Due to travel restrictions in place to curb the spread of the virus and the lockdown, China’s oil demand is already lower, with an estimated 1.2 to 1.3 million barrels per day lost, according to company figures. FGE energy consultants cited by Bloomberg. . Half of the lost demand is in the form of aircraft fuel, the data show. Prior to the recent outbreak of coronavirus, China’s daily demand averaged 13.7 million barrels per day in both January and February, the report said. “The complete lockdown in Shanghai and the seriousness of the situation there is a bit unexpected,” an FGE analyst told Bloomberg, adding that even if the lockdown in Shanghai ends, half a million barrels of daily oil demand will remain at risk of new restrictions. in other parts of the country. News of Covid cases in China has shaken oil markets several times over the past two years, given the country’s heavy dependence on imported oil. The first alarm signs this time appeared in March, when a 36% reduction in traffic was reported for Shanghai in mid-March, while traffic levels in Shenzhen fell by 26%. The reason for the reaction of the oil market, which has always been a sharp drop in prices, is Beijing’s policy of zero Covid, which is based on an immediate lockdown to limit the spread of the disease. These lockdowns, in turn, affect oil consumption and obviously frighten oil traders. In March, authorities shut down Shenzhen, a city of 17.5 million people, and oil prices plummeted. Prices also fell this week, though this time, there was a strong additional back-winding factor in reserve release announcements. By Irina Slav for Oilprice.com More top readings from Oilprice.com:
