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Goldman Sachs sees 'hidden demand' for oil in China
[NEW YORK] China's continued economic expansion, recent stimulus measures and still-growing consumption for some oil products appears to have upped its oil demand, Goldman Sachs said on Monday.
"Conventional demand measure understates consumption as it misses processing gains and trade data such as LPG and mixed aromatics," Goldman Sachs analysts said in a note to clients.
The bank has constructed an expanded measure that it says includes these items, and which shows demand through May grew 460,000 barrels per day (bpd) or 4 per cent compared with the same period of last year.
Goldman said it maintained its outlook for China's oil demand to grow 350,000 bpd overall this year and to grow 300,000 bpd in 2017.
"While we still lack the details of products output, trade and stock changes, we estimate that our expanded measure will likely continue to point to stronger, although likely slowing, demand growth," Goldman said.
However, there still remains downside risk to Chinese oil demand growth should China's slowdown in economic activity accelerate, Goldman cautioned.