Oil has been in the headlines for all of the wrong reasons in recent weeks as a combination of dynamics, including reduced global demand, has seen the price per barrel of Brent Crude plummet.
China appears to be bucking the demand trend, however, according to a new report from Platts. Oil demand in the country hit a historic high of 10.63 million barrels per day (b/d) in December, with overall demand in 2014 also increasing 3%.
China’s apparent oil demand in December rose 5.3% year-over-year, hitting the highest absolute demand on record according to a just-released Platts analysis of Chinese government data. China’s apparent oil demand in 2014 rose 3% from a year before to an average of 10.1 million b/d, which was higher than the 2% year-over-year growth seen in 2013.
China’s apparent oil demand increased considerably through the year, rising to 10.34 million b/d in the fourth quarter, buoyed by a seasonal uptick in consumption as well as the government’s monetary easing measures.
“Oil demand growth this year is expected to be similar to that of 2014,” said Song Yen Ling, Platts’ Senior Writer for China. “China’s economic growth is likely to continue slowing, with many analysts predicting GDP expansion this year to average below 7.5%.”
While apparent demand rose, total oil product imports in 2014 tumbled 24.2% from 2013 to 30 million metric tonnes (mt), the lowest annual level since Platts started tracking Chinese oil demand data in 2005. Exports of oil product from the country increased 4.1% to 29.67 million mt. As a result, China remained a net importer of oil products, despite being a net exporter during the first 11 months of 2014.
Long-term projections still point to an upward trend in global crude oil prices. If the current dynamics around the world continue, however, then gasworld understands we can expect to see greater investment downstream as countries and corporations alike drill down into the added value of each barrel – in turn, boosting industrial gas demand.
There’s no escaping the impact of the collapse in oil prices on the gases industry, from short-term demand as materials output and demand takes off, to potentially greater investment downstream as companies drill down into the added value of each barrel.
The potential effects on the specialty gases business, LNG projects, and the Asian market are all explored in the upcoming February issue of gasworld magazine.