Is China’s Oil Demand Set For A Major Bounce Back?
- China’s extraordinary economic expansion almost singlehandedly drove a supercycle in key commodities since the mid-90s.
- This robust performance across several major sectors in China’s economy is in sharp contrast to the growth drivers seen last year.
- China continues to buy oil from Russia and Iran at a discounted price.
Since the mid-1990s, China’s extraordinary economic expansion almost singlehandedly drove a supercycle in key commodities prices it required to power such growth, including oil and gas. In 2013, it became the world’s largest net importer of total petroleum and other liquid fuels and, as late as 2017, its still high rate of economic growth allowed it to overtake the U.S. as the largest annual gross crude oil importer in the world. Late 2019 saw much of this activity grind to a halt as Covid hit the country, and the economic slowdown was exacerbated by its Draconian ‘zero-Covid’ policy that saw complete shutdowns of major economic centres at the slightest hint of infection. However, 2023 saw it achieve its official gross domestic product (GDP) growth target of “around 5 percent” – posting 5.2 percent in the end. The same official target is in place this year, with the key questions for oil markets being whether this will be achieved and if so, how easily?
16 April saw China’s National Bureau of Statistics release the country’s Q1 GDP figure, which showed a 5.3 percent year-on-year increase. This was way above consensus analyst expectations of 4.6 percent and was also a rise from the Q4 2023’s 5.2 percent. “Aside from the continued decline in the property sector, policy support is filtering through investment,” Eugenia Victorino, head of Asia strategy for SEB in Singapore exclusively told OilPrice.com. “With property sales now 60 percent lower than their mid-2021 peak, transaction volumes are now comparable to levels last seen in 2012,” she added…
…click on the above link to read the rest of the article…
