Chinese oil demand expected to fall by 1.2 million barrels per day in April
Oil demand from the world’s largest crude oil importer, China, is expected to decline by 1.2 million barrels per day (bpd) in April from a year ago – the biggest hit to demand since the lockdowns from Wuhan at the start of the pandemic, Bloomberg reported Friday, citing sources with insider knowledge of China’s energy industry.
Chinese demand for gasoline, diesel and jet fuel is expected to drop 20% this month from April 2021 consumption, Bloomberg sources say, as authorities continue to pursue a ‘zero COVID’ policy imposing strict lockdowns, including one that has lasted for weeks for 26 million residents of Shanghai’s financial hub.
Gasoline demand is expected to be hit the hardest as millions are confined to their homes, while agricultural activities partially offset lower demand for diesel due to lower demand from the trucking industry.
Mainly due to the Shanghai lockdown, gasoline demand in eastern China has already fallen by around 40% so far in April, Chinese oil executives told Bloomberg.
Shanghai authorities announcement Friday that they would tighten already tough restrictions, including placing electronic door alarms to prevent people infected with COVID from leaving and evacuating people to disinfect their homes.
Chinese refiners expected to cut their refining runs in April at the largest scale – by 900,000 bpd –since the start of the pandemic as new COVID-related lockdowns weigh on fuel consumption.
Last week, OPEC and the International Energy Agency (IEA) cited weaker Chinese demand as a key factor – alongside Russia’s war in Ukraine – in their forecasts for lower demand. oil world.
Oil demand is expected to average 99.4 million bpd this year, the IEA said, cutting its demand outlook for 2022 260,000 bpd to reflect the return of severe lockdowns in China. OPEC also reduced its estimate of oil demand growth for 2022 of nearly 500,000 bpd due to lower expected global economic growth with the Russian war in Ukraine and the return of COVID lockdowns in China.
By Tsvetana Paraskova for Oilprice.com
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