China’s Oil Demand Slump Leads to 2% Drop in Global Oil Prices

 

Oil drops 2% as concerns over China’s demand wipe out last week’s gains

Oil prices dropped by approximately 2% on Monday, erasing last week’s gains, as China’s oil imports fell for the fifth consecutive month, fueling concerns over fuel demand. This decline was further driven by OPEC’s decision to lower its global oil demand growth forecasts for 2024 and 2025.

China’s stimulus measures failed to boost investor confidence, while markets remained tense over the potential for Israeli strikes on Iranian oil infrastructure.

On Monday, OPEC revised its forecast for global oil demand growth in 2024, marking its third consecutive downward adjustment for the upcoming year. The primary contributor to this downgrade was China, the world’s largest importer of crude oil, as OPEC reduced its growth estimate for the country from 650,000 barrels per day (bpd) to 580,000 bpd.

Data indicated that China’s crude oil imports for the first nine months of this year fell nearly 3% compared to the previous year, averaging 10.99 million bpd.

The decrease in Chinese oil demand is attributed to the rising adoption of electric vehicles (EVs) and a slow economic growth following the COVID-19 pandemic, both of which have negatively impacted global oil consumption and prices.

According to official data released on Saturday, China’s deflationary pressures intensified in September. Following a press conference on the same day, investors were left uncertain about the scale of a potential stimulus package to revitalize the world’s second-largest market economy.

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