India's LARGEST EVER political poll. Have you participated yet?
  • search

India will surpass China as fastest growing oil market: Report

By Vicky
Subscribe to Oneindia News
For Quick Alerts
ALLOW NOTIFICATIONS
For Daily Alerts

    India will surpass China as the fastest-growing Asian market for petroleum products in 2018, says a report. This is possible as Chinese demand growth is seen halving to 2.5-3 per cent in 2017-18 from a higher 6 per cent in 2016-17.

    India will surpass China as fastest growing oil market: Report

    Despite the weakening growth numbers in both these countries, China and India will continue to be the key growth engines for the sector in Asia, representing over 80 per cent of the expected growth in 2018, says a report by Moody's.

    Quoting the American energy information administration projections, the report said the demand for petroleum products in the Asia Pacific will rise a modest 2 per cent or 0.7 million barrels per day in to 34.6 million bpd in 2018.

    "Given the oil sector's reliance on China and increasingly India, we believe demand would face considerable risks if economic growth weakens materially below our expectations. However, India will surpass China as the fastest growing product market in Asia with petroleum consumption growing 6 per cent in 2018," Moody's said in a report today.

    It also says China and India growth will ensure that Asian refining margins will remain firm, thereby supporting the earnings growth. Since October 2014m Moody's has been having stable outlook for the sector.

    On China, the report says, "as Chinese economic activity dials back, we expect its refined product demand growth will moderate to 2.5-3 per cent in 2017-18 which is nearly half of higher CAGR of 5 per cent in 2012-16. Still in absolute terms, China will still account for 48 per cent of Asian R&M demand growth in 2018.

    "Specifically, we expect the average Asian refining margins to be largely in line with the average of $6.2 a barrel for the last three years, but better than $5.1 per barrel in 2016," says the report.

    "The recent forced closure of about a quarter of US refining capacity has created an under supply situation, causing fuel prices, including gasoline, diesel and jet fuel, to surge.

    Nonetheless, we expect the recent spike in crack spreads and refining margins to temper and normalise as the supply crunch eases gradually," the report adds.

      Sikkim Standoff: After a racist video, China releases another praising India | Oneindia News

      Noting that supply and demand will vary by country, as a whole Asia's incremental growth in demand for fuel of around 0.7 million bpd will outpace net refining capacity additions of 0.4-0.5 million bpd over the next 12-18 months.

      "At the same time, the bulk of the incremental growth in refining capacity will come from China and Vietnam. Still, with demand growth surpassing capacity additions over the last five years, Asia is likely to remain a net importer of refined petroleum products over at least the next three years," concludes the report.

      OneIndia News

      For Breaking News from Oneindia
      Get instant news updates throughout the day.

      X
      We use cookies to ensure that we give you the best experience on our website. This includes cookies from third party social media websites and ad networks. Such third party cookies may track your use on Oneindia sites for better rendering. Our partners use cookies to ensure we show you advertising that is relevant to you. If you continue without changing your settings, we'll assume that you are happy to receive all cookies on Oneindia website. However, you can change your cookie settings at any time. Learn more