Wood Mackenzie forecasts a sharp slowdown in China’s oil demand growth, approaching zero by 2027 as the country nears peak consumption. Senior analyst Alan Gelder notes that demand for gasoline and diesel is already declining, while jet fuel sees only modest growth, primarily driven by petrochemical use rather than transport.

Although crude runs are expected to increase slightly in 2026 compared with 2025, weak underlying demand will limit this growth. Gelder also pointed to significant inventory builds earlier this year, followed by recent drawdowns as prices softened.

A major uncertainty for global oil markets in 2026 is how much China will rebuild its commercial crude inventories. Given the limited growth in crude runs and rising refined-product exports, the volume of surplus crude China stores will have a significant impact on global oil price trends.

This shift towards near-zero demand growth reduces China’s role as the primary driver of global oil demand and increases the importance of inventory movements. Forex traders should closely monitor Chinese crude storage decisions, as these could quickly tighten or loosen oil market balances.

Wood Mackenzie is a respected global energy and resources research firm known for its comprehensive analysis of oil, gas, power, metals and mining markets. It provides data-driven forecasts, asset valuations and strategic insights to governments, producers, traders and financial institutions, making it a leading authority on long-term energy trends and commodity fundamentals.

Original Source: Eamonn Sheridan of investinglive.com