Gulf Oil and Gas accountACCOUNT

China Oil Demand in September 2012

Source: OPEC 11/4/2012, Location: Asia

Chinese oil demand weakened this summer to almost a stand-still level. This was caused mainly by the slowdown in the industrial sector, which fell heavily as a result of slower exports. Diesel, fuel oil and other industrial product usage slid down by a substantial amount. Fuel oil imports in August sank by 37% y-o-y as a result of weak orders from several refineries and slower bunker demand.

Diesel consumption grew between September 2009 and last May; hence, China added almost half a million barrels of diesel to its consumption pool. Nevertheless, despite the minor decline since May, the country’s diesel demand grew by 1% in the year-to-date. Diesel is the most consumed petroleum product in China, totalling 3.3 mb/d, and its consumption is attributed to the industrial, transport and agricultural sectors. The country’s slowing economy caused its August oil demand to grow by a slight 40 tb/d y-o y, the slowest rate since March 2009. Oil demand growth is forecast at 0.3 mb/d in 2012 y-o y. Should the country’s industrial slowdown persist, then the downward risk will be higher than anticipated.

The country’s latest reduced energy use is not the result of its newly adopted energy savings plan, but rather a consequence of the the economic situation. Part of China’s recent energy strategy consists of efficiency and equal distribution to all regions. Furthermore, the country has delayed its decision to alter the domestic retail petroleum pricing mechanism, for political reasons. The new mechanism would adopt changes in international oil prices if these exceeded 2–3% within 10 days, instead of 4% within 22 days. Should this new mechanism be adopted in the near future, then the country’s total oil consumption would be slightly affected.

Data from the China Association of Automobile Manufacturers shows that China's automobile sales grew at 8.3% in August, y-o-y, while overall sales for the first eight months in 2012 rose by only 4.1%. A number of factors still impose a strong downside risk, as far as the development of the Chinese auto market during 2012 and 2013 is concerned. Factors such as fuel price rises and a slowing economy are discouraging consumers from purchasing new vehicles. Moreover, some Chinese cities in East- Central China, such as Nanjing and Hangzhou, plan to require cleaner gas and diesel, whereas cities near the coast, from Dongguan and Shenzhen in South-eastern China to Wuxi and Suzhou in the Middle and Beijing in the north, are pushing out polluting factories. Others, like Xi’an and Urumqi in North-Western China, are banning and scrapping cars built before 2005, when automotive emission rules were less stringent. These are some of the reasons why the auto industry will not develop as fast as it has in the last few years, with 2013 being projected to see an increase of around 11%.

Financials and Investment News in China >>

Saudi Arabia >>  9/15/2019 - Oil prices could spike when markets open Monday as Saudi Arabia scrambles to repair damage to its energy infrastructure inflicted. About 5.7 million b...
Saudi Arabia >>  9/14/2019 - Saudi Aramco emergency crews contained fires at its plants in Abqaiq and Khurais, as a result of terrorist attacks with projectiles. These attacks res...

United States >>  9/11/2019 - Pemex announced today a series of measures intended to improve its financial condition. This operation considers a capital contribution from the Feder...
Mozambique >>  8/22/2019 - The board of directors of the Export-Import Bank of the United States (EXIM) voted to notify the U.S. Congress, pursuant to the EXIM charter, of its c...

Azerbaijan >>  1/29/2019 - SOCAR contributed AZN 1.65 billion to the State Budget for 2018. Compared with the previous year’s figures, the company's budget payments grew by AZN ...
Egypt >>  9/25/2014 - Egypt's state-run Egyptian General Petroleum Corporation (EGPC) declared that Egypt received a share of the foreign partner’s oil and gas revenues of ...

Related Categories: Accounting, Statistics  Acquisitions and Divestitures  Asset Portfolio Management  Economics/Financial Analysis  General  Industrial Development  Insurance  Investment  Mergers and Acquisitions  Risk Management 

Related Articles: Accounting, Statistics  Acquisitions and Divestitures  Asset Portfolio Management  Economics/Financial Analysis  General  Insurance  Investment  Mergers and Acquisitions  Risk Management 

China Oil & Gas 1 >>  2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 | 13 | 14 | 15 | 16 | 17 | 18 | 19 | 20 |

More News

Related Links

Gulf Oil and Gas
Copyright © Universal Solutions All rights reserved. - Terms of Service - Privacy Policy.