Home > Chemical News

Chemical News

Chinese oil demand growth to slow on increasing energy efficiency: IEA

https://www.chemnet.com   Feb 11,2015 Platts
China's oil demand growth will slow to less than 300,000 b/d until the end of this decade as the government focuses on restructuring the economy away from export-led growth, the International Energy Agency said in its latest Medium Term Oil Market Report released Tuesday, February 10.

"Chinese demand is expected to grow 2.6% per annum (2014-2020), roughly half its previous six-year trend," IEA said.

This deceleration is one of the key changes that has driven the global slowdown in oil demand growth in recent years, it added.

By 2020, China's total oil demand is expected to reach 12.1 million b/d, compared with 10.4 million b/d in 2014 and an estimated 10.6 million b/d this year.

Average annual growth was 440,000 b/d in the 2009-2014 period and China accounted for about 35% of global oil demand growth, although this is set to fall to just a quarter going forward.

Energy demand in China will be affected by two major factors -- the move toward domestic consumption-led growth as well as an ambitious climate change agenda targeting energy efficiency and development of clean energy.

OIL INTENSITY DECLINING

In China, total oil intensity, or the amount of oil that is required to produce a certain level of economic output has fallen steadily.

In 2003, the intensity was 0.82, meaning 820,000 b/d of oil products were needed to generate Yuan 1 billion of gross domestic product. But this intensity declined to 0.66 in 2008 and 0.54 last year.

By 2020, this is expected to fall to 0.43.

The petrochemicals, transport and industrial sectors will see the sharpest decline in oil intensity.

The transport sector's oil intensity will fall to 0.21 by 2020, compared with 0.25 last year and 0.28 in 2008, as sales of more fuel-efficient engines for vehicles rise.

In industry, oil intensity will settle at 0.05 by 2020, down from 0.07 in 2014 and 0.09 in 2008, also because industrial plants and heavy machinery become more energy efficient while in petrochemicals, heavy investment in new plants has resulted in a less feedstock intensive industry.

"Both 2013 and 2014 showed notable increases in Chinese efficiencies, going a long way towards explaining the sharp slowdown that has occurred in Chinese oil demand growth in recent years," the agency said.

The IEA calculates oil intensity by dividing oil product demand in barrels per day by real GDP values.

Gasoil demand has suffered the most out of all major oil products, contracting by 0.6% year on year in 2014, according to the IEA.

Going forward it will see only weak, sub-2%/year growth, as efficiency gains from various end-users achieved in prior years will restrain future growth.

Gasoline demand could be hampered by growing natural gas penetration in the transport segment and is forecast to expand over 4.7% annually until 2020.
 Print  |    add to Favorites  |    Close