China’s oil demand has recovered to more than 90% of the levels seen before the coronavirus pandemic

China’s oil demand has recovered to more than 90% of the levels seen before the coronavirus pandemic struck early this year, a surprisingly robust rebound that could be mirrored elsewhere in the third quarter as more countries emerge from lockdowns.

While China – the world’s second-largest oil consumer – is the outlier for now, easing travel restrictions and stimulus packages aimed at resuscitating economies could accelerate global oil demand in the second half of 2020, industry executives said.

Widespread lockdowns to contain the spread of the virus took an especially heavy toll on oil markets, wiping roughly 70% off global prices by mid-April and leading to huge build-ups in oil and fuel inventories worldwide.

Benchmark oil prices have also bounced back as lockdown measures eased, with Brent futures rallying 50% and U.S. crude futures over 90% since May 1. While oil analysts agree that China’s demand is rebounding, estimates differ in terms of degree and duration.

Wood Mackenzie expects China’s oil consumption in the second half to grow 2.3% to 13.6 million barrels per day (bpd) from the same period last year, driven by increased transportation and industrial use.

In contrast, the International Energy Agency (IEA) said in its May report that China’s demand will fall 5% on year to 13.2 million bpd in the second half. Even so, there is strong consensus that both gasoline and diesel use are expected to accelerate as more people and businesses boost movement.

In India, the world’s No. 3 oil consumer, state refiners ramped up output in May as fuel sales recovered ahead of the lockdown lifting in June.

In Japan, the fourth largest oil user, gasoline demand is expected to contract by 10% in October to December, but rebound strongly from the 27% contraction seen in April to June, refiner Cosmo Energy Holdings said.

In the United States – the top oil producer and consumer – road fuel demand is expected to rise to 10.6 million bpd in the second half, according to Rystad Energy, 22% higher than the first half.

However, gasoline consumption will still be 5% down from 2019 on higher unemployment, reduced incomes and more people working from home, Rystad analyst Per Magnus Nysveen said.

China drives global oil demand recovery out of coronavirus collapse, Reuters, Jun 3