Chinese and U.S. demand for petrochemicals will drive the global demand for oil next year, expert said on November 27, 2017, at the 3-day Gulf Petrochemical and Chemical Association Forum.
Demand for oil in China and the U.S. is expected to continue to grow next year, Vice President of Refining and Chemicals at research firm Wood Mackenzie Alan Gelder said, «and globally, we see 3.5 % growth for petrochemical products in 2018.»
A dip in demand for oil as seen in the 3rd quarter of 2017 «was a one-off mostly driven by Hurricane Harvey which hit demand for petrochemicals in the United States,» Gelder added.
Gelder also mentioned that the slight slowing down of China's economic growth, saying it «does not mean China's economy is declining, in fact it keeps growing.»
Asia's oil demand growth remains strong, and more balanced between gasoline and diesel/gas oil, said the analyst.
Earlier in October, the International Monetary Fund raised its forecast for China's economic growth in 2017 and 2018, saying the Chinese economy would climb 6.8 % this year and 6.5 % next year, both 0.1 % point higher than its previous forecast in July, citing the stronger-than-expected performance in the 1st half of the year and continuous policy support.
Nevertheless Wood Mackzenzie does not expect the price of oil to rise sharply, but it anticipates Brent to trade at $65 per barrel by 2020, despite the agreement between OPEC and Russia to cap production to lift the price.