Road and air traffic in China, the world’s second-biggest oil consumer, has rebounded sharply after a significant easing in the country’s COVID-19 restrictions, boosting the outlook for fuel demand and supporting crude prices, reports Reuters.
Key curbs dropped
After almost three years of pursuing a policy targeting zero COVID cases, China last week abandoned many key curbs, including dropping frequent virus testing, relaxing quarantine rules and scrapping travel tracking.
The changes immediately triggered a significant rise in mobility, with road and air transport picking up for the first time in almost two months, according to data from the transport ministry, travel analytics firms and energy consultancies.
Oil demand to contract
The global energy market is watching China’s recovering mobility closely. Demand in the world’s top oil buyer is expected to contract for the first time in two decades this year due to widespread lockdowns.
“Given the faster pace of reopening, we now expect mobility to normalise – reaching the June-July 2022 levels – by end-March 2023 versus our prior expectation of May/June,” Morgan Stanley analysts wrote in a note on Wednesday.
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