analysts are cutting China oil demand forecasts at the end of the year after the cases of COVID-19 they will shoot up to reach near record levelswhich has forced the authorities to reset restrictions to mobility and has delayed the recovery of the world’s main importer of crude oil.
Despite the recent measures adopted by Beijing to reduce some restrictions against COVID-19, several analysts consider that China’s reopening process is taking one step forward and two steps back: Demand for fuel in the world’s second-largest oil consumer is considered unlikely to recover until after March 2023, limiting gains from global oil prices.
“We cautiously lower our demand expectations from China by 1.2 million barrels per day (bpd) in the fourth quarter of 2022,” Goldman Sachs analysts said in a note. “Confidence remains high in a reopening of China in the second quarter of 2023.”
China announced on November 11 that it will relax some COVID-19 restrictions after sticking to its ‘zero contagion’ strategy for two and a half years, raising hopes of a recovery in demand.
Beijing’s strategy has been to act decisively to end all outbreaks, at odds with most Western countries that are learning to live with the virus.
Nevertheless, With daily cases approaching record levels of more than 28,000, the Chinese regime has once again locked up millions of residents to stamp out the virus.
Global oil futures are down almost $10 a barrel since the announcement of new restrictions.
Sun Jianan, an analyst at consultancy Energy Aspects, also revised down China’s oil demand forecasts, by 200,000 bpd for November and December and 120,000 bpd for the fourth quarter.
“Demand will remain low in year-on-year terms in the first quarter of 2023before ramping up to 15 million bpd in the second quarter of 2023, when we expect the country to start reopening, gradually lifting most mobility restrictions starting in April 2023,” Sun said.
(With information from EFE/By Muyu Xu)