Oil Demand Growth in India and China
According to the Trafigura Group, oil demand growth in India is set to surpass that of China this year. This is primarily due to the underlying economic activities in both countries.
Key Drivers of Demand Growth
- India:
- Growth driven by urbanization and rising incomes.
- Economist Saad Rahim indicates a significant demand increase, excluding strategic stockpiling.
- China:
- Facing slower crude consumption growth, except in petrochemicals.
- Sustained growth through strategic and commercial stockpiling, described as crucial for supporting global crude prices.
- Recent stockpiling has been around 200,000 barrels a day.
Strategic Stockpiling
- Frederic Lasserre from Gunvor Group highlights China's continued importation during refinery maintenance to build strategic petroleum reserves (SPRs).
- Potential long-term limitations on China's ability to continue stockpiling at current rates.
Global Supply and Demand Outlook
- Concerns about the ability to absorb additional supply coming into the market next year.
- Expected under one million barrels a day of demand growth next year.
- Saad Rahim questions whether there will be sufficient demand to accommodate the increased supply.