China’s gasoline and jet fuel consumption to hit record in 2021 despite COVID cloud

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  • Gasoline Demand Accelerates Growth in Fuel Consumption
  • Jet fuel demand exceeds pre-pandemic level
  • Diesel growth slows on construction and mining slows down

SINGAPORE / BEIJING, Aug 6 (Reuters) – China’s fuel demand is on track to hit record levels this year thanks to a rebound in car sales and a boom in domestic air travel, even as ‘A resurgence of COVID cases is slowing movement in some cities in the near term, analysts say.

Despite the slowdown in the growth of diesel, the main industrial fuel, the overall consumption of gasoline, diesel and aviation fuel in the world’s largest importer of crude oil is expected to increase from 7% to 11% in 2021 to reach a record high. between 8.4 million and 8.9 million barrels per year. day, analysts at consulting firm SIA Energy, IHS Markit and Energy Aspects have estimated.

For comparison, the International Energy Agency (IEA) forecast in March that Chinese demand for gasoline, jet fuel and diesel would increase 6.5% to 8.2 million barrels per day in 2021.

Strong growth in fuel consumption in China has helped boost global crude oil prices by 50% from 2020. read more

COVID ATTENTION

The latest outbreaks of the COVID-19 Delta variant in 17 provinces are expected to restrict travel in the short term, but analysts say the overall growth trend remains intact. Read more

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“If rapid containment can be achieved through mass testing and future large-scale epidemics can be avoided through the deployment of vaccination, gasoline and aircraft will still be on track to hit a record high,” he said. said Shi Fenglei, analyst at ISH Markit.

Demand for gasoline, which accounts for a quarter of China’s refined fuel consumption, is expected to rise 11% to 13% this year to a record 3.8-4.1 million barrels per day, well at above March IEA forecast of 3.5 million bpd.

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“Gasoline is leading the growth as people drive more for long distance travel, (there are) more ridesharing services and online motorcycle deliveries,” said Seng Yick Tee, senior manager of SIA Energy.

New passenger vehicle sales are expected to rise 7% this year, marking China’s first annual growth since 2017, said Tao Gao, light vehicle specialist at IHS Markit.

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Gas-guzzling sport utility vehicles continue to dominate new sales, accounting for nearly half of the total for the first half of 2021, stable from last year, according to IHS data.

People are spending more on cars while cutting back on overseas travel, as China’s borders remain largely sealed to contain the coronavirus.

“Our car models are not the most fashionable, but we expect annual sales to be a quarter higher than last year as customers seem to have more to spend now than they can. no longer travel abroad, ”said a resident of eastern China. General Motors Co (GM.N) Cadillac car dealership.

STAY AWAY

Flight cancellations due to recent COVID outbreaks will reduce demand for jet fuel over the next two weeks, but full-year jet fuel demand is expected to approach or exceed 2019 levels, between 880,000 and 947,000 bpd in 2021 , Liu Yuntao of Energy Aspect and Mia of FGE Geng said.

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According to the aviation data company OAG, passenger seat capacity in China from February to July was 413 million, up 52% ​​from the same period in 2020 and about 1 million more than in the same. period in 2019.

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EXCAVATORS

Demand for diesel, which powers heavy machinery like excavators and trucks, is expected to increase only 1.7 percent from 2020 to 3.88 million bpd, FGE’s Geng estimated.

Excavator sales, an indicator for the mining and construction sectors, began to drop in April and fell through June compared to a year ago, while use also fell. , according to Chinese financial data group Wind.

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Even record sales of heavy trucks in the first half of the year, another indicator of diesel use, failed to boost fuel demand, said Cassie Liu of IHS Markit. Sales were driven more by aggressive marketing by vehicle dealers than by trucking activities.

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Additional reporting by Koustav Samanta in Singapore, Beijing press room; Editing by Shivani Singh, Gavin Maguire and Sonali Paul

Our Standards: The Thomson Reuters Trust Principles.


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