By Andrew Hayley BEIJING (Reuters) - China's muted economic growth in 2023 as its post-COVID recovery underwhelms has crimped the outlook for demand ...
STORY CONTINUES BELOW THESE SALTWIRE VIDEOSBEIJING - China's muted economic growth in 2023 as its post-COVID recovery underwhelms has crimped the outlook for demand for diesel fuel, the oil product that is the lifeblood of the economy, paving the way for continuing firm exports.
The International Energy Agency expects China's gasoil consumption in the second half of the year to fall by 150,000 bpd from second quarter levels, it said in its August oil market report. Amid a slew of disappointing Chinese economic data, analysts have lowered their full-year outlooks for diesel usage as well. Since March, the IEA has cut its 2023 forecast by 127,000 bpd. Rystad reduced its estimate by 94,000 bpd this month.
"The lukewarm performance of the wider economy and reports of rising inventories suggest that much of the spike in refinery diesel and gasoline output went into domestic product stocks," the IEA said. "Weak external demand due to global economic downturn slower-than-expected recovery in manufacturing are also expected to continue to weigh on diesel demand," said Xia Shiqing, an oil and chemicals consultant at Wood Mackenzie.Chinese refiners have taken advantage of high profit margins for diesel in Asia by more than tripling their overseas exports of the fuel during the first half of the year compared to 2022.
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