\n\tBy Chris Shaw<\/p>\n
\n\tChinese total apparent oil demand fell in July by around 10% in month-on-month terms, though as Deutsche Bank notes the figures still represent a gain of 2% in year-on-year terms. The July numbers mark the slowest rate of growth for Chinese total oil demand since January of 2009.<\/p>\n
\n\tIn Deutsche's view, the deceleration in oil demand growth rates in China will continue in coming months, this largely reflecting base effects as in the September-December period last year average demand growth came in at around 16%.<\/p>\n
\n\tActual demand growth is also likely to slow from the 15% rate achieved in the first half of this year, Deutsche expecting Chinese demand growth in the current half year is likely to be around 4%. This implies full year average demand growth of 9% in year-on-year terms.<\/p>\n
\n\tCommonwealth Bank base and precious metals and oil analyst David Moore suggests the decline in apparent consumption is consistent with efforts to slow Chinese economic activity and energy consumption levels.<\/p>\n
\n\tMoore suggests even allowing for this, the uptrend in crude oil consumption remains intact, at least partly because China's oil import dependence has risen in line with apparent consumption. Moore sees this as keeping world oil prices well supported, especially as China's rate of vehicle ownership will expand as incomes continue to rise. This will mean ongoing growth in demand.<\/p>\n
\n\tBut the supply side must also be taken into consideration and here National Australia Bank is less optimistic, noting robust world oil production is keeping the global oil market in surplus at present. Despite elevated stock levels and falling output from OECD nations, OPEC production and non-OECD supply continues to increase. This should keep the oil market in surplus through 2010 in the view of the NAB's Australia and commodities economist Ben Westmore.<\/p>\n
\n\tWhile there is likely to be some upward pressure on prices as demand conditions in the US and Europe improve, NAB expects prolonged fiscal consolidation in heavily indebted nations will act as a headwind to any oil price recovery.<\/p>\n
\n\tDeutsche Bank suggests any such headwinds may in fact prove to be temporary, as it takes the view while there is likely to be some negative sentiment for oil prices in the third quarter as Chinese tightening measures play out, the subsequent relaxation of these measures and the potential for stockpiling next year should be a positive for oil prices in 2011.<\/p>\n
\n\tDeutsche Bank is forecasting quarterly oil prices for West Texas Intermediate of US$65 per barrel in the third quarter of this year and US$70 per barrel in the final quarter. In 2011 its forecasts call for prices of US$75 per barrel in the first quarter, rising to US$80 per barrel and the second and third quarters and US$85 per barrel in the final quarter.<\/p>\n
\n\tThese forecasts compare to Westmore's estimates of US$76 and US$81 per barrel for the final two quarters of this year and US$85 in the first quarter, US$86 per barrel in the second, US$87 per barrel in the third and US$89 per barrel in the final quarter of 2011.<\/p>\n
\n\tIn Westmore's view, price gains in oil are likely to be gradual, as while OPEC has expressed a desire to maintain a price consistent with producing from higher cost reserves, there remains substantial space capacity and a tendency for OPEC members to exceed their production quotas.<\/p>\n
\n\tCommonwealth Bank's Moore is forecasting oil prices of US$77 and US$78 per barrel for the final two quarters of 2010, rising to US$82 per barrel next March, US$86 per barrel next June, US$90 per barrel next September and US$92 per barrel for the December quarter of next year.<\/p>\n","protected":false},"excerpt":{"rendered":"
Chinese apparent oil demand weakened in July and may decline further in coming months but analysts still see further price gains as the uptrend in global oil consumption remains intact.<\/p>\n","protected":false},"author":9,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[24],"acf":[],"_links":{"self":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/posts\/57058"}],"collection":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/users\/9"}],"replies":[{"embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/comments?post=57058"}],"version-history":[{"count":0,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/posts\/57058\/revisions"}],"wp:attachment":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/media?parent=57058"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/categories?post=57058"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/tags?post=57058"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}