China’s growing fleet of sport utility vehicles will offset gains in fuel efficiency and continue to drive oil-demand growth, according to Sanford C. Bernstein Research.
Chinese oil consumption will increase at an average annual pace of 5 percent to reach 12.9 million barrels a day in 2018, from 9.6 million barrels a day in 2012, the investment research company said in a report e-mailed today. Its forecast is higher than the International Energy Agency’s outlook for a 4 percent average annual increase for the same period.
The proportion of SUVs in the Chinese passenger fleet should double to 20 percent in 2020 from its current size, and the total number of vehicles should also double to more than 220 million at the end of the decade, Bernstein said.
As oil demand shifts to transport from industry, gasoline consumption has grown 15 percent year-to-date, while diesel use decreased 1.8 percent, it said.
“While China used to be a net importer of diesel and exporter of gasoline, we see this reversing,” Bernstein said. “With China’s refineries increasingly configured to meet gasoline demand, we see China increasingly being long diesel, which has negative implications for the region’s refineries.”