The world’s oil demand jumped by more than 3 million barrels per day (bpd) in May compared to April, nearing the record demand level seen in March this year, the latest data by the Joint Organizations Data Initiative (JODI) showed on Monday.
The increase in global oil demand was largely driven by a demand surge in China, as well as increases in India, Saudi Arabia, and the United States. China’s total oil product demand hit 17.37 million bpd in May, the JODI data showed. This was an increase of 1.7 million bpd compared to April, and the second-highest level ever reported in JODI.
Other Chinese oil data also pointed to strong demand—crude oil imports jumped by 1.8 million bpd to 12.15 million bpd in May, while refinery intake surged by 1.81 million bpd to 16.38 million bpd, according to the data.
Despite resilient Chinese oil demand, the market has been focused on weaker macroeconomic data from the world’s top crude oil importer, which has weighed on sentiment. For example, early on Monday, an underwhelming second-quarter GDP reading from China sent oil prices lower by more than 1%.
While global demand rose in May, crude oil production dropped by 800,000 bpd due to lower output in Saudi Arabia, which began a 500,000-bpd cut as part of a 1.6-million-bpd collective reduction with other OPEC+ producers.
Production in the United States also dropped, as did output in Canada, due to the wildfires in May, which forced operators to shut down some producing operations as a precautionary measure.
Canada’s crude oil production fell by 197,000 bpd in May and hit a 27-month low, JODI’s data showed.
Globally, crude inventories in JODI-reporting countries fell by 10 million barrels and stood at 324 million barrels below the five-year average. But product inventories rose by 32 million barrels and stood 25 million barrels below the five-year average, according to the data.