It is estimated that the biggest economy of the world will recover in the second quarter with the coronavirus epidemic being taken under control and the restrictions applied are removed.
It is estimated that the second quarter demand for the three main transport fuels is to increase by 1.1 million bpd compared to the first quarter.
Global oil producers will surely welcome demand recovery in China, the world’s largest crude oil buyer, but this increase in demand may not be sufficient to alleviate the current global supply surplus issue.
It would not be wrong to expect China’s total oil demand (in the first quarter) to return to the level of the previous year in the second quarter after falling 2.4 million (bpd). Fuel demand is estimated to remain flat compared to the same period a year ago. It estimates that gasoline demand will increase 504,000 bpd and 451,000 bpd in diesel in the second quarter compared to the first quarter.
According to its data, the concentration of nitrogen dioxide, a harmful gas emitted by motor vehicles, power plants and industrial plants, increased by more than 45% in major cities such as Shanghai and Shenzhen.
By April 15, around 84% of medium and small businesses in China were back in operation, and national electricity consumption returned after a two-month contraction.
However, dangerous signals are received for the manufacturing industry due to the declining orders at export-oriented factories. Restrictions remain on domestic and international air travel.
The outlook for sea fuel demand becomes dismal as demand for exported goods falls.
Container handling volume in major Chinese ports, which is an indicator of China’s international trade and production activities, has been shrinking for three consecutive weeks in April.