China oil demand predicted to take off Wood Mackenzie, the energy consultant, has said China is on track to spend $500bn a year on crude oil imports by 2020, in one of the most bullish forecasts yet of oil demand growth in the world's second-largest economy. Analysts at the Edinburgh-based group, one of the most respected analysts of the oil market, said Chinese net oil imports would rise to 9.2m barrels a day by 2020. The figure includes refined products such as diesel and gas as well as crude oil. That is significantly higher than the 8mb/d of net imports forecast by the International Energy Agency in its World Economic Outlook late last year, or by the Energy Information Administration of the US government in its annual energy outlook in April. Surging Chinese demand for raw materials has been the engine driving commodity markets, including oil, in recent years, as the country's economy has regularly grown at more than 10 per cent a year. But growth is expected to slow this year, and demand for raw materials is expected to be hit particularly hard, with Beijing expected to place less emphasis on exports and industry. Many commodity prices have fallen this summer, as concerns about bad debt in China's shadow banking system grew. Wood Mackenzie consultants, however, remain bullish about the country's economic prospects and its appetite for commodities. "We expect Chinese oil demand to continue growing smoothly, even as the economy transitions from a manufacturing to a more consumer-orientated economy," said Harold York, a vice-president at the company. Wood Mackenzie expects the Chinese economy to grow almost 8 per cent a year in the decade to 2020, compared with the IEA's base scenario of 7 per cent growth. We factor in fuel-efficiency measures, but we expect the number of cars to grow so much it will overwhelm efficiency measures Harold York, Wood Mackenzie The forecast takes into account expected gains in fuel efficiency, much as the IEA's analysis factors in policies to contain energy consumption. "We factor in fuel-efficiency measures, but we expect the number of cars to grow so much it will overwhelm efficiency measures," said Mr York. According to Wood Mackenzie, the rapid rise in Chinese imports will lead to an oil import bill of $500bn by 2020, exceeding the peak US import bill of $335bn. Wood Mackenzie also expects China to pay more than the US for each barrel of oil it imports. Domestic production of high-quality light and sweet crude is surging in the US as the shale revolution gathers pace, reducing the need for the US to import premium crudes. China is also on the cusp of displacing the US as the largest importer of crude from Opec, the oil producers" cartel, as US imports decline rapidly thanks to growing domestic production.