Indian oil demand, which faced substantial pressures in 2018 because of rising rates and a weakened rupee, is set for recovery next year, Fitch Solutions Macro Research said in a note Thursday. “Indian oil demand will become an increasingly important driver of global demand growth, as China’s economy slows and the government pushes diversification away from oil,” Fitch Solutions, an affiliate of Fitch Ratings, said. It put fuel consumption growth at 6 per cent in 2019, up from 5.5 per cent this year.
The world’s third largest oil consumer will, however, not be able to replicate the strength of China’s demand, with growth becoming increasingly diversified across emerging markets. Although their populations are of similar size, the scale of the Indian economy and its capacity for growth are not comparable to that of China, it said, adding that demand will become increasingly diversified across emerging markets, in particular, those in Asia. While this will shelter prices from any “idiosyncratic shocks” to the Indian economy, the global demand growth is set to soften in both percentage and volume terms over the coming decade, dragged down by structural declines in developed markets and China, it said. Read more
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