Related Articles
Forward article link
Share PDF with colleagues

A renminbi threat to oil?

A major Chinese currency devaluation probably wouldn’t hurt Chinese oil demand as much as some think

Oil demand and stockpiling in China will remain strong this year as speculation, particularly in the West, that Beijing will do a massive 15-20% devaluation of its currency, appears to be just that. Chinese oil consumption and imports are sensitive to price changes – so a renminbi devaluation that made crude more expensive in the local currency would hurt both. But domestic oil demand, in particular, also reacts to GDP. A weaker renminbi would be expected to make exports of Chinese goods more competitive, boosting manufacturing activity. In turn, this would lift demand for diesel (used in manufacturing) and offset any weakness in gasoline. Financial markets have for months been humming wit

Also in this section
US oil sanctions on Venezuela would escalate crisis
21 July 2017
As Donald Trump threatens to introduce measures against the South American nation's exports, the outcome could be ruinous for all concerned
Nigeria looking up
17 July 2017
Long-awaited legislative progress, peace in the Delta and some astute political management are creating optimism in the country's energy sector
Iraq starts to get grip on security
12 July 2017
Career diplomat Sir Jeremy Greenstock, now chairman of London-based Gatehouse Advisory Partners and of Lambert Energy Advisory, is optimistic about Iraq's future