China’s economy grew at a faster-than-expected clip in the first quarter, official data showed, expanding 4.5% year-on-year as policymakers move to bolster growth following the end of strict COVID-19 curbs in December.
“The remarkable recovery of the Chinese economy has supported the recent rebound in oil prices,” CMC Markets analyst Leon Li said. Furthermore, May is the seasonal peak travel period in China and demand for fuel is expected to post a very large year-on-year increase, he added.
Chinese refinery throughput surged to record levels in March, signalling robust demand for the fuel, as refiners stepped up runs to capture strong export demand and build up inventories ahead of planned maintenance.
The International Energy Agency (IEA) has forecast that China will account for most of 2023 crude oil demand growth.
However, it has warned that output cuts announced by OPEC+ producers risk exacerbating a supply deficit expected in the second half of the year and could hurt consumers and global economic recovery.
Oil prices also remain under pressure due to a stronger dollar and rise in treasury yields, National Australia bank analysts said in a client note.
–Bloomberg
