Oil prices could pass the 100 US dollar a barrel mark in the first quarter of this year. Rising populations and economic growth especially from Asia will continue to fuel demand and put pressure on prices.
Currently, Asia Pacific accounts for 30 per cent of global oil demand, and Greater China takes up a third of that Asia Pacific pie. Alok Sinha, Managing Director, Oil & Gas Group, Standard Chartered, said: “Chinese demand is growing at a rapid clip. We expect some of that surplus gasoline capacity to disappear till new refining capacity comes on stream in China. What we do see in the longer term is growth in domestic consumption as well as the transportation sector.”
“Overall, the requirements for transportation fuel which is gasoline and gas oil will continue to grow. Singapore is currently a big trading hub for all of this and we expect the volume of that business to grow exponentially simply because the quantum of deficit is also rising despite increase in refining capacity.”
Mr Sinha added that China today has roughly 200,000 barrel a day of gas oil deficit in the market place.
“A lot of analysts are talking about it. [It] could be as high as 700,000 to 800,000 barrels a day in 2020 unless some of the speculative capacity on the refining side comes through. That’s a significant jump from where we are today,” he said.