Pickup in Chinese economic activity, optimized COVID-19 measures to boost off-take after fuel usage contracted last year
Oil and gas consumption in China is expected to rise this year as the economic recovery will rapidly increase energy off-take, experts from industry and policy think tanks said.
Oil consumption is expected to grow by 5.1 percent year-on-year to 756 million metric tons in 2023, with refined oil products up 9.1 percent to 398 million tons, driven by an overall recovery in the country's economy, a report released in April by the Beijing-based Economics and Technology Research Institute showed.
The institute, which is affiliated with the country's largest oil and gas producer and supplier, China National Petroleum Corp, said demand for natural gas will also rise rapidly from last year, with annual consumption expected to climb at a rate of 5.2 percent to reach 386.5 billion cubic meters.
Other agencies and organizations have also echoed the upbeat projections.
The Organization of the Petroleum Exporting Countries estimates that China's oil demand will grow by 510,000 bpd in 2023.
OPEC attributes the growth to optimized COVID-19 measures and a stronger economy compared with 2022, when the country's oil use contracted for the first time in years due to the pandemic.
China's oil demand is on course to rebound and a plan to expand fiscal spending is also likely to support demand, OPEC said in a note.
The Economics and Technology Research Institute said crude oil production in China has been increasing for four consecutive years, with total annual production reaching 205 million tons in 2022, surpassing 200 million tons for the first time in six years. Domestic natural gas production and pipeline gas imports have also grown rapidly.
Last year, China's newly discovered geological reserves of oil were approximately 1.46 billion tons and newly discovered geological reserves of natural gas were over 1.2 trillion cubic meters, maintaining a high growth rate, it said.