The surge in transport fuel demand could be good for Asian oil refiners as Chinese processor keep more supplies at home in April and May instead of exporting, which may ease downward pressure on refinery profit margins in Asia that have fallen by more than half this year. The rising fuel consumption would also confirm expectations for an oil demand rebound in the world's biggest oil importer, which would support global crude prices. The five-day holiday starting on April 29 is expected to drive jet fuel consumption to 790,000 barrels per day (bpd) next month, or 15% higher than April, said Lin Yitian, an analyst at Wood Mackenzie in Singapore. Gasoline demand in May could rise to 3.94 million bpd, or 3% higher than in April. Full-year motor fuel consumption is forecasted to surpass the pre-pandemic 2019 level by 6% in 2023 to more than 3.85 million bpd, she said. "Travel booking data suggests that both jet and gasoline will continue to be supported from pent-up travel demand (especially during the Labour Day holiday) and service fever through April-May. Jet will also be supported by a gradual recovery in international flights," Lin said in an email. With domestic COVID restrictions no longer in place, China's cooped up tourists have filled aircraft seats. Overseas flight demand is also climbing as PCR test requirements for international travel are set to be lifted on April 29. Based on the latest air ticket information from travel data firm ForwardKeys, domestic Chinese travel bookings on April 28, the eve of the holiday, are up 233% from the same time in 2019, while international departures are at 79% of the 2019 level.
There is more room for jet consumption to increase through this year, with Goldman Sachs analyst Nikhil Bhandari saying jet fuel "demand is yet to normalize with international air route turnover only beginning to pick back up." That leaves diesel as the odd man out in terms of Chinese fuel demand since its fortunes are tied to the construction sector that is beset by debt-laden property companies and the manufacturing sector that is suffering through slumping exports. China's diesel consumption in the first quarter was 3.6 million bpd, 5% lower than a year earlier, said Sun Jianan, an analyst at Energy Aspects, which expects full year demand to be about 4 million bpd, steady with 2022. Consultant FGE forecast only marginal annual growth in China's 2023 diesel demand to 3.8 million bpd.
"Diesel demand this year is caught between push and pull
factors," said Mia Geng, head of the China Oil Service at FGE.
"Housing slowdown and export concerns are acting against (a rise
in) post-COVID logistics, economic improvement and solid
infrastructure spending."
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China's commercial fuel inventories China's domestic excavator sales China's domestic excavator
sales China's heavy duty truck sales ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
(Reporting by Muyu Xu and Trixie Yap; Editing by Florence Tan
and Christian Schmollinger)
