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Tsvetana Paraskova

Tsvetana Paraskova

Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. 

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China’s Oil Demand Growth Could Halve This Year

This year, Chinese crude oil demand growth could be just half of the estimated growth for 2019, and the lowest growth pace since the financial crisis in 2008, according to forecasts of China’s biggest oil firm, state-controlled China National Petroleum Corporation (CNPC).  

“Negative impacts on the economy from U.S.-China trade frictions won’t be rooted out in the short term,” CNPC’s research unit said in its annual report on Monday, as carried by Bloomberg.

Apparent demand for oil in China—calculated by adding domestic production to net imports and changes to inventories—is set to increase by just 2.4 percent in 2020, less than half the 5.2-percent growth estimated for 2019, according to CNPC’s research division.

This growth pace would be the lowest since 2008, as per BP’s data. The low growth rate would depress oil prices if it materializes, considering that China is the world’s largest importer of crude oil.  

According to researchers at the largest oil firm in the world’s top oil importer, the impact of the U.S.-China trade war will continue to be felt in the Chinese economy, whose growth will linger at 6 percent.

The car market in China, including vehicles with internal combustion engines and electric vehicles, will continue to suffer as the economic growth is not expected to materially pick up, even after the U.S. and China sign a phase-one trade deal.

The signing of the deal is expected to take place this week, but China is reportedly signaling that the ‘trade war is not over yet’, and that there are still many uncertainties about future deals.

Separately, CNPC’s research showed that the state-held company expects China’s natural gas demand growth to hit in 2020 its slowest rate in four years. According to CNPC’s researchers, Chinese gas demand is set to grow by 8.6 percent this year, down from estimated growth of 9.6 percent last year, confirming the trend of slowing growth in China’s gas demand.

By Tsvetana Paraskova for Oilprice.com

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  • Mamdouh Salameh on January 13 2020 said:
    These are forecasts based on faulty assumptions and without any proofs. If anything China’s crude oil imports will overtake 2019’s particularly after the U.S. and China signed a phase-one trade deal.

    Even with trade war raging in 2019, China’s economy grew at a healthy 6%-6.1% and its crude oil imports in the last quarter hit 11.23 million barrels a day (mbd).

    Why should China’s oil imports decline this year when the economy is projected to grow at a similar healthy rate as in 2019 and the de-escalation of the trade war is gaining momentum this year.

    Moreover, an economic growth rate at a very respectable 6% for an almost mature economy like China’s is a great achievement when compared to 2.2% for the United States and 1.5%-2.0% for the European Union (EU).

    China won the trade war with the United States hands down and its economy which is the world’s largest based on purchasing power parity (PPP) never faltered in almost two years of the war. The proof is that China’s crude oil imports broke all previous records when they topped 11 mbd for the first time. This isn’t a sign of a faltering economy.

    Dr Mamdouh G Salameh
    International Oil Economist
    Visiting Professor of Energy Economics at ESCP Europe Business School, London

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