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The popularity of electric vehicles (EVs) has become a major trend in the automotive industry and energy market as the global quest for clean energy and sustainable transportation heats up. According to the latest forecast of Wood Mackenzie, an internationally renowned energy consultancy, global gasoline demand growth will halve in 2024 due to the surge in electric vehicles in China and the United States, a shift that is expected to put pressure on refinery margins.
Global gasoline demand is expected to increase by 340,000 b/d this year, the slowest increase since 2020, Wood Mackenzie noted in its latest report. Compared to last year's strong growth of 700,000 barrels per day, this year's growth momentum has slowed significantly.
Sushant Gupta, an analyst at Wood Mackenzie, said the slowdown in gasoline demand is closely related to the increased penetration of electric vehicles in the U.S. and China. In China in particular, gasoline demand growth has slowed significantly due to the rapid development of electric vehicle technology, policy support, and consumer recognition of eco-friendly mobility. According to Wood Mackenzie's forecast, China's gasoline demand is expected to grow by just 10,000 b/d this year, well below levels seen in past years.
In China, the penetration rate of new energy vehicles is climbing rapidly. According to the latest data released by the Passenger Car Market Joint Branch of the China Automobile Dealers Association, from April 1 to 14 this year, the wholesale and retail penetration rate of new energy vehicles in China both exceeded 50%, which marks that new energy vehicles have made significant progress in the Chinese market. From 2005 to 2015, it took 10 years for China's new energy vehicles to achieve market penetration of more than 1%, and now it has achieved a qualitative leap in just a few years.
Gasoline consumption on the mainland continues to declineIn recent years, the rapid development of new energy sources such as new energy vehicles, natural gas and ethanol gasoline has continuously promoted the substitution of traditional gasoline, resulting in a continuous decline in gasoline consumption in the mainland. According to the China Petroleum and Chemical Industry Federation, China's gasoline consumption reached 140.3752 million tons in 2021, a year-on-year increase of 20.75%. In the first three quarters of 2022, China's gasoline consumption reached 101.3332 million tons, a year-on-year decrease of 0.49%.
Sales of multi-cylinder gasoline engines account for the major share
In terms of gasoline engine types, the sales proportion of multi-cylinder gasoline engines increased from 34% in 2014 to 47% in 2020, decreased slightly in 2021, and rebounded to 47% from January to February 2022. At present, multi-cylinder gasoline engines occupy the main share of the domestic gasoline engine sales market.
Gasoline imports vary widely
The changes in the volume of gasoline imports on the mainland vary greatly, mainly due to the country's moderate adjustment according to the market supply and demand situation and the timely increase of strategic reserves of gasoline resources. In 2020, the mainland imported 480,000 tons of gasoline, a year-on-year increase of 44.09%. From January to October 2021, the import volume was 322,400 tons.
He Han, a crude oil researcher at Hengli Futures, conducted an in-depth analysis of the short-term and medium-term trends of the crude oil market. He believes that in the near term, due to only a small destocking of the supply and demand balance sheet and a weakening of the demand margin, the room for further growth of crude oil based on fundamentals is relatively limited. In addition, geopolitical premiums are expected to ease in the short term, which may lead to a correction in crude oil prices, and Brent crude oil prices are expected to fall back to the $80-85 per barrel range. However, in the medium term, oil prices will remain high due to geopolitical disruptions, unfalsified demand in the summer peak season, and intensified destocking of the supply and demand balance sheet.
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