Oil demand in the world’s top oil importer, China, has rebounded to pre-coronavirus levels, Bloomberg reported on Monday, citing sources with inside knowledge of China’s energy sector.
China was the first to go into lockdown after the COVID-19 virus emerged in Wuhan, but it was also the first country to exit lockdown. Demand for oil and fuels has been rising over the past month as people return to commuting to work, preferring their own vehicles to public transportation.
According to Bloomberg’s sources, China’s gasoline and diesel consumption are already back to the pre-virus levels—a bullish sign for the oil market, which is looking at China for clues about when demand in the rest of the world could return to some form of normality.
In February and early March, in the full lockdown and extended factory shutdowns and holidays, China’s oil demand had plunged by around 20 percent.
Over the past few weeks, more and more encouraging signs have emerged that China’s demand is recovering and helping lift global oil demand from the lows of the ‘Black April.’
Chinese refineries increased their run rates by 11 percent in April as the country began to emerge from the months-long lockdown prompted by the coronavirus outbreak that became a pandemic. At 13.1 million bpd, the April run rates were also higher than the average for the same month in 2019.
China’s crude oil imports jumped in April to about 9.84 million bpd as demand for fuels began to rebound and local refiners started to ramp up crude processing, according to Chinese customs data cited by Reuters.
Recovering demand, not only in China but with signs of more demand ahead as U.S. states and major European economies continue to ease lockdowns, plus accelerated production cuts from OPEC+ and North America, were driving U.S. oil prices up by nearly 10 percent early on Monday - WTI Crude traded at $33.16 a barrel at 11:42 a.m. EDT, up by 12.67 percent on the day, a day before the expiry of the June contract.
By Tsvetana Paraskova for Oilprice.com
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