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New data from the U.S. Energy Information Administration shows that in September 2013 China surpassed the U.S. to become the world’s largest importer of oil and other liquid fuels. China’s demand for oil and refined petroleum products continues to climb. At the same time, U.S. imports are heading in the other direction, as increased fuel efficiency combines with a surge in domestic oil and gas production.
The U.S. still far outpaces China in overall consumption of liquid fuels. The U.S. burns through 18.9 million barrels per day (down from the 2005 peak of 20.8 million bpd), while China still only consumes about 11 million bpd. However, the difference is the prodigious production coming from the U.S., which has allowed it to slash its imports. For example U.S. liquid fuels production is expected to have climbed by 31% between 2011 and 2014, reaching 13.3 million bpd. China’s production is only expected to rise by 5% over that period.
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China’s oil demand is expected to continue to rise as more and more people get into cars for the first time. However, economic data emerging from China is sparking fresh worries of a slowdown there. Its manufacturing sector actually contracted for the first quarter of 2014. The Purchasing Manager’s Index (PMI), which measures growth in manufacturing, hit an 8-month low according to preliminary data released on March 24. In order for China to hit the growth targets laid out by the central government, analysts believe that Beijing might consider economic stimulus measures to accelerate economic expansion. The data shows that some of the weakness is coming from domestic demand, as opposed to exports. The government has wanted to refocus growth on domestic consumption, reducing its dependence on heavy industry.
By Charles Kennedy of Oilprice.com
Charles is a writer for Oilprice.com