Worldwide efforts to contain the spread of the virus have ravaged oil markets, wiping roughly 70 percent off global prices by mid-April and leading to huge build-ups in oil and fuel inventories.

 “The brisk resumption of Chinese oil demand, 90 percent of pre-COVID levels by the end of April and moving higher, is a welcome signpost for the global economy,” said Jim Burkhard, vice president and head of oil markets at IHS Markit. 

He added: “When you consider that oil demand in China – the first country impacted by the virus – had fallen by more than 40 percent in February – the degree to which it is snapping back offers reason for some optimism about economic and demand recovery trends in other markets such as Europe and North America.” 

According to energy consultancy Wood Mackenzie, China’s oil consumption in the second half of the year could grow 2.3 percent to 13.6 million barrels per day (bpd) compared to the same period last year, driven by increased transportation and industrial use. “By the third quarter, China’s gasoline demand would have surpassed the same period last year by three percent to 3.5 million bpd,” the consultancy said, adding that diesel consumption could grow by 1.2 percent to 3.4 million bpd over the same period.

Its projections are in contrast those of with the International Energy Agency (IEA), which said in its May report that China’s demand would fall five percent year-on-year, to 13.2 million bpd in the second half.

“China has led the demand recovery path so far. Following this, other countries such as South Korea, Australia and Vietnam where the (virus) cases are broadly under check will see an improvement in petroleum demand,” said FGE analyst Sri Paravaikkarasu.

Benchmark oil prices have bounced back with the easing of lockdown measures, with Brent futures rallying 50 percent and US West Texas Intermediate (WTI) futures rallying over 90 percent since May 1. On Wednesday Brent was trading at $39.35 per barrel while US crude price reached $36.89 a barrel.

For more stories on economy & finance visit RT’s business section

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