The oil demand of Asian countries, especially China, is slowing sharply during the last months. The experts suggest that the decline may not be cyclical, as the result of a deep process in the Chinese economy. The import of oil from the Asian countries is declining for four months, albeit from record levels. So, from March to June, the reported decline is 12% to about 82 million tons (20 million barrels) per day, which is slightly below last year’s level.
The decline in imports of commodity is following the decline in car sales in China. So, from December 2015 to May 2016 the current demand for cars has dropped from a peak of 2.8 million units to 2.1 million units.
“The growth in demand for oil in Asia is slowing. China, the largest Asian market, is experiencing sluggish demand”, commented the analysts of the local commodity markets.
Another reason, according to experts, may lie in the fact that China has completed the formation of strategic oil reserves. Bank JP Morgan in a letter to clients last week reported that the strategic oil reserves of the country currently stands at 400 million barrels, which, according to experts, is close to the maximum potential. According to analysts of the bank, in September, net oil imports in China could decrease by 15% in monthly terms. ”
The decline of 1.2 million barrels in August, and by 0.8 million barrels less than the average value of 12 months”, noted a letter from the bank JP Morgan.
In the Asia-Pacific region accounts for 40% of global oil demand.
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