China’s oil demand will rise at a faster pace this year than previously forecast amid an economic recovery, according to Deutsche Bank AG.
Consumption by the world’s second-largest crude user will increase by 4.9 percent, or 468,000 barrels a day, Soozhana Choi, Deutsche Bank’s chief oil strategist in Singapore, said in a report e-mailed today. The bank predicted in December that growth would be 3.4 percent this year.
China’s apparent oil demand, or crude processing plus net imports of refined products, rose for a second month to a record 10.6 million barrels a day in December, up 9.1 percent from a year earlier, data compiled by Bloomberg show. Gross domestic product expanded 7.9 percent in the fourth quarter compared with 7.4 percent in the previous period, snapping a seven-quarter slowdown, government figures showed Jan. 18.
“The sharp recovery in demand from September 2012 likely reflected some level of inventory building,” Choi said in the report. “However, we believe actual demand was underpinned by improving economic growth. Our China economists believe that key drivers of this year’s recovery will be corporate and infrastructure investments, which should prove positive for raw materials demand.”
The government has accelerated investment-project approvals, trimmed fees for exporters and increased spending on infrastructure to boost growth.
China’s consumption of gasoil, or diesel, which accounted for about a third of the nation’s total oil demand in 2012, may climb 3.5 percent this year, about 2 percentage points higher than in 2012, Deutsche said. Fuel oil demand may weaken after an increase of 4.4 percent last year as new taxes and crude import licenses make it less attractive as a refinery feedstock, the bank said.
— With assistance by Christian Schmollinger, and Jing Yang