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Oil Prices Rise as China’s Q1 Economic Growth Beats Expectations

China’s first-quarter economic growth data is out and it’s an expectation beater. The country’s GDP grew at a rate of 5.3% during the first three months, versus Reuters economist poll expectations of 4.6%.

Oil prices rose following the release of the report. Strong GDP data is normally bullish for oil prices, especially when it comes from a consumer as giant as China.

The publication noted, however, that other economic indicators including retail sales, real estate investment, and industrial output suggested domestic demand was still weak. Yet it was only weak compared to forecasts.

Industrial output, for instance, rose by 4.5% on the year in March but it was a slowdown from the growth rate of 7% sustained during the first two months of the year.

Retail sales, as cited by Reuters, also rose solidly in March, by 3.1%, but the figure was once again a slowdown from the January-February growth rate, which ran at 5.5%. Forecasts saw retail sales growth of 4.6%, Reuters said in its report.

Regardless of the likely overambitious analyst expectations, the figures suggest sustained strong demand for oil in China—the world’s largest importer. During the first two months of the year, that demand was supported by the Lunar New Year holiday—which likely also boosted both retail sales and maybe industrial activity in that period.

Going forward, some expect demand growth to slow down thanks to EVs and high-speed rail. That’s the forecast of the International Energy Agency which saw Chinese oil demand grow at some 500,000 bpd this year, declining to 300,000 bpd in 2025.

Yet China’s CNPC just inked a preliminary deal for importing oil from Niger, which suggests expectations of sustainable oil demand growth in the country. The deal is worth $400 million and will help Niger boost its oil output fivefold, which would put it on the oil exporter map.


By Irina Slav for Oilprice.com

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  • Mamdouh Salameh on April 16 2024 said:
    China's economic growth at 5.3% in the first quarter of 2024 beating its own projection of 5% is a powerful bullish factor adding to the growing bullish sentiments in the global oil market. This performance is also in line with rises in China's imports of crude oil, LNG and metals.

    And to confirm that China's growth is sustainable, Industrial output, for instance, rose by 4.5% and retail sales by 3.1% during the first quarter.

    Yet you will still hear comments from the likes of the IEA projecting that China's oil demand growth will slow down to 500,000 barrels a day (b/d) this year declining to 300,000 b/d in 2025
    at a time when China's imports broke records in the first quarter of 2024 rising by 9% over the same period in 2023.

    Dr Mamdouh G Salameh
    International Oil Economist
    Global Energy Expert

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