China Will Make Up Nearly 40% Of The Rise In Global Oil Demand In 2023, Wood Mackenzie Says  

• China will make up a sizeable portion of the world’s demand recovery for oil as the global economy braces itself for a slowdown in the wake of interest rate hikes, Wood Mackenzie said. The research firm said in a Thursday report that it views China’s reopening as the “single biggest demand driver” for a recovery in oil demand this year — it expects the country will make up roughly 40% of the world’s recovery in demand for the commodity.
• “A return to normal mobility in China is the single biggest demand driver, accounting for 1.0 million barrels per day (b/d) of the 2.6 million b/d increase this year,” a team of analysts led by vice president Massimo Di Odoardo said in the report, laying out its base case scenario. That means 38.5% of global oil demand recovery would come from China.
• While Wood Mackenzie says private consumption will be the leading factor for a surge in China’s oil demand, it sees an upside to its base case scenario if economic growth were to be industry-led instead.
• According to the Chinese government’s latest work report, they have taken a very cautious approach to its growth prospects for this year. They have set a conservative GDP of 5%. It is important to note that China has a history of outpacing their government forecasts – in 12 of the past 18 years growth has exceeded the official target.
• Analysts at Oxford Economics, however, are of the view that government measures would have the opposite effect. They expect that Beijing’s focus on reining in local government debt problems will constrain infrastructure spending and, by extension, demand for commodities.

(Source: CNBC)