February 18, 2013
Think gasoline prices are coming down this year? Think again. Between supply constraints, the usual suspects in the Middle East, and China, oil demand is seen hefty enough to keep prices stable to high for the foreseeable future. In fact, China’s oil demand is seen rising by 5% this year on the backs of an economic recovery.
Faster-than-expected economic growth could raise fuel demand even higher than market estimates, if car sales and property sales continue on their positive trend lines. A government stimulus program on infrastructure also remains a possibility when the new leadership formally assumes power at the March legislative meetings, Barclays Capital noted recently.
Upside Surprise Possible In China Oil
China’s oil demand staged a sharp rebound in the fourth quarter of last year, reaching a historical high of 10.6 million barrels a day in December, after languishing near the 9 million per day mark during the summer. Strength into the year-end propelled fiscal year 2012 oil demand to 9.6 million a day, 360,000 higher than the same period a year ago.