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World Oil Demand

36

OPEC Monthly Oil Market Report – November 2017

China

According to the latest available data, September 2017

Chinese oil demand

growth registered significant

gains y-o-y, with demand growth estimated at more than 0.70 mb/d and total consumption reaching

12.2 mb/d. Increasing gasoline and jet fuel requirements for the transportation sector, in combination with

rising LPG and fuel oil demand, accounted for the bulk of these gains.

LPG demand leaped strongly to reach 1.78 mb/d as propane dehydrogenation capacity (PDH) plants’

margins were healthy enough to increase their utilization rates. Additionally, two plants (Dongming Qianhai

and Guangxi Yuchai Chemical) with a total LPG intake of around 0.7 mtpy have commenced operations in

September, further boosting requirements.

Gasoline demand was higher by a staggering 0.24 mb/d y-o-y with support from healthy sport utility vehicle

(SUV) sales. According to the China Association of Automobile Manufacturers (CAAM), total vehicle sales in

September increased by around 5.4% y-o-y, resulting in higher y-t-d sales up to September by around 5.5%

as compared to the same period last year. Passenger car sales increased in September by 2.7% y-o-y

slightly lower than the growth seen a month earlier at 4.1% y-o-y. Commercial vehicle sales, on the other

hand, rose substantially in September, up by 24.3% y-o-y. Cumulatively with data up to September, more

than 21 million units were sold in 2017.

Diesel oil demand increased in September compared with the same month a year earlier by around

0.24 m/d, or 9%, y-o-y, mostly due to better-than-expected industrial activities, the end of the fishing ban and

easing of environmental and safety checks. Jet fuel demand surged in September, rising by around 63 tb/d,

or around 10%, y-o-y, mainly a result of higher-than-expected air travel during the month.

Graph 4 - 7: Chinese apparent oil demand,

y-o-y change

Graph 4 - 8: Chinese diesel oil and gasoline

demand, y-o-y change

For

2017

, projections for oil demand development in China are at higher than in the previous month’s report

based on very strong data for September. In

2018,

oil demand growth is foreseen rising firmly, albeit at a

lower level than in the current year. The transportation sector will continue to show robust growth, supporting

gasoline and jet fuel oil. The petrochemical sector is forecast to continue growing as new PDH plants are

expected be commissioned in 2018, supporting LPG demand growth. Conversely, a continuation of fuel

quality programmes targeting fewer emissions, further usage of new digital applications/software promoting

vehicle/bicycle sharing and the ongoing fuel substitution with natural gas and coal are expected to limit

demand growth in 2018.

Chinese oil demand

is projected to grow by 0.46 mb/d in 2017 and is forecast to grow by 0.41 mb/d in

2018.

-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.

-200

0

200

400

Sep 16

Oct 16

Nov 16

Dec 16

Jan 17

Feb 17

Mar 17

Apr 17

May 17

Jun 17

Jul 17

Aug 17

Sep 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.