Analysts expect second quarter rebound in China fuel demand

China’s second quarter fuel demand is forecast to rebound from the first quarter, nearly matching year-ago levels, as Beijing lifts curbs to contain its coronavirus outbreak and resume the full output of the world’s second-largest economy.

Demand for refined fuel, including diesel, gasoline and jet fuel, in the second quarter may rise by 2.4 million barrels per day, or 23 percent, from the first quarter, said Michal Meidan, a director at the Oxford Institute for Energy Studies (OIES).

Analysts at SIA Energy in Beijing predict second quarter demand for the three main transportation fuels will rise by 1.1 million barrels per day versus the first quarter.

China has largely contained the spread of the novel coronavirus and it is gearing up efforts to re-open the economy, which contracted for the first time on record in the first quarter.

Global oil producers would welcome a demand recovery in China, the world’s top crude oil buyer, but not it may not be enough to alleviate a massive global supply glut.

Meidan from OIES expects diesel and fuel oil to lead the recovery, with a 20 percent growth over the first quarter, while gasoline remained more muted with a 10 percent rebound during the same period.