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Some of the world’s largest oil producers are starting to see evidence of a rebound in demand from China, even as other economies around the world remain hobbled by the coronavirus.
While it’s still early days into the Chinese recovery, limited initial sales data was encouraging, Irving, Texas-based Exxon Mobil Corp said in its first-quarter earnings presentation.
In a major milestone on April 8, the Asian nation lifted the lockdown on Wuhan – where the pathogen first emerged – and is tentatively firing up its economic engine.
Prior to that, strict nationwide restrictions meant the world’s second-largest economy recorded its deepest contraction in decades over the first quarter.
As the country reopened, BP Plc’s soon-to-be chief financial officer, Murray Auchincloss, said on an earnings call earlier this week that demand has started to recover in China in its lubricants division in recent weeks. BP chief executive officer Bernard Looney told CNBC that the company was seeing its road transportation business in China back to 90-95% of pre-coronavirus levels, while aviation had recovered to about 50%. Exxon gave projections of a quick recovery across finished lubricants, polyethylene and retail fuels in Fujian province.
Elsewhere BP’s Auchincloss cautioned, however, that sales remain down in Europe, the US and India, regions that are still under various stages of lockdown aimed at curbing the spread of the virus.
Royal Dutch Shell Plc also highlighted a potential recovery, saying that there were a few “greenshoots” in its business in places like China where demand volume at some retail stations is above pre-Covid-19 levels.
“That gives a signal that the potential for a rapid recovery in some parts of our businesses and in certain circumstances can be good,” Shell CFO Jessica Uhl said on its earnings call.
