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Signs of emerging weakness in crude oil demand in the world’s biggest importer of the commodity, China, are casting a shadow over the success of OPEC+ to prop up prices.
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According to a Bloomberg report, the decline in the housing market is one sign of this weakness, with eleven consecutive months of declines in home sales. This has in turn affected construction activity, which is a major driver of energy and fuel demand, the report also said, noting a decline in China’s apparent consumption of crude in April, which was the first such monthly decline since December 2022.
The suggestion of weakening demand supports an earlier report from state energy major CNPC, which projected that China’s demand for petroleum products may reach its peak before 2025. CNPC said it expected overall oil demand to grow this year—but it may be its last.
With new productive forces — which refer to technological innovation, data, smart or intelligent technologies and the like — driving an overall increase in productivity and enhancing new dynamics for economic growth, overall demand for petroleum is on an upward trajectory this year,” the CNPC Economics and Technology Research Institute said in March.
Bloomberg, meanwhile, notes that refining rates in China declined by 4% last month, to 14.36 million barrels daily, and that independent refiners had reduced their run rates to an average of 55%, down from 62% this time last year.
The report further cited tanker-tracking data as showing the number of supertankers heading for Chinese ports was at a seven-week low as one more sign of a potential oil demand weakening. On top of it all, state refiners do not seem eager to crank up their run rates after maintenance season, with Energy Aspects forecasting a modest increase in throughput this year of less than 100,000 barrels daily.
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