Oil: Chinese demand recovery could lift prices – NBC
National Bank of Canada's (NBC) Jocelyn Paquet analyzes how China’s sharp reduction in petroleum imports helped offset the Middle East supply shock and limit Oil price gains. The July rebound in Chinese imports is highlighted as historically large in percentage terms.
National Bank of Canada analyst Jocelyn Paquet explains how China's significant drop in oil imports has helped control oil prices. According to Paquet, the 5 million barrels per day reduction in Chinese imports between March and June has been a major factor in keeping prices stable. This reduction, coupled with the release of strategic reserves, has helped offset a global shortfall and prevented shortages in other countries.
However, Paquet warns that if China's imports remain low for an extended period, prices could rise again. In fact, imports of petroleum products rose by 1.2 million barrels per day in July, or 22.1%. While it is uncertain whether this increase will persist, Paquet emphasizes that Chinese demand trends will be as crucial as developments in the Middle East in determining future energy prices.
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