- More than 300 million trips made over Lunar New Year break
- Travel exceeded pandemic years, still below pre-Covid levels
According to Bloomberg article published on January 30, 2023, a robust rebound in Chinese travel over the Lunar New Year holiday has boosted optimism in the outlook for oil demand.
Gasoline and jet fuel consumption jumped during the week-long break as people took the opportunity to travel after the nation dismantled its restrictive Covid Zero policy last month. Trips exceeded those of the pandemic years, but were still below pre-virus levels.
China’s rebound from Covid and its impact on global crude demand is being closely watched by the market. Some analysts are betting that the nation’s recovery will help propel Brent oil above $100 a barrel.
More than 300 million trips were made over the holiday, nearly 90% of pre-pandemic levels, according to the Ministry of Culture and Tourism. Retail gasoline sales at filling stations affiliated with China Petroleum & Chemical Corp. — the nation’s biggest refiner — were 20% higher than the corresponding period last year.
The number of domestic trips made by air rose 80% compared with the same period in 2022, China’s Civil Aviation Administration said. A total of 9 million trips were made, or 72% of 2019 levels.
Trading giant Trafigura Group last week predicted a “lot of upside” for the oil market as pent-up demand is unleashed, especially in China. Prior to the holiday, the nation’s biggest oil trader — Unipec — went on a buying spree for March-loading barrels, pointing to the possibility for increased demand from the second quarter.
