth in gasoline demand.