Effects of China growth... Do you know the effects on oil price?

By Christian Schmollinger July 12 (Bloomberg) -- China, the world's second-largestoil market, may increase consumption of the fuel by 5.5 percentin 2007, versus 6.1 percent in 2006, on strong economic growth,the International Energy Agency said. Demand for oil products, including gasoline and diesel,will rise to 7.4 million barrels a day in 2007, or 390,000barrels a day more than 2006, the Paris-based IEA, an adviser to26 oil-consuming nations, said in its Monthly Oil Market Report.

The world's fastest-growing major economy will continue tolead global oil demand growth, forecast at 1.8 percent next year,the IEA said. The nation's consumption has more than doubled ina decade, outpacing domestic output and forcing refiners toboost imports from producers such as Angola and Saudi Arabia.The boom contributed to record-high prices. China's demand ``is projected to remain strong over thesecond half of 2006 and throughout 2007,'' said IEA in thereport. ``With transportation fuels, which account for about 40percent of total demand, rising by approximately 6 to 8percent.''

China's demand growth is rebounding from a slowdown lastyear, to 2.6 percent from 15.8 percent in 2004. Higher retailprices for gasoline and diesel may temper demand growth, the IEAsaid today. China, which controls fuel prices to shield consumers andcompanies from rising energy costs, on May 24 raised the priceof gasoline by 10.6 percent, diesel by 12.3 percent and jet fuelby 10.3 percent. Oil demand in May grew by 11 percent asrefiners possibly geared up to supply the market ahead of theprice rise, the IEA said.

India's oil demand will climb by 2.8 percent to 2.7 millionbarrels a day in 2007, the IEA said. For the rest of Asia,demand will increase by 2.6 percent to 9.1 million barrels a day.