An increase in manufacturing and construction activity combined with a growth in air travel is expected to bolster oil demand in India, a Hindu Businessline (HBL) report said.
A likely increase is expected in the consumption of diesel, petrol, and aviation turbine fuel (ATF). The demand is expected to reach 5.55 million barrels per day for the April-June quarter of 2023, the report said.
Citing data from Opec's monthly oil market report, HBL reported that India was consuming 5.40 million barrels of oil every day in the first quarter of the current calendar year. The growth in demand was supported by a rise in manufacturing and services activity.
Future prospects for the air travel industry are optimistic and a healthy trend is expected to drive higher oil demand in the country, the Opec report said.
The report added, "In Q2 2023, oil demand is projected to rise by 0.3 mb/d year-on-year (YoY). The government’s proposed increase in capital spending is expected to support consumer’s purchasing power and boost the momentum of economic activity as construction and manufacturing activity accelerates."
A better-than-expected rebound in Chinese economic activity may further empower oil demand in Asia which should be complemented by the rise in domestic demand for air travel, the HBL report said.
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Demand for oil in India registered a year-on-year growth of 0.2 million barrels per day in March 2023. The demand was supported by strong trends in the manufacturing and service sectors.