China oil demand's good news, but can it be oil's savior?

TOKYO (MarketWatch) — China’s oil demand has grown even as its production declines but analysts question whether the nation’s healthy appetite for crude will last, and cast doubt on whether its demand can single-handedly offset an expected global drop-off in consumption this year.

That’s part of the reason why recent upbeat data on Chinese demand hasn’t provided any lasting impression on the oil market or helped crude prices hold their ground above the $70-per-barrel level.

China, the world’s second-largest consumer of oil and the fastest single-growing market, consumes a little more than 7 million barrels per day, according to Dave Ernsberger, senior editorial director for Asia at Platts.

With that in mind, “China is looked at as sort of the fortune cookie for the world right now,” said Kevin Kerr, president of Kerr Trading International. “Demand is key if oil prices are going to get back above $75 or $80 and all eyes are on China as an indicator of when the global economic engine will begin firing again.”

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