BEIJING: China’s economy could be poised for a stronger-than-anticipated rebound that will deliver a demand boost for oil and natural gas, says the head of the International Energy Agency (IEA).
There are some “first indications” from China that growth will accelerate faster than previous expectations and deliver around half of a forecast two million barrels a day increase in global oil demand this year, IEA executive director Fatih Birol said in an interview.
“This may be even stronger if the Chinese economy advances faster than we assume,” Birol said in Bengaluru, ahead of a three-day energy forum. “Global oil and liquefied natural gas (LNG) demand will go upwards.”
Rising Chinese demand will have a significant impact on LNG, according to Birol, because current market volumes are among the lowest in history.
Oil fell for the third month in a row in January as investors remained concerned about rising US stockpiles and softer Chinese demand.
There’s also been some caution over the pace of China’s recovery, with data showing weakness persisting among manufacturers and in the sales of cars and homes.
The Organisation of Petroleum Exporting Countries and its allies will remain “extremely cautious” about adding barrels to the oil market until there’s evidence of elevated demand, RBC Capital Markets LLC said in a note last week. — Bloomberg
