SINGAPORE, Dec. 29 (UPI) — A metric used to gauge Chinese oil demand was slightly higher than last year, though there are signs economic performance is slowing, an industry report said.
According to economists with the Organization of Petroleum Exporting Countries, Chinese gross domestic product will average 6.7 percent growth for 2016 and 6.2 percent in 2017. OPEC said the amount of crude oil held in storage in China increased slightly this year as the country diverted more oil into its strategic reserves.
Ratings agencies Moody’s and Fitch this month reported the Chinese economy may face headwinds moving into 2017, with the banking sector facing the brunt of the downturn. Government estimates of the Consumer Price Index, which gauges national inflation, came in well below the official target rate of 3 percent.
According to the economists at OPEC, China’s economy improved in November, but momentum was slowing when compared with previous months. Oil demand growth, OPEC said, was “solid-to-steady” for one of the world’s leading economies.
A review of national data from S&P Global Platts, meanwhile, found China became a net exporter of oil products for the first time in October, with net output coming in at around 4,000 barrels per day.
Nevertheless, implied oil demand — which measures the amount moving through domestic refineries against net imports — was 1.1 percent higher year-on-year on October, Platts found.
“This was the first positive year-on-year growth recorded since June,” the emailed report read. “This brings overall apparent oil demand over January to October to an average 11.04 million barrels per day, which is a contraction of 1.4 percent from the same time in 2015.”
Chinese oil demand may influence dynamics on an oil market that favors the supply side given lackluster growth in the global economy. The International Energy Agency said demand for oil could surpass the level of supplies available on the market at some point during the first half of the year provided members of the Organization of Petroleum Exporting Countries and other producers honor a production cap starting in January.