MRC -- China's oil demand growth is likely to ease in the first half of 2024 to around 4%, according to consultancies, with resurgent consumption from the aviation and petrochemical sectors offset by weaker diesel usage due to an ongoing property sector crunch, said Hydrocarbonprocessing.
Slowing demand growth for the world's biggest oil importer comes amid what remains an uncertain outlook for the Chinese economy and as travel patterns normalise following the post-COVID rebound earlier in the year.
The Organization of Petroleum Exporting Countries foresees Chinese demand averaging 16.41 million barrels per day (bpd) in the first half of 2024, up 3.2% on 2023 levels, while the International Energy Agency (IEA) forecasts demand averaging 17.1 million bpd for the full year, to show 3.9% growth.
Even though China's economy has made a faltering recovery this year, oil consumption was still on course to set record highs, having been subdued between 2020-2022 by strict COVID curbs. OPEC and the IEA expect China's oil demand to show growth in 2023 of 7.6% and 12.1%, respectively.
OPEC has dismissed fears of that demand growth for oil in China is fading, describing negative sentiment as "overblown" in a recent report. OPEC's forecasts show China accounting for 24.6% of global oil demand growth in the first half of 2024, according to Reuters calculations.
The OPEC+ group, which includes allies such as Russia, on Wednesday unexpectedly delayed an upcoming ministerial meeting expected to discuss output cuts as producers struggled to agree on production levels, sources said. Consultancies Wood Mackenzie, Rystad Energy and Energy Aspects respectively forecast China's first-half 2024 oil demand to grow by 3.7%, 4.0% and 4.4% versus the same period in 2023.
Their growth forecasts for the first six months range from about 578,000 bpd to 700,000 bpd to total between 16.2 million and 16.82 million bpd. China does not provide official data on oil consumption or inventory levels, and the private growth forecasts use different bases of comparison.
The forecasts put expected growth next year marginally below pre-pandemic rates, when China's oil demand grew at an average of 4.5% between 2016 and 2019, according to Reuters calculations using IEA data for full year growth.
We remind, the European Parliament voted on Wednesday in favour of a new law aimed at reducing packaging waste and boosting recycling across the EU. The legislation was overseen by Belgian MEP Frederique Ries (MR/Renew) and passed with 426 votes in favour, 125 against, and 74 abstentions.