Chinese Diesel Demand Supports Oil “Lower for Longer” Case

By ,   January 26, 2016

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Chinese diesel demand showed another drop in year-over-year consumption.  This is not unreasonable given the well known goal of the Chinese government to shift toward a more consumer driven economy.  The broader implication is that this trend exacerbates pressure on oil markets.  Saudi Arabia appears to be settling in for the long term of lower prices by adjusting exploration projects and keeping production high. 

It is important to note that decline was smaller month-over-month, and declines should moderate as the Chinese economy finds a balance.  

Diesel Demand

Source:  Bloomberg