The Van Trump Report

Pay Attention… How China is Impacting the Energy Markets?

Oil markets have been spooked by a recent report that Chinese demand has dropped by about three million barrels a day—roughly 20% of the nation’s daily demand late last year and 3% of global consumption. Not everyone is convinced that a 20% drop in Chinese demand—if that is the current run-rate—is likely to be sustained. But this may be too sanguine, writes Nathaniel Taplin. The transport and industrial sectors together account for around 70% of China’s petroleum demand, with the former now the main driver of growth. As long as factories get back to work over the next couple weeks—and trucks, ships, and planes get back to work shipping their goods—the overall hit to oil demand will probably remain manageable. But if this time frame proves optimistic and factory workers remain home for longer, the picture suddenly gets bleaker. (Source: The Wall Street Journal)

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