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“Our China economists believe that key drivers of this year’s economic recovery will be corporate and infrastructure investments, which should prove positive for raw materials demand.” the Bank said ..

24 Jan 2013

LONDON (Commodity Online): Deutsche Bank has revised up its Chinese oil demand growth projection for the year to about 5% at 468000 bl/day in comparison to 392000 bl/day for the past year.

“Our China economists believe that key drivers of this year’s economic recovery will be corporate and infrastructure investments, which should prove positive for raw materials demand.” the Bank said in a report.

Chinese oil demand ended the year on a high note as data for the final months of 2012 reflected a sharp recovery.

China’s oil demand (as calculated on an apparent demand basis) in the final four months of last year averaged growth of about 9% YoY compared with growth of just under 2% in the first eight months of 2012. On a full-year basis, China’s oil demand rose by about 4.2% YoY in 2012, which makes it the weakest growth rate on an annual average basis since 2002.

The sharp recovery in demand from September 2012 likely reflected some level of inventory building.

Notably, inventory data for China shows gasoline stocks closed 2012 at a nearly 9 mln bbl YoY surplus.

Stock changes get reflected in apparent demand calculations so the steep inventory builds likely inflated actual end user demand figures.

“However, we believe actual demand was underpinned by improving economic growth as evidenced by healthy export data, strengthening industrial production and PMI.” the Bank noted.


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