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China Spring Festival Serves Demand Boost but Clouds Economic Backdrop

OIL

(MNI London)


Executive Summary:

  • China travel was served a welcome boost by the extended annual Spring Festival (Lunar New Year) Feb 10-17 (especially for flights) but the boost will serve fleeting and hides a backdrop of industrial demand weakness.
  • Factors such as low winter temperatures and the Spring Festival holiday - which marks an industrial off-peak season - serve a blow to diesel demand in a hit to refiners despite holiday strength for gasoline and jet.
  • Energy markets eagerly await any signs of China stimulus measures to act as a boost for demand, but policy seems set on keeping things ticking along rather than any efforts to supercharge growth – especially the property sector.
  • China state run refiners maintained healthy January operations ahead of the Spring Festival Holiday, while teapots have struggled with weaker margins and tighter access to discounted feedstocks – instead tapping into stockpiles.
Full piece here:

MNI Commodity Analysis - China Spring Festival Serves Demand Boost but Clouds Economic Backdrop.pdf

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