Oil demand in China, the world's biggest energy consumer, could contract for the first time in two decades this year as Beijing's zero-COVID policy keeps people at home during upcoming holidays and reduces fuel consumption.
Hundreds of millions of Chinese who typically hit the roads and domestic flights during the Mid-Autumn Festival - falling on Sept. 10 this year - and early October's Golden Week holidays are expected to stay home to avoid being ensnared by sudden lockdowns to curb the spread of COVID-19.
As of Aug. 31, bookings for domestic air travel during the holiday are 38.5% lower than 2021, data tracked by ForwardKeys showed, while flight bookings for Golden Week travel are expected to fall by 23.8% from last year. In the fourth quarter, gasoline, diesel and jet fuel demand are expected to increase by about 530,000 bpd from the third quarter to 8.55 million bpd, Energy Aspect's Sun said, adding that demand could fall further if COVID cases increase.
"The resumption of road traffic and diesel will rely more on the growth of the macro-economy," he said.