China's crude oil demand will grow by 3.4 percent this year to a record of almost 12 million barrels per day (bpd), the country's top state-owned oil producer forecast on Thursday, as refiners in the world's second-biggest oil user ramp up output.
The robust outlook for crude combined with surging vehicle sales in the world's largest auto market boosted oil futures even as the report cautioned that demand growth for products like gasoline and diesel will slow and the domestic fuel glut will remain a significant problem.
Total crude oil consumption will hit 594 million tonnes, or 11.88 million bpd, state-owned China National Petroleum Corporation (CNPC) forecast in an annual report released by its research institute.
Total refinery throughput will rise by 3.3 percent to 557 million tonnes, or 11.2 million bpd, with refiners adding 702,000 bpd of net capacity. That will increase to 11.8 million by 2020, it said.
The rising refinery demand will lift crude imports by 5.3 percent to 396 million tonnes, or 7.95 million bpd. By 2020, it forecast imports will hit 8.2 million bpd. But, the rising refinery runs will maintain the domestic supply glut that has forced refiners to export into a saturated Asian market in recent years.
The domestic refining glut will be at least 2.2 million bpd by 2020, but could surpass 3 million bpd if the market worsens, it forecast.
CNPC predicted that net exports of diesel will surge by 55 percent this year to 22.4 million tonnes, or about 450,000 bpd. In addition, slowing growth in the world's second-largest economy and the shift to renewable energy will hamper the consumption growth for oil products, the report said.
"Energy giants will die like dinosaurs if they don't diversify into other energy products and into clean energy," said Liu Zhaoquan, vice president at the CNPC institute, at a briefing.