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The International Energy Agency (IEA) Raises China's Oil Demand Forecast for 2008
As China's GDP growth from January to March exceeded expectations and transportation increased, the IEA raised China's oil demand forecast for 2008 to an average of 7.9 million barrels per day.Comprehensive foreign news reported on May 13 that the International Energy Agency (International Energy Agency) revised China's 2008 oil demand forecast upward on the 13th, due to China's economic growth from January to March exceeding expectations and the rebound in transportation fuel consumption.
The International Energy Agency said in its monthly report on global oil markets that it now expects China's oil demand in 2008 to increase by 4.9% from 2007, to an average of 7.9 million barrels per day, compared with the previously expected increase of 4.7%.
But the agency said its expectations will be revised in the coming months as it becomes clearer about economic growth, the impact of early-year snowstorms, factors such as the Olympics and oil-fired power plants.
The International Energy Agency said the uncertainty mainly comes from the field of oil-fired power plants. The agency noted that some observers believe bottlenecks in the railway transportation network led to tight coal supplies in late January and February.
If these observers are correct, this means that these problems can only be solved in the medium term by building new railways or other transport infrastructure.
So some new shortages may emerge. Some officials predict a 10-gigawatt power supply shortfall in the summer of 2008, especially in southern China. In this case, the use of some small backup generators will increase the daily demand for diesel and fuel oil by approximately 30,000 to 40,000 barrels.
"China Electric Power News" reported on the 13th that the power shortage in Guangdong Province in the south may be about 6 billion watts. The power shortages in neighboring Yunnan and Guizhou provinces are approximately 1.5 billion watts and 1 billion watts respectively. The specific figures depend on the supply of thermal coal and hydropower.
Even if additional demand from oil-fired power plants does not materialize, more trucks transporting coal will use more diesel, the International Energy Agency said.
The International Energy Agency said oil demand in March was boosted by reconstruction efforts after snowstorms at the beginning of the year that disrupted power lines.
The powerful earthquake that hit China on the 12th may have caused damage to high-voltage transmission line towers and other energy infrastructure, although the epicenter was in a mountainous area in Sichuan Province. So it's too early to tell whether this will increase oil demand.
The International Energy Agency said in a report that China's explicit demand in March was estimated to have increased by 11% year-on-year. Demand is defined as refining production plus net imports of petroleum products, adjusted for fuel oil factors, direct combustion of crude oil and inventory changes.
The growth in explicit demand is mainly related to the rebound in transportation fuel consumption in March; China's gasoline consumption increased by 23.9% year-on-year in March, and diesel and aviation fuel increased by 15.7% and 14.5% respectively.
Demand for fuel oil also increased after months of weak demand as agricultural machinery uses lower standards of diesel.
The agency said oil demand also grew along with higher-than-expected gross domestic product (GDP) growth in the first quarter, and oil imports largely made up for the situation as overall refinery operating rates fell 1.4% from February. .
China's GDP grew by 10.6% in the first quarter, which the International Energy Agency said was almost a full percentage point higher than most expectations.
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