After years of soaring growth, Asia's fuel demand falters

Gobbling up over a third of global supplies, Asia is the world's biggest and fastest growing region for oil consumption, and its seemingly insatiable fuel thirst has long been a core support for prices. After years of often explosive growth, fuel consumption in Asia's biggest economies is stuttering, undermining efforts led by the Organization of the Petroleum Exporting Countries (OPEC) to end a global supply glut and lift prices. Gobbling up over a third of global supplies, Asia is the world's biggest and fastest growing region for oil consumption, and its seemingly insatiable fuel thirst has long been a core support for prices. Now, some say that picture of buoyant growth in demand is crumbling. "The signs of growing demand aren't quite what they seem. Chinese fuel growth is at a three year low, Japanese fuel demand is down," said Matt Stanley, a fuel broker at Freight Investor Services (FIS) in Dubai. "Considering the sheer volume of product available... sooner or later I think we could see some distressed sellers. Brent crude oil futures have risen by around 5.5 percent this month to $55.75 per barrel as traders bet on a broader commodity market recovery and price in a Middle East risk premium after the U.S. missile attack on Syria last week.But in a sign that there remains an abundance of oil available to buyers and that the more opaque physical oil market is not as convinced by the rally in financial markets, top exporter Saudi Arabia this month lowered the price for its May crude for Asian customers by 30 cents versus April, and to a discount of 45 cents compared with the benchmark Oman/Dubai average.

 It is showing up in various parts of the region's economy. China's gasoline exports in February climbed to their second-highest monthly level on record as refiners increasingly turned to exports to Asian markets to drain a domestic supply glut that almost wiped out imports altogether. Even India, which is often touted as the next driver of global demand growth, fuel consumption fell 0.6 percent in March from a year earlier. "The stutter in Indian demand may have been caused due to the effects of demonetisation," said Sukrit Vijayakar, director of energy consultancy Trifecta. With little notice, India abolished the then existing 500 and 1,000 rupee notes late last year, which made up the bulk of the country's cash in circulation. That crimped consumption, affecting many consumers and disrupting many businesses. And while India's annual fuel demand is still expected to grow this year, analysts say, it is unlikely to recover enough to fully offset the demonetization impact. M. K. Surana, chairman of Hindustan Petroleum Corp, said he expects India's fuel demand to rise by 5.5 to 6 percent this year. Though that is still a high growth rate by global standards, it is a far cry from 2016's refined product demand growth of more than 10.9 percent.

 Read more for Indian Stock Tips-http://bit.ly/ace_services