China’s thirst for oil keeps on growing. For the third month in a row, China is showing a year over year increase in oil demand, according to Platts.
The growth in demand seems to be driven by two factors. First, China’s managed to beat back the recession. Second, the government raised the price of gasoline twice in June, which provided a greater incentive for refiners to increase production. Couple them together and you get improved demand.
Overall, China’s demand in 2009 is still less than its 2008 demand. While Platts called this a “new growth phase” for China in its release, it also cautioned that “there is plenty of scepticism by oil market observers that domestic consumption will keep China’s engine running at the current pace in the coming months if its export markets continue to remain in the doldrums.”
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