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China’s Oil Demand Reaches Records Despite Slowing Growth


China’s apparent oil demand in December rose 0.7 percent year on year to 41.02 million metric ton (mt), or an average 9.69 million barrels per day (bpd), a Platts analysis of recent statistics released by the Chinese government showed.

“But even with that relatively slow rate of growth at the end of the year, the actual demand for December was the highest daily rate the country’s oil demand has ever reached,” said Calvin Lee, Platts Senior Writer for China.

Yet, the oil demand growth in December of 0.7 percent was the second time last year that the rate of increase was below 1 percent. On a quarterly basis, oil demand growth of 1.6 percent in the fourth quarter was the lowest among all four quarters in 2011.

The drop-off in oil demand growth in the second half of the year pulled the annual growth rate down to 6.1 percent in 2011, from 11.3 percent in 2010.

December’s apparent oil demand was a tad more than the previous all-time high of 40.73 million mt, or 9.62 million bpd, recorded in the same month a year ago, when the country was besieged by a diesel shortage.

For the whole year, China’s apparent oil demand was at 460.65 million mt, or an average 9.25 million bpd, 6.1 percent more than the previous year.

The 2011 figure was the highest-ever by the world’s second largest oil consumer and was the first time that oil demand has breached 9 million bpd for a full year. The rate of increase in 2011, however, was lower than the 11.3 percent growth recorded in 2010.

As far as December, Lee said, “High crude throughput and strong net refined product imports continue to lift the apparent oil demand, outweighing the slower growth rates and the recent drop-offs in gasoline and diesel consumption.”

In December, China’s refineries processed 39.23 million mt of crude oil, or an average 9.28 million bpd, with throughput hitting an all-time high for the second consecutive month.

December’s crude throughput was 1.3 percent higher compared with a year ago, and 0.3 percent more than November’s throughput of 9.25 million bpd, which was the previous record high.

Chinese state-owned refiners have been ramping up production since October—when most of their plants returned online after completing scheduled turnarounds—to replenish refined product inventories, particularly for diesel.

Sinopec and PetroChina have said previously that their refineries have been running at full capacity since October amid earlier signs of tightening supply of diesel in certain parts of the country.

Meanwhile, refined products imports rose 2 percent year on year to 4.04 million mt in December, the highest volume in nearly 2 1/2 years. December’s imports were also 20.6 percent more than the previous month.

In July 2009, oil product imports were also at 4.04 million mt.

Oil product exports in December were 19.1 percent higher year on year at 2.25 million mt.

Net product imports in December totaled 1.79 million mt—the highest in a year—a surprising figure considering that growth in gasoline and diesel consumption has waned in recent months according to earlier released data by the central government.

2 Comments on "China’s Oil Demand Reaches Records Despite Slowing Growth"

  1. Kenz300 on Thu, 26th Jan 2012 7:24 pm 

    In the past a world GDP slow down would cause oil prices to drop. Now with demand continuing with growth from China and India the world economies will not get that required drop in oil prices that in the past boosted economic growth. The era of cheap oil is over. Individuals, business and politicians need to develop policies to deal with it. Ignoring the problem will not make it go away. It will only get worse. Instead of complaining we need to move to developing plans to deal with it.

  2. BillT on Fri, 27th Jan 2012 1:35 am 

    Kenz, what kind of ‘plans’? I do not know of anyway to transform a Capitalist for-profit society to a, what, communist non-profit society without a major crash and reset of everything. Capitalism does not work without an ever expanding inexpensive energy source and those days are over.

    I find it interesting that a communistic society is what we will probably be forced to accept eventually. A real one where everyone produces for everyone’s benefit, not the split system we are used to.

    The alternative is the feudal system with lords and serfs and a few merchants to trade like the pre-coal/oil days. Interesting times coming.

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