The ongoing spread of the coronavirus within the country has led the Chinese government to implement massive travel restrictions locally, which is weighing heavily on oil consumption within China. Executives at Chinese refineries are expecting local oil consumption to fall by 25 (3.2MM b/d) this month from Feb. 2019 levels due to the travel restrictions enacted due to the coronavirus. One of these executives added that he expects oil consumption next month to be 10 below March 2019 levels. Demand for asphalt and fuel oil dropped by 90 since the end of last month due to travel restrictions. Diesel and gasoline consumption over the Chinese New Year holiday period was down 2/3 from the 2019 holiday period. Citigroup Inc.'s energy strategist for commodities research Eric Lee adds that Chinese crude demand could fall by 3.0MM b/d this month, with average demand decline of 1.3MM b/d for 1Q. Michal Meidan at the Oxford Institute for Energy Studies added, "We are highly likely to see a 3.0-4.0MM b/d impact this month when you consider the economy has virtually ground to a halt. Industrial activity is down, passenger movement is down 70, freight movement is down 50. The timing question is key. We know for sure there is an effective standstill for two weeks at least."
展开▼
