MNI COMMODITY ANALYSIS: Chinese Oil Demand Indicators - April Update

Executive summary:

• In our April update, it is clear that Chinese international flying recovery is well underway and is a key factor for global oil demand recovery in 2023. It is supportive for those forecasting $100/bbl Brent in 2023, which was given an even greater boost after surprise Opec+ cuts April 2. Chinese scheduled flights support higher jet demand through April and beyond.
• Less Chinese oil product is being exported onto the Asian market at present because of weaker export margins as Chinese refiners target domestic consumption and ensure security of supply as Chinese refinery maintenance gathers pace Q2.
• Subway ridership levels and traffic congestion show signs of retreating - but more likely indicate a slight pull back from 'pent up' lockdown demand rather than any actual trending decline. Traffic congestion and subway ridership for example still remains well clear of pre-pandemic levels.
• Chinese crude demand remains very high despite declining refining levels, likely to support domestic stock levels. The Opec+ cuts are strengthening global crude prices which may encourage a shake up in Chinese buying activity as it seeks to improve margins. Chinese demand for sanctioned Russian barrels remains high for both Urals and ESPO grades.

MNI China Oil Demand Recovery Indicators - April Update.pdf