Not Logged In, Login,

Wednesday, December 13, 2017

Variations in projections for Chinese demand growth in 2005, but all show continuing strength

Petroleum Intelligence Weekly (PIW) has published an overview of different projections for oil demand growth in China in 2005. These range from the International Energy Agency’s (IEA’s) projection of 5.5% growth to 6.69 million barrels daily (mbd) oil demand, to Merril Lynch’s projection for oil demand growth of 10.2% to 6.89 mbd oil demand. In between are Goldman Sachs and Deutsche Bank.  

They all also have different demand figures for 2004 with the IEA the highest at 6.333 mbd and Merril Lynch the lowest at 6.25 mbd. Chinese oil demand jumped 16.9% — or nearly 0.9 mbd in 2004 to an average of 6.23 mbd, according to PIW’s sister publication Oil Market Intelligence. Domestic crude production of around 3.5 mbd is flat, so imports jumped by 634,000 b/d, or over 35%, in the year through November, to an average of 2.43 mbd. Product imports rose by 33% to 0.804 mbd. Surging demand for electricity boosted the use of fuel oil boilers and diesel-fired generators for back-up, according to PIW.

The three big demand drivers last year — transport, power generation and petrochemicals — will continue to power China's increase in oil consumption this year. The nation’s economy is estimated to have grown 9.2% in 2004, and is expected to grow 8% this year. Investment bankers are increasingly of the view that oil demand will continue to rise at least as fast as gross domestic product (GDP) - which is twice the rate assumed by state planners. Strong growth is boosting demand for transport fuels, and a buoyant agricultural sector is doing the same for gas oil. New electricity is coming on rapidly and should ease the rate of demand growth for fuel oil. Independent power producers, active during the electricity crisis, accounted for only 30% of the rise in fuel oil usage, which means fuel oil imports of at least 0.7 mbd are probably set to stay. 

Contact: Erik Ranheim