Fear of a Chinese economic slowdown and fiscal worries out of Europe have had more downward influence on crude prices in recent days than instability in the Middle East has had toward the upside. But for several reasons, analysts argue that China has less pull on market prices than it did even a few short years ago.
“The relationship between the Chinese economy and oil demand have long ago ceased to be one-to-one,” said Pavel Molchanov, an energy analyst at Raymond James.
Last year, China had a 7.8 percent economic growth, “yet Chinese oil demand last year was up only 4 percent – half the rate of GDP,”Molchanov said. “It’s because China is becoming more efficient at consuming oil which has long been happening in western economies.”
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