Oil product demand in Asian key economies set to surge

Oil product demand in Asian key economies set to surge

SINGAPORE (AFT): Demand for key oil products in Asia's four
biggest consuming countries -- China, India, Japan and South
Korea -- is projected to rise sharply this year as their
economies rebound, according to a petroleum industry journal.

The strongest growth in consumption is expected to be in South
Korea, where demand rose 22.8 percent from a year ago in the
first four months of 1999, the Singapore-based Strategist Oil
Report said in its latest issue received at the weekend.

The oil products included liquefied petroleum gas, naphtha,
gasoline, jet kerosene, diesel and fuel oil.

The Strategist tracked consumption in the four countries,
which account for more than 75 percent of the Asian market, using
different calendar periods.

Consumption in Japan and India rose 4.4 percent and 7.7
percent respectively from a year ago in the first half of 1999,
while China's rose 7.8 percent over the first five months, the
report added.

Consumption of oil products among the Big Four in 1998 was
11.1 million barrels and the figure has already been overtaken
this year, the journal said.

The biggest boost to Asian demand for oil products in 1999 is
expected to come from Japan, which is still regarded as the
region's largest oil market, it said.

"Riding on the back of strong economic growth, Japanese demand
for the major products surged to 4.4 percent to just under five
million barrels per day" in the first half of the year, the
report said.

South Korea's "impressive" demand for oil products, which
reached 2.1 million barrels per day in the first four months of
1999, was attributed to the greatly increased use of jet kerosene
for heating and air travel, and of naptha.

South Korea's consumption in 1999 could surpass 1997's record
2.07 million barrels per day if the economy met its projected
growth forecast for the year, it said.

The South Korean economy is expected to top seven percent,
after reporting a 9.8 growth rate in the second quarter of the
year, it noted.

China's oil demand for the first five months of 1999 rose to
over 3.24 million barrels per day, rising "against a backdrop of
growing political and economic uncertainty," the report said.

Economic growth in China is forecast to slow to between six
and seven percent this year from 7.8 percent in 1998.

The journal cited talk over the devaluation of the Chinese
yuan and tensions with Taiwan as adding to jitters.

India's oil demand in the first half of the year stood at 1.8
million barrels per day.

"India's oil demand growth is expected to hold up despite
signs its economy could be rattled by domestic political
instability and military conflict with Pakistan," it said.