China’s oil demand shows post-pandemic resilience, with risks skewed to the downside

China’s oil demand shows resilience after the Covid-19 shock in Q1, recovering largely to pre-crisis levels by Q2. Looking forward to post-pandemic growth, we expect China’s oil demand to rebound by 1.3 million b/d in 2021, after falling 0.3 million b/d in 2020. • Gasoline demand will grow up to 2021, as the car stock will keep growing moderately. • Diesel/gasoil demand is supported by increasing infrastructure construction activities and associated road freight demand of heavy trucks up to 2021. • Jet fuel demand still needs a longer recovery time and is expected to return to normal by mid-2021. • Petrochemical feedstock is a major demand driver, mainly due to new ethylene capacity coming online in H2 2020 and 2021. • Downside risks remain. A weaker economy could restrain the demand in different ways among oil products; strength of exports in Q2 2020 would be at risk; while vaccines delays or its effectiveness may limit a recovery of international air travel.