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World Oil Demand

40

OPEC Monthly Oil Market Report – September 2017

China

In July,

Chinese oil demand

continued to grow at a very healthy pace, rising by around 0.69 mb/d or around

6% y-o-y. Total oil demand reached 11.67 mb/d during the month. Year-to-date data indicates average

growth of 0.55 mb/d, more than doubling the growth recorded during the same period in 2016 of 0.21 mb/d

y-o-y.

The current solid pace in Chinese oil demand comes primarily from increasing LPG as a petrochemical

feedstock as well as fuel oil, jet/kerosene and gasoline, with gains of more than 20%, 16%, 13% and 4%

y-o-y, respectively. LPG demand rose by a massive 0.3 mb/d y-o-y with total consumption reaching

1.78 mb/d as ongoing demand from the petrochemical sector provided strong support. Healthy demand

growth for LPG is anticipated to continue until the end of the year, despite a possible seasonal slowdown

towards the end of 3Q17. Fuel oil consumption rose by 69 tb/d from July 2016 levels. This is largely

attributed to stronger-than-expected economic growth leading to higher demand in the petrochemical and

power sectors.

Gasoline demand was higher by around 0.10 mb/d y-o-y, once more motivated by robust sport utility vehicle

(SUV) sales and warm weather. Vehicle sales rose during the month of July, adding around 4% y-o-y with

total sales reaching 1.7 million units. SUV sales also rose substantially, adding around 17% compared with

one year ago. On a cumulative basis, with data up to July, the sale of passenger cars reached 12.9 million

units, up by 2% from the same period in 2016. Jet/kerosene demand rose by 87 tb/d y-o-y continuing its solid

performance in 2017 as domestic air traffic improved over the summer holiday travelling season, with a

similar trend anticipated in August.

Graph 4 - 13: Chinese apparent oil demand,

y-o-y change

Graph 4 - 14: Chinese diesel oil and gasoline

demand, y-o-y change

Projections for 2017 oil demand

development in China improved from last month’s report due to solid

performance in 1H17. In 2018, projections based on transportation and industrial fuels are to rise next year,

though slightly lower GDP growth is expected compared with 2017 at 6.3%. Ongoing fuel quality

programmes target fewer emissions and the continuation of fuel substitution with natural gas.

Chinese oil demand

for 2017 is projected to rise by a firm 0.39 mb/d, while 2018 demand growth is

estimated to be 0.35 mb/d.

-500

-250

0

250

500

750

1,000

-500

-250

0

250

500

750

1,000

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

tb/d

tb/d

Historical range

Historical average

2016

2017

Sources: Argus Global Markets, China OGP (Xinhua News

Agency), Facts Global Energy, JODI, National Bureau of

Statistics of China and OPEC Secretariat.

-400

-200

0

200

400

Jul 16

Aug 16

Sep 16

Oct 16

Nov 16

Dec 16

Jan 17

Feb 17

Mar 17

Apr 17

May 17

Jun 17

Jul 17

tb/d

Gasoline

Diesel oil

Sources: Facts Global Energy, China OGP (Xinhua News

Agency), Argus Global Markets, JODI, National Bureau of

Statistics, China and OPEC Secretariat.