A plateau in Chinese oil demand – Deutsche Bank

By FXStreet Michael Hsueh, Research Analyst at Deutsche Bank, suggests that Chinese oil demand growth has accounted for an average of 35% of world oil demand growth since 2000 and based on public agency and industry forecasts this trend is expected to continue with China making up more than a third of world oil demand growth to 2035.

Key Quotes

“However, we believe that oil demand growth from the passenger vehicle sector, which has made up 66% of Chinese total oil demand growth since 2010, may slow in the medium term and then begin to decline by 2024. This casts doubt over the capacity for continued long-term oil demand growth at current trend rates in China, and by extension, the world.

Importantly, we need not make any strong assumptions regarding growth in electric vehicle market share in order to reach these conclusions although a high battery electric vehicle scenario results in 1 mmb/d lower Chinese oil demand in 2035 as compared with our central scenario.

The key underlying drivers are the size of the passenger vehicle fleet, its utilization in annual kilometers traveled, and its fuel efficiency. We take projections of these drivers from the IEA, US DOE, and the Chinese government, respectively, …read more

Source:: FX Street