The International Energy Agency (IEA) has increased its global oil demand forecast for 2021, citing a surge in Chinese demand as the primary reason. The IEA now expects global oil demand to reach 96.4 million barrels per day (bpd) this year, up from its previous estimate of 96.2 million bpd.
China, the world’s largest oil importer, has seen its demand for crude oil reach record highs in recent months. According to data from China’s General Administration of Customs, the country imported a total of 11.34 million bpd of crude oil in May, up 8% from the same month last year.
The increase in Chinese demand can be attributed to several factors. Firstly, the country’s economy has rebounded strongly from the COVID-19 pandemic, with GDP growth reaching 18.3% in the first quarter of 2021. This has led to a surge in industrial activity and increased demand for energy.
Secondly, China has been stockpiling crude oil in recent months, taking advantage of low prices and building up its strategic reserves. The country’s crude oil inventories reached a record high of 1.03 billion barrels in April, according to data from the National Bureau of Statistics.
Finally, China’s domestic oil production has been declining in recent years, leading to an increased reliance on imports. This trend is expected to continue, with the IEA forecasting that China’s oil demand will grow by 680,000 bpd this year.
The increase in Chinese demand has significant implications for the global oil market. OPEC+ (the Organization of the Petroleum Exporting Countries and its allies) has been gradually increasing production in recent months in response to rising demand, but there are concerns that this may not be enough to meet the growing needs of China and other emerging economies.
Furthermore, the increase in demand could lead to higher oil prices, which could have a knock-on effect on global inflation and economic growth. The IEA has warned that “the risk of higher oil prices triggering a slowdown in demand growth remains elevated.”
In conclusion, the surge in Chinese demand for crude oil is a significant development in the global energy market. While it is a positive sign for the Chinese economy, it also highlights the challenges facing the global oil industry in meeting growing demand. As always, the situation will require careful monitoring and management by policymakers and industry stakeholders alike.
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- Source: https://zephyrnet.com/iea-raises-global-oil-demand-outlook-as-chinese-demand-hits-record-nysearcauso/