China has maintained its zero-Covid policy. While the latest data show that fuel demand was not as weak as feared in March, we believe that the full impact of lockdowns hit demand in April instead. Global demand was only 93 million b/d last month based on our estimates.
Chinese fuel demand should begin to recover this month and in June, although the risk is to the downside. Global demand could near 100 million b/d by the end of the summer as Chinese demand recovers.
However, high fuel prices and weakening economic conditions are tempering US and European demand.
The Conference Board has reduced its US GDP forecast for 2022 from 3 percent to 2.3 percent.
Similarly, the European Commission has revised its EU GDP outlook from 4 percent to 2.7 percent for 2022 because of the war.
Despite a strong recovery in jet fuel demand as international borders reopen, demand for transport fuels during the third quarter of 2022 will remain 2.2 million b/d below the same period in 2019.