Chinese oil demand is all but back to levels last seen before Beijing imposed a national lockdown to fight the coronavirus outbreak, according to people with inside knowledge of the country’s energy industry.
China is the world’s second-largest oil consumer, behind only the U.S., and the country’s quick turnaround has helped tighten the petroleum market sooner-than-expected. West Texas Intermediate crude, which a month ago plunged into negative prices, surged on Monday above $30 a barrel.
In a remarkable turnaround after Chinese demand crashed by about 20% as the country went into lockdown in February, consumption of gasoline and diesel has fully recovered as factories reopen and commuters drive rather than using public transport, according to the people, who asked not to be named because they aren’t authorized to discuss the matter publicly.
Pinpointing the exact level of Chinese oil demand in real-time is a difficult exercise, but executives and traders who monitor the country’s consumption said it was at about 13 million barrels a day, just shy of the 13.4 million barrels a day of May 2019 and 13.7 million barrels a day of December 2019. The overall number would be higher were it not for jet-fuel demand, which is still running well below a year’s ago level, they said.