Global gasoline demand picking up slack of jet fuel: Vitol's Muller

Global gasoline demand is picking up the slack of jet fuel as long-haul air travel is lagging a recovery in domestic flights, Vitol's Mike Muller told the Gulf Intelligence webcast on May 7.

"What has surprised on the upside" from recent Asia holidays is gasoline demand in China, the Vitol director and head of Asia said. "Gasoline demand in China is still pretty good," possibly as a result of a "post-COVID mindset," Muller said. "The bit missing from the China demand equation is long-haul jet travel, long-haul aviation. I think it's fair to say globally and in China, domestic air travel is back to pre-pandemic levels if not above in many places but long-haul is not."

Global oil demand is expected to grow in excess of 1.5 milion b/d to 1.6 million b/d this year, with the "in-house" view calling for a stock buildup in the next few months, he said.

China's oil demand in Q1 is estimated to have grown 830,000 b/d year on year, jumping to 1.3 million b/d in Q2 on the back of last year's weak base, S&P Global Commodity Insights said in a note on April 28. "The second half of the year is likely to see growth easing to about 720,000 b/d."

Demand estimates for diesel growth for this year are being lowered as industrial numbers have disappointing across the world, Muller said.

"People are revising diesel demand down to a point where year-on-year demand for diesel globally in 2022-23 is really down to just 100,000 b/d or 200,000 barrels a day now in some people's minds and it's gasoline that's now picking up the slack," he said.

He expects a boost in Asian demand to come in the fourth quarter of 2023, when winter demand usually kicks in, giving way to a reduction in stockpiles.