Oil de­mand to slow in 2015

China Daily (Canada) - - FRONT PAGE - By DU­JUAN du­juan@chi­nadaily.com.cn

Oil and gas con­sump­tion is ex­pected to see slower growth in China this year, with the fall­ing global crude prices pro­vid­ing an op­por­tu­nity for more en­ergy sec­tor re­forms, ex­perts said onWed­nes­day.

The coun­try’s oil de­mand will grow 3 per­cent year-onyear to 534 mil­lion­metric tons in 2015, ac­cord­ing to the think tank of China Na­tional Petroleum Corp, the na­tion’s top oil and gas pro­ducer. In 2014, oil con­sump­tion grew by 3.3 per­cent to 516 mil­lion tons, said a re­port pub­lished by the CNPC Eco­nomic and Tech­nol­ogy Re­search In­sti­tute.

“Eco­nomic in­cen­tives for oil con­sump­tion will con­tinue to decline. As a re­sult, China’s oil de­mand growth will be slower, at around 2 to 3 per­cent in the fu­ture,” said Sun Xian­sheng, head of the in­sti­tute.

The think tank es­ti­mated the av­er­age price of global crude bench­mark Brent to be around $60 to $70 a bar­rel and theWest Texas In­ter­me­di­ate crude price at about $55 to $65 a bar­rel this year.

Af­fected by a sup­ply glut and weak­en­ing de­mand, global crude prices had dropped from around $115 a bar­rel in mid-June to $53 a bar­rel by the end of 2014. Prices con­tin­ued to decline to be­low $50 a bar­rel this month.

“Froma trad­ing per­spec­tive, China will have a much big­ger say in the in­ter­na­tional crude mar­ket since the coun­try, as a strate­gic buyer, will keep lead­ing the de­mand growth in the world,” Sun said.

He said crude out­put may grad­u­ally decline as in­ter­na­tional oil com­pa­nies cut in­vest­ment this year to cope with price drops.

“Low-cost crude pro­duc­ers such as in the Mid­dle East re­gion will gain a much big­ger mar­ket share,” he said. “China will be a buyer that all the pro­duc­ers want to chase.”

Wang Zhen, deputy direc­tor of CNPC pol­icy re­search of­fice, said Chi­nese oil com­pa­nies should use the fall­ing crude prices to ad­just their busi­ness struc­ture so that China can ac­cel­er­ate the re­form of the en­ergy in­dus­try.

Yang Lei, deputy direc­tor of the oil and nat­u­ral gas di­vi­sion at theNa­tional En­ergy Ad­min­is­tra­tion, said fall­ing crude prices have trig­gered losses for many over­seas oil blocks owned by Chi­nese firms.

China’s en­ergy con­sump­tion

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