After half a year of strong oil price rises, Asian crude demand is slowing and by some measures falling, and many market participants suspect it is not just a cyclical phenomenon, but also a product of more permanent structural changes.

With years of annual economic growth of 7-10 per cent in China and similar recent figures from India, Asia-Pacific has overtaken the Americas to become the world&#39;s biggest oil consuming region, accounting for almost 40 per cent of global demand.

But an industry that has come to rely on Asia&#39;s booming thirst for oil could soon be scratching around for growth.

Thomson Reuters Eikon data shows that Asian crude oil tanker imports have fallen, albeit from record levels, for four straight months and by 12 per cent since March to around 82 million tonnes (20 million barrels per day), slightly below last year&#39;s levels.

Much of the surprise decline is explained by conditions in China, the region&#39;s biggest consumer, accounting for 27 per cent of Asia-Pacific demand and 13 per cent of global demand.

With its long-term growth outlook now camped perhaps permanently below 7 per&nbsp;cent, most analysts expect vehicle sales in China will slow accordingly.

They have already slipped to 2.1 million at the end of May, down from a peak of almost 2.8 million in December 2015.

Refiners across Asia said that was starting to hit their business.

&quot;Asian oil demand growth is slowing down. China, Asia&#39;s largest market, is experiencing sluggish demand,&quot; said a South Korean refiner.

As domestic refiners sell off surplus fuel, China&#39;s exports of diesel and gasoline, the main refined fuels for industrial and passenger vehicles, have both soared.

&quot;Asia refiners have already started to pull back ... and there are reports of (oil) cargoes struggling to sell,&quot; said Adam Longson of Morgan Stanley this week in a note to clients, adding that demand in the third quarter could fall further.

Ship brokers say traders have started chartering supertankers to store supplies that consumers can&#39;t absorb.

One key pillar of recent demand is never coming back. Analysts think China has nearly finished building its strategic petroleum reserves (SPR).

Oil analysts at JPMorgan estimated in a note to clients last week that the SPR was now at 400 million barrels, which they believed was close to capacity.

&quot;Our model suggests a 15 per cent month-on-month decline in China&#39;s crude oil net imports in September, or a loss of 1.2 million barrels versus August and 0.8 million barrels less from the 12-month average,&quot; they said. 
&nbsp;

EFFICIENCY SAVINGS

Structural changes in demand are not limited to China.

For Asia&#39;s most developed oil markets, Japan and South Korea, analysts say long-term demand will steadily fall.

Japan&#39;s oil consumption, once 6 million barrels per day (bpd) and 10 per cent of global demand, has fallen to not much more than 3.5 million bpd, or under 5 per cent of world consumption. It will fall further as government consolidates its refiners.

&quot;There are various factors. Nuclear power generation has restarted, pushing down energy demand. When nuclear plants shut down (after the 2011 Fukushima disaster), Japan imported lots of crude. Other factors include shrinking population, saturated status of automobiles and efficiency improvement,&quot; said Kaname Gokon, strategist at brokerage Okato Shoji.

The situation is similar in South Korea.

&quot;Korea&#39;s oil demand is at a standstill, and demand is expected to decrease because of greenhouse gas emissions policy and alternative fuel. On top of that, if a growing number of people switch to use electric cars, oil demand is bound to fall,&quot; said Moon Young-seok, senior researcher at state-run Korea Energy Economics Institute.

Even in India, the industry&#39;s big hope to compensate for slower demand in China, demand for new cars is tepid.

While Indian motorbike sales remain strong, the number of new cars sold has fallen below 215,000 per month, down from almost 260,000 in October and well below the monthly record of just over 300,000 more than four years ago.

While industry doesn&#39;t expect Asian oil demand to decline outright, they say the growth seen over the past decade may never be revisited.

The fuel economy standards of new cars, which stagnated below 30 miles per gallon (mpg) between 1980 and 2010, have improved to around 40 mpg now and are expected to rise to mid-50 mpg by the early 2020s, according to industry estimates. That&#39;s without considering the rise of hybrid or pure electric vehicles.

&quot;Energy efficiency will play a huge role in slowing the growth in global demand, as energy use per unit of economic output is likely to fall by 40 per cent (between 2014 and 2040),&quot; US oil giant ExxonMobil says in its 2016 outlook. 
 
(Reuters)

The slowing Asian demand for crude is not just a cyclical phenomenon, but the product of more permanent structural changes

After half a year of strong oil price rises, Asian crude demand is slowing and by some measures falling, and many market participants suspect it is not just a cyclical phenomenon, but also a product of more permanent structural changes. With years of annual economic growth of 7-10 per cent in China and similar recent figures from India, Asia-Pacific has overtaken the Americas to become the world's biggest oil consuming region, accounting for almost 40 per cent of global demand. But an industry that has come to rely on Asia's booming thirst for oil could soon be scratching around for growth. Thomson Reuters Eikon data shows that Asian crude oil tanker imports have fallen, albeit from record levels, for four straight months and by 12 per cent since March to around 82 million tonnes (20 million barrels per day), slightly below last year's levels. Much of the surprise decline is explained by conditions in China, the region's biggest consumer, accounting for 27 per cent of Asia-Pacific demand and 13 per cent of global demand. With its long-term growth outlook now camped perhaps permanently below 7 per cent, most analysts expect vehicle sales in China will slow accordingly. They have already slipped to 2.1 million at the end of May, down from a peak of almost 2.8 million in December 2015. Refiners across Asia said that was starting to hit their business. "Asian oil demand growth is slowing down. China, Asia's largest market, is experiencing sluggish demand," said a South Korean refiner. As domestic refiners sell off surplus fuel, China's exports of diesel and gasoline, the main refined fuels for industrial and passenger vehicles, have both soared. "Asia refiners have already started to pull back ... and there are reports of (oil) cargoes struggling to sell," said Adam Longson of Morgan Stanley this week in a note to clients, adding that demand in the third quarter could fall further. Ship brokers say traders have started chartering supertankers to store supplies that consumers can't absorb. One key pillar of recent demand is never coming back. Analysts think China has nearly finished building its strategic petroleum reserves (SPR). Oil analysts at JPMorgan estimated in a note to clients last week that the SPR was now at 400 million barrels, which they believed was close to capacity. "Our model suggests a 15 per cent month-on-month decline in China's crude oil net imports in September, or a loss of 1.2 million barrels versus August and 0.8 million barrels less from the 12-month average," they said. EFFICIENCY SAVINGS Structural changes in demand are not limited to China. For Asia's most developed oil markets, Japan and South Korea, analysts say long-term demand will steadily fall. Japan's oil consumption, once 6 million barrels per day (bpd) and 10 per cent of global demand, has fallen to not much more than 3.5 million bpd, or under 5 per cent of world consumption. It will fall further as government consolidates its refiners. "There are various factors. Nuclear power generation has restarted, pushing down energy demand. When nuclear plants shut down (after the 2011 Fukushima disaster), Japan imported lots of crude. Other factors include shrinking population, saturated status of automobiles and efficiency improvement," said Kaname Gokon, strategist at brokerage Okato Shoji. The situation is similar in South Korea. "Korea's oil demand is at a standstill, and demand is expected to decrease because of greenhouse gas emissions policy and alternative fuel. On top of that, if a growing number of people switch to use electric cars, oil demand is bound to fall," said Moon Young-seok, senior researcher at state-run Korea Energy Economics Institute. Even in India, the industry's big hope to compensate for slower demand in China, demand for new cars is tepid. While Indian motorbike sales remain strong, the number of new cars sold has fallen below 215,000 per month, down from almost 260,000 in October and well below the monthly record of just over 300,000 more than four years ago. While industry doesn't expect Asian oil demand to decline outright, they say the growth seen over the past decade may never be revisited. The fuel economy standards of new cars, which stagnated below 30 miles per gallon (mpg) between 1980 and 2010, have improved to around 40 mpg now and are expected to rise to mid-50 mpg by the early 2020s, according to industry estimates. That's without considering the rise of hybrid or pure electric vehicles. "Energy efficiency will play a huge role in slowing the growth in global demand, as energy use per unit of economic output is likely to fall by 40 per cent (between 2014 and 2040)," US oil giant ExxonMobil says in its 2016 outlook. (Reuters)

Oil industry losing burn of Asian demand

CHANGE PICTURE! IF THIS STORY IS VERIFIED, GET APPROPRIATE PIC,&nbsp;THEN PUBLISH 
 
According to reports in the Sri Lankan press, the&nbsp;Sri Lankan government has received the approval of the Cabinet of Ministers to enter into a treaty with Ukraine to extradite criminals hiding in the Eastern European country.

President Maithripala Sirisena in his capacity as the Minister of Defense has presented the proposal to the cabinet for approval.

The ColomboPage News Desk reports that&nbsp;the Sri Lankan Co-Cabinet spokesman, Minister Gayantha Karunathilake, said the agreement &quot;will provide the opportunity to request the authorities in Ukraine to receive criminals who have engaged in illegal activities in this country and sought protection in Ukraine&quot;.

The treaty comes as&nbsp;the Sri Lankan government is attempting to arrest a fugitive envoy currently believed to be in Ukraine.

The government has sought arrest and deportation of Sri Lanka&#39;s former Ambassador to Russia, Udayanga Weeratunga, who is a nephew of former President Mahinda Rajapaksa, over several allegations including that the envoy supplied weapons to a terrorist group in Ukraine and is connected to the death of an embassy employee.

Comes as South Asian country's former Russian ambassador is wanted for abetting a Ukrainian terror group

CHANGE PICTURE! IF THIS STORY IS VERIFIED, GET APPROPRIATE PIC, THEN PUBLISH According to reports in the Sri Lankan press, the Sri Lankan government has received the approval of the Cabinet of Ministers to enter into a treaty with Ukraine to extradite criminals hiding in the Eastern European country. President Maithripala Sirisena in his capacity as the Minister of Defense has presented the proposal to the cabinet for approval. The ColomboPage News Desk reports that the Sri Lankan Co-Cabinet spokesman, Minister Gayantha Karunathilake, said the agreement "will provide the opportunity to request the authorities in Ukraine to receive criminals who have engaged in illegal activities in this country and sought protection in Ukraine". The treaty comes as the Sri Lankan government is attempting to arrest a fugitive envoy currently believed to be in Ukraine. The government has sought arrest and deportation of Sri Lanka's former Ambassador to Russia, Udayanga Weeratunga, who is a nephew of former President Mahinda Rajapaksa, over several allegations including that the envoy supplied weapons to a terrorist group in Ukraine and is connected to the death of an embassy employee.

Sri Lanka enters treaty with Ukraine to extradite criminals hiding in the Eastern European country

Asian stocks slipped on Tuesday ahead of the US Federal Reserve&#39;s two-day meeting that begins later in the day&nbsp;amid growing worries that this month&#39;s referendum in Britain could see it exit the European Union. 
 
The Pound and Euro have suffered in recent sessions as economists fear a so-called Brexit would tip Europe back into recession. Voters appear divided ahead of the June 23-referendum, with the &quot;Out&quot; campaign widening its lead over the &quot;In&quot; camp, according to two opinion polls published by ICM on Monday. 
 
MSCI&#39;s broadest index of Asia-Pacific shares outside Japan was down 0.6 per cent&nbsp;after Wall Street lost ground for the third straight session. 
 
Japan&#39;s Nikkei stock index skidded 1.5 per cent after tumbling 3.5 per cent on Monday. 
 
&quot;Short-term hedge funds have started betting on Brexit&nbsp;and futures players will likely dominate the market&#39;s move today,&quot; said Norihiro Fujito, senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities. 
 
The benchmark 10-year Japanese government bond yield fell to as low as minus 0.175 per cent, a fresh record, before edging back to minus 0.170 per cent. 
 
Uncertainty over this week&#39;s Federal Reserve policy meeting has weighed on markets, even while the US central bank is widely expected to leave rates unchanged after the much weaker-than-expected May non-farm payrolls report. 
 
&quot;The committee was actively preparing markets for a June-July rate hike until the release of the May employment report and is unlikely to give up its tightening bias absent additional information that labour markets are weakening,&quot; analysts at Barclays wrote. 
 
&quot;Nevertheless, the abrupt slowing in employment and falling long-run inflation expectations should raise alarm bells, and risk management concerns suggest delaying action until after the outcome of the UK referendum,&quot; they said. 
 
The Bank of England, Swiss National Bank and the Bank of Japan will also meet this week, and are similarly expected to stand pat on policy with the Brexit vote looming. 
 
The dollar index, which tracks the greenback against a basket of six rival currencies, edged up slightly to 94.395, moving back toward the overnight high of 94.750. That was its highest since the downbeat US jobs report toppled the dollar on June 3. 
 
The perceived safe-haven Yen has benefited from investors&#39; risk aversion. The dollar was down 0.2 per cent at 105.99 Yen, moving back toward Monday&#39;s low of 105.735, its weakest level since early May. 
 
Japanese Finance Minister Taro Aso issued a fresh warning against renewed strength in the Yen, saying that he would &quot;firmly respond&quot; if rapid and speculative moves persisted in the foreign exchange market. 
 
The Euro was slightly lower at $1.1290. Against the Yen, it skidded 0.3 per cent to 119.69, moving back toward a more than three-year low plumbed in the previous session. 
 
Sterling also notched a three-year low against the Yen on Monday, and was last down 0.8 per cent at 150.35 Yen. Against the Dollar, the Pound dropped 0.6 per cent to $1.4180. 
 
Crude oil prices continued to slip, pressured by the strong US dollar and worrying economic prospects in Europe and Asia, though losses were contained by ongoing supply outages in Nigeria. 
 
Brent was down 1 per cent at $49.84 per barrel, while US crude shed 1.1 per cent to $48.34.

The Pound and Euro have both suffered over fears that UK leaving the EU will cause another European recession

Asian stocks slipped on Tuesday ahead of the US Federal Reserve's two-day meeting that begins later in the day amid growing worries that this month's referendum in Britain could see it exit the European Union. The Pound and Euro have suffered in recent sessions as economists fear a so-called Brexit would tip Europe back into recession. Voters appear divided ahead of the June 23-referendum, with the "Out" campaign widening its lead over the "In" camp, according to two opinion polls published by ICM on Monday. MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.6 per cent after Wall Street lost ground for the third straight session. Japan's Nikkei stock index skidded 1.5 per cent after tumbling 3.5 per cent on Monday. "Short-term hedge funds have started betting on Brexit and futures players will likely dominate the market's move today," said Norihiro Fujito, senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities. The benchmark 10-year Japanese government bond yield fell to as low as minus 0.175 per cent, a fresh record, before edging back to minus 0.170 per cent. Uncertainty over this week's Federal Reserve policy meeting has weighed on markets, even while the US central bank is widely expected to leave rates unchanged after the much weaker-than-expected May non-farm payrolls report. "The committee was actively preparing markets for a June-July rate hike until the release of the May employment report and is unlikely to give up its tightening bias absent additional information that labour markets are weakening," analysts at Barclays wrote. "Nevertheless, the abrupt slowing in employment and falling long-run inflation expectations should raise alarm bells, and risk management concerns suggest delaying action until after the outcome of the UK referendum," they said. The Bank of England, Swiss National Bank and the Bank of Japan will also meet this week, and are similarly expected to stand pat on policy with the Brexit vote looming. The dollar index, which tracks the greenback against a basket of six rival currencies, edged up slightly to 94.395, moving back toward the overnight high of 94.750. That was its highest since the downbeat US jobs report toppled the dollar on June 3. The perceived safe-haven Yen has benefited from investors' risk aversion. The dollar was down 0.2 per cent at 105.99 Yen, moving back toward Monday's low of 105.735, its weakest level since early May. Japanese Finance Minister Taro Aso issued a fresh warning against renewed strength in the Yen, saying that he would "firmly respond" if rapid and speculative moves persisted in the foreign exchange market. The Euro was slightly lower at $1.1290. Against the Yen, it skidded 0.3 per cent to 119.69, moving back toward a more than three-year low plumbed in the previous session. Sterling also notched a three-year low against the Yen on Monday, and was last down 0.8 per cent at 150.35 Yen. Against the Dollar, the Pound dropped 0.6 per cent to $1.4180. Crude oil prices continued to slip, pressured by the strong US dollar and worrying economic prospects in Europe and Asia, though losses were contained by ongoing supply outages in Nigeria. Brent was down 1 per cent at $49.84 per barrel, while US crude shed 1.1 per cent to $48.34.

Asian shares slip as Brexit vote looms

Regulators in Hong Kong and Singapore have asked banks doing business there to disclose if they have dealings with entities and individuals named in the leaked &#39;Panama&nbsp;Papers&#39;&nbsp;which contained details on thousands of shell firms, people familiar with the requests said.

The leaked documents from&nbsp;Panama&nbsp;law firm Mossack Fonseca, which contained information on 214,000 offshore companies, revealed that Hong Kong was the most active centre in the world for the creation of shell firms, which have many legitimate purposes, but can also be used to hide assets&nbsp;and avoid taxes.

According to two sources familiar with the situation, the Hong Kong Monetary Authority (HKMA) and the Monetary Authority of Singapore (MAS) sent letters to the banks in April. The two central banks did not set a firm deadline for a reply, the sources said.

One source, who had seen the letter sent to Hong Kong banks, said the request asked about their dealings with a list of between 16 and 18 names.

The sources did not disclose which banks were written to nor the names on the lists.

Bankers operating in Hong Kong have told Reuters that the&nbsp;Panama&nbsp;Papers&nbsp;have triggered a massive compliance exercise there, with banks carefully combing through their accounts to ensure there are no problems.

HKMA said in a statement that it regularly collects information from banks on various issues or risks relating to anti-money laundering or counter-financing of terrorism, but it could not discuss details of its dealings.

MAS did not offer fresh comment but referred to its statement on May 10 that said it was reviewing the latest batch of information released on the&nbsp;Panama&nbsp;Papers.

&quot;If there is evidence of wrongdoing by any individual or entity in Singapore, we will not hesitate to take firm supervisory and enforcement action,&quot; they said then.

Reuters contacted several large banks operating under MAS and HKMA jurisdiction, but they declined to comment when asked if they had received letters.

According to the two sources, HKMA and MAS were trying to ascertain whether banks operating in their jurisdictions carried out due diligence and checked the source of funding when dealing with clients named in the&nbsp;Panama&nbsp;Papers, they said.

One source said some banks in Singapore had already responded to the MAS request.

The leak has put tax avoidance at the top of the global agenda by showing the extent to which tax havens have been used by politicians and businesspeople around the world.

Besides Hong Kong, Singapore and China were among the busiest office for Mossack Fonseca, which worked with more than 2,200 banks, law firms, corporate secretaries and other middlemen in the territory.

A portion of the leaked data released by the International Consortium of Investigative Journalists showed 51,295 offshore entities and 25,982 individuals linked to Hong Kong, and 4,188 entities and 33,290 individuals linked to China.

Some of the individuals in China routed their money through Hong Kong.

Mossack Fonseca&#39;s list of clients includes senior political figures such as Chinese President Xi Jinping&#39;s brother-in-law. Appearing on the list is not evidence of any wrongdoing. None has made any comment.

The requests by HKMA and MAS follow a series of measures taken by regulators in different parts of the world to crack down on irregularities by financial firms and undisclosed offshore wealth.

New York state&#39;s financial regulator last month told 13 foreign banks doing business there to hand over details about their dealings with a law firm in&nbsp;Panama&nbsp;that helped set up thousands of shell companies.

Many global private banks have put Asia at the centre of their growth strategy, hiring thousands of people and tapping new customer segments in a region expected soon to boast more billionaires than the United States.

Hong Kong and Singapore are two of the biggest centres for offshore wealth management in the region, which with 4.7 million individuals owning U.S.$1 million or more in liquid assets is the largest and fastest growing wealth region.

In a sign of regulatory crackdown against breaches of anti-money laundering rules, Singapore last week moved to shut Swiss bank BSI&#39;s operations there over its dealings with scandal-hit Malaysian fund 1Malaysia Development Berhad.

Hong Kong and Singapore regulators have asked banks to reveal if they have any links with those involved in the Panama Papers leak.

Regulators in Hong Kong and Singapore have asked banks doing business there to disclose if they have dealings with entities and individuals named in the leaked 'Panama Papers' which contained details on thousands of shell firms, people familiar with the requests said. The leaked documents from Panama law firm Mossack Fonseca, which contained information on 214,000 offshore companies, revealed that Hong Kong was the most active centre in the world for the creation of shell firms, which have many legitimate purposes, but can also be used to hide assets and avoid taxes. According to two sources familiar with the situation, the Hong Kong Monetary Authority (HKMA) and the Monetary Authority of Singapore (MAS) sent letters to the banks in April. The two central banks did not set a firm deadline for a reply, the sources said. One source, who had seen the letter sent to Hong Kong banks, said the request asked about their dealings with a list of between 16 and 18 names. The sources did not disclose which banks were written to nor the names on the lists. Bankers operating in Hong Kong have told Reuters that the Panama Papers have triggered a massive compliance exercise there, with banks carefully combing through their accounts to ensure there are no problems. HKMA said in a statement that it regularly collects information from banks on various issues or risks relating to anti-money laundering or counter-financing of terrorism, but it could not discuss details of its dealings. MAS did not offer fresh comment but referred to its statement on May 10 that said it was reviewing the latest batch of information released on the Panama Papers. "If there is evidence of wrongdoing by any individual or entity in Singapore, we will not hesitate to take firm supervisory and enforcement action," they said then. Reuters contacted several large banks operating under MAS and HKMA jurisdiction, but they declined to comment when asked if they had received letters. According to the two sources, HKMA and MAS were trying to ascertain whether banks operating in their jurisdictions carried out due diligence and checked the source of funding when dealing with clients named in the Panama Papers, they said. One source said some banks in Singapore had already responded to the MAS request. The leak has put tax avoidance at the top of the global agenda by showing the extent to which tax havens have been used by politicians and businesspeople around the world. Besides Hong Kong, Singapore and China were among the busiest office for Mossack Fonseca, which worked with more than 2,200 banks, law firms, corporate secretaries and other middlemen in the territory. A portion of the leaked data released by the International Consortium of Investigative Journalists showed 51,295 offshore entities and 25,982 individuals linked to Hong Kong, and 4,188 entities and 33,290 individuals linked to China. Some of the individuals in China routed their money through Hong Kong. Mossack Fonseca's list of clients includes senior political figures such as Chinese President Xi Jinping's brother-in-law. Appearing on the list is not evidence of any wrongdoing. None has made any comment. The requests by HKMA and MAS follow a series of measures taken by regulators in different parts of the world to crack down on irregularities by financial firms and undisclosed offshore wealth. New York state's financial regulator last month told 13 foreign banks doing business there to hand over details about their dealings with a law firm in Panama that helped set up thousands of shell companies. Many global private banks have put Asia at the centre of their growth strategy, hiring thousands of people and tapping new customer segments in a region expected soon to boast more billionaires than the United States. Hong Kong and Singapore are two of the biggest centres for offshore wealth management in the region, which with 4.7 million individuals owning U.S.$1 million or more in liquid assets is the largest and fastest growing wealth region. In a sign of regulatory crackdown against breaches of anti-money laundering rules, Singapore last week moved to shut Swiss bank BSI's operations there over its dealings with scandal-hit Malaysian fund 1Malaysia Development Berhad.

Asian regulators ask banks to reveal Panama Papers links - Sources

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