China - the great moderation

China's teapot refiners have enjoyed cheap oil prices. But the country's breakneck pace of demand growth will not return in 2017

China's GDP growth has been slowing, but we still expect expansion of 6.8% and 6.7% in 2016 and 2017, respectively. The country's goods and services sector will remain the economic driving force but the weaker oil price has done little to stimulate domestic demand while inflicting a raft of negative effects on Chinese oil producers. In response, 2016 saw three key developments in China's oil sector: falling production, rising imports and, importantly, a growing role for the country's independent refineries, the so-called teapots. The market, meanwhile, remained transfixed by China's Strategic Petroleum Reserve (SPR) and the potential for its capacity to increase in 2016. That said, we believ