Oil Will Still Be Sickly After the Virus
In 2003, China’s economy was relatively small and growing fast. Now it’s huge and slowing. So don’t expect a post-SARS-like rebound.
The current state of gasoline demand in China.
Photographer: Giulia Marchi/Bloomberg
Crude oil has had a grim start to the year, with prices hovering around $50 per barrel as China’s coronavirus epidemic shuts down swathes of the world's second-largest economy. A rebound akin to the one that followed the end of the SARS outbreak is unlikely this time.
Back in 2003, China was on a growth trajectory. The economy was also far smaller, accounting for less than 5% of global gross domestic product. Only about 10 in 1,000 people owned a car, a number that is now some 15 times larger. The only way for oil demand was up. This time, the coronavirus has slammed the brakes on an economy that in 2019 grew at its slowest pace in almost three decades. Car sales have fallen for two straight years, and manufacturing has been sputtering.