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Chinese Traffic Congestion Slipping

OIL PRODUCTS

Traffic in China fell by 6.7% in the week leading up to July 26 to reach 116.0% of January 2021 levels.

  • This drop is a continuation of a declining trend over the past month, in line with seasonal trends.
  • Gasoline and jet demand have seen strength in China this year as part of the economic rebound from lockdowns – particularly boosted by peak summer travel while diesel consumption has lagged, weighed upon by other key parts of the economy like construction lagging.
  • The variation in oil product demand is apparent in strong Chinese diesel exports in July supported by weaker domestic demand and margin strength in the Asian export market – particularly to Singapore.
  • Kpler forecasts a strong Chinese diesel surplus for the remainder of the year which will likely depress margins but depends of export quotas which may be limited.



source: Bloomberg

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