Thursday, August 20, 2009
Thursday, 20 August 2009
Chinese oil demand continues to grow versus last year after reversing the first quarter's decline in April, official data showed August 19, though some of it could be attributed to stockpiling. Chinese refiners ratcheted up their combined crude oil processing volume to a new record high of 33.11 million metric tons, or 7.83 million barrels per day in July, and overall implied oil demand in the world's third largest economy rose 4.2% from a year ago to 34.92 million metric tons, according to a Platts analysis.
July was the fourth consecutive month to register a year-on-year increase in China's apparent oil demand, which includes barrels moving into storage.
The latest monthly data dwarfs the 33.51 million metric tons of apparent demand calculated in July 2008, when oil stockpiling ahead of the Beijing Olympics had propped up Chinese appetite more than usual.
Meanwhile, domestic crude oil production inched 0.3% lower to 16.14 million metric tons, or 3.8 million barrels per day in July. Chinese crude imports spiked in July to an all-time high of 19.64 million metric tons, or 4.66 million barrels per day, which is 42.4% greater than a year ago.
However, China's year-to-date implied oil demand is only marginally higher than the corresponding period of 2008, still weighed down by the slump in the first quarter. At 221.47 million metric tons, January-July consumption was just 0.69% above the 219.96 million metric tons recorded for the same period of last year.
"The recent robust Chinese oil demand growth rates seem counter-intuitive, given that exports, the mainstay of the Asian giant's economy, remained depressed in July," said Vandana Hari, Asia news director at Platts. "The continued rise in crude refining volumes is understandable because that puts more money into the pockets of the refiners under the government's new products pricing formula. But if end-user demand is not in sync, that simply translates to more oil moving into storage."
"Whether Chinese industrial activity is able to get fully back on track once Beijing's massive fiscal stimulus runs out will hold the key to the country's oil demand growth in the coming months," Hari added.
Platts calculates China's apparent or implied oil demand on the basis of crude throughput volumes at the domestic refineries and net oil product imports, as reported by the National Bureau of Statistics and Chinese customs. The government releases data on imports, exports, domestic crude production and refinery throughput, but does not give official figures on the country's actual oil consumption or stockpiles.
Platts releases its monthly calculation of China's apparent demand between the 18th and 26th of every month via press release and via its website. Any use of this information must be appropriately attributed to Platts.