Chinese economy collapses and stops because of coronavirus

According to Chinese industry experts, in February 2020, oil consumption in China is going to fall by 25 percen due to an outbreak of the coronavirus infection in the country. The new virus, which is commonly referred to as Wuhan flu, has paralyzed tourism and forced many enterprises to temporarily shut down their activities.

Demand for oil in China is to drop by 3.2 million barrels per day in February 2020 compared to February 2019. Such a decline is equivalent to more than three percent of global consumption.

According to the International Energy Agency (IEA), oil consumption in China in February last year amounted to a little less than 13 million barrels a day.

While Beijing is trying to take control of the coronavirus infection, Chinese oil refineries are facing significant declines in their sales.

Experts also believe that demand for oil in China in March of this year will be at least ten percent lower than a year earlier if the peak of the burden of the disease passes in the coming weeks.

Oil consumption in China falls amid coronarivus outbreak

Oil demand in China is believed to decline by three or four percent in February, because the Chinese economy has come to a standstill. The production activity has declined, the passenger traffic fell by as much as 70 percent, while freight traffic has halved. Against such a background, experts expect the Chinese economy to be still for at least two weeks.

Independent Chinese refiners are forced to cut refining volumes by at least 50 percent. The sale of petroleum products in China has fallen by 90 percent due to logistics problems. This has increased stocks by more than 50 percent.

The consumption of gasoline and diesel fuel in China during the New Year's Eve on the Lunar calendar in 2020 was almost two-thirds less than a year earlier. In Shandong, the center of oil trade - the average capacity rate among independent oil refineries decreased by 40-50%, which is a record low.

The decrease in demand in January was reported in spite of the traditional surge in connection with an increase in fuel sales as many Chinese people travel for New Year festivities. Oil quotes have dropped amid concerns about a decline in fuel demand in China.