Stronger economic growth than previously expected and booming demand for petrochemicals will lift China’s oil demand by 1.1% this year, according to state giant China National Petroleum Corporation (CNPC).
Chinese oil consumption is expected to reach 765 million metric tons this year, CNPC’s Economics and Technology Research Institute (ETRI) said in a new outlook cited by Reuters on Tuesday.
This consumption figure is equal to about 15.36 million barrels per day (bpd) in a conversion with a ton-to-barrel ratio of 7.33.
China’s consumption of transportation fuels has peaked, Wu Mouyuan, vice president of CNPC’s think tank, said, as carried by Reuters.
However, demand for petrochemicals has a lot of room to grow because consumption in China is about 60% of the consumption in developed economies, according to the analyst.
Like CNPC, the International Energy Agency (IEA) also believes that oil demand for fuels in China has reached a plateau.
“With the overall Chinese economy pivoting from manufacturing to services-based growth and as the adoption of electric vehicles expands in the transport sector, the data strongly suggest that the combustion uses of petroleum fuel in China have already reached a plateau and that the potential for future growth may be very limited,” IEA market analysts said last month.
CNPC expects oil prices to remain in the $65 to $75 per barrel range this year, amid major uncertainties about global economic growth.
The Chinese major’s base-case scenario is for oil prices to be in the $60 to $70 per barrel range between 2026 and 2030. But U.S. President Donald Trump is the wild card in the oil market and could impact prices in any direction with the trade and sanctions policies, CNPC says.
“The Trump factor will be the biggest uncertainty for the oil market,” the think tank’s Wu said at the outlook presentation, as carried by Reuters.
The Chinese economy will also be key to oil market balances this year, as in any other year. Analysts are eager to see the direction of the economy in 2025 after the lackluster growth in 2024, when China barely hit its GDP growth target amid a series of hits and misses in key economic data points.
Source: By Charles Kennedy from Oilprice.com