Gasoline demand growth will slow this year due to the growth of electric vehicles in China and the United States
By Mohi Narayan
NEW DELHI (Reuters) – Growth in global gasoline demand could halve in 2024, weighing on refinery margins in the second half, analysts say, driven by the shift to electric cars in China and in the United States and a return to normal consumption after last year’s rebound following COVID. -19.
In its weakest growth since 2020, demand is expected to increase by 340,000 barrels per day (bpd), to 26.5 million bpd this year, according to consultancy Wood Mackenzie , down from last year’s 700,000 bpd growth, as China nears the peak. demand for transportation fuel and the United States has exceeded it.
“Electric vehicle penetration has increased in the United States and China,” said Sushant Gupta, an analyst at Woodmac.
“For this year, Chinese demand will only increase by 10,000 b/d, due to increased adoption of electric vehicles.”
Consultancy Rystad Energy estimates global gasoline demand at around 26 million b/d in 2024, up about 300,000 b/d from growth of around 700,000 b/d in 2023 , fueled by the post-pandemic consumption boom, said analyst Mukesh Sahdev.
China, once the engine of global gasoline demand, is expected to account for more than half of all electric vehicle sales this year, the International Energy Agency said.
Gasoline consumption at the world’s largest crude importer is expected to grow by about 1.3%, or about 2 million tonnes, to 165.1 million tonnes (3.8 million bpd) this year, according to forecasts from a research department of China National Petroleum Corp (CNPC). .
The research arm of China’s largest refiner, Sinopec, expects gasoline demand to rise 1.7 percent, or about 3 million tons, to 182 million tons this year.
As falling prices boost demand, the share of electric cars sold this year could reach 45% in China, around 25% in Europe and more than 11% in the United States, the IEA estimates.
In comparison, booming car sales, along with strong economic growth and low penetration of electric vehicles, are driving gasoline demand in India and Indonesia.
India’s gasoline consumption will reach a new record of 39.2 million tonnes (908,000 bpd) by March 2025, up about 5% from 37.2 million tonnes in the year until March 2024, according to government estimates.
PRESSURE ON THE MARGIN
U.S. gasoline consumption fell to about 376 million gallons per day (8.94 million bpd) in 2023 after hitting a record 392 million gallons in 2018, according to the Energy Information Administration the United States.
Demand in 2024 is expected to be stable, analysts say.
As a result, U.S. refiner margins are expected to remain under pressure after the peak summer driving season, Woodmac and Rystad analysts said.
In Europe, gasoline demand will increase by 50,000 b/d, or 2.3%, in 2024, to 2.19 million b/d, in line with recent years, FGE said.
The stagnation of European demand for gasoline and growing competition from the new Nigerian Dangote refinery, the largest in Africa and Europe, which could add 280,000 to 300,000 b/d of gasoline to global balances, will put pressure on European refining margins, Woodmac said.
Gasoline margins in the United States and Asia have gained 85% this year, to around $29 per barrel for WTI crude on May 1 and 29% and around $13 per barrel, respectively. of Brent crude on April 30, on expectations of robust summer demand, according to LSEG data.
Margins strengthened earlier this year due to scattered refinery outages in Asia and the United States, while rising transportation costs from attacks on Red Sea shipping and Russian energy infrastructure supported European gasoline markets. (REF/EXIT)
Eurobob gasoline was worth about $23 per Brent barrel on May 1, compared with an average of $19.67 in April last year, the data showed.
(Reporting by Mohi Narayan, additional reporting by Robert Harvey in London and Aizhu Chen in Singapore; editing by Florence Tan and Clarence Fernandez)
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