China Oil Demand Seen Up, Despite Data

Chinese government officials seem to be the only people these days who don’t think the country’s oil demand is barreling ahead.

The prospect of misreading oil demand growth in the world’s second-biggest oil consumer is daunting for the oil market – and for good reason.

An unexpected demand surge from the power-generating sector in China in 2004 played havoc with forecasts which were, in some cases, 60% too low, and sent crude oil prices soaring.

…In other words, if analysts did over-estimate Chinese oil demand growth in 2005, the effects of the strong economy would simply translate to even higher oil demand growth this year.

That, he said, would make China an even more bullish factor for oil prices this year.

Schlumberger