(EnergyAsia, May 23 2012, Wednesday) — China’s oil demand in April edged up just 0.3% year on year to 38.32 million metric tons (mt), or 9.36 million barrels per day (b/d), said US energy media Platts.
Based on its analysis of recent Chinese government data, Platts said this was the lowest year-on-year monthly growth in oil demand since June 2011, when it fell 8.2% to 9.02 million b/d, from a high base in the same month of the previous year.
Song Yen Ling, Platts senior writer for China, said: “This is just another sign of China’s economic slowdown. We’ve seen this sort of evidence in crude oil imports and refinery runs, and now it’s being reflected in terms of oil demand.”
April demand was dragged down by low refining levels, with total runs falling 0.3% on year to 36.96 million mt, or an average 9.03 million b/d, according to National Bureau of Statistics data released on May 11.
April’s crude oil processing volumes were also the lowest so far this year on a barrels-per-day basis compared with 9.07 million b/d in March, 9.32 million b/d in February and 9.38 million b/d in January.
Meanwhile, net oil product imports, rose 16.2% year on year to 1.36 million mt (323,680 b/d) in April, although this was down 24.4% compared with 428,400 b/d of imports in March.
In the first four months of the year, overall apparent oil demand averaged 9.57 million b/d, up 1.8% year on year, according to Platts’ calculations.
Refinery runs were up 1.5% year on year to 9.2 million b/d for the first third of the year, while net oil product imports rose 7.5% to 359,360 b/d during the period.
And it was not only the oil markets where China’s slowing economy was evident, said Platts.
The country’s total exports grew 4.9% year on year in April, compared with 7.6% in the first quarter and 14.3% in the last quarter of 2011. Overall imports were stagnant at 0.4% in April, down from 7.1% in the first quarter and 20.6% in the fourth quarter of last year.
Bernstein Research said May 18 that China should see a rise in apparent oil demand – in the range of 4-5% – in the second half of the year given government measures to boost the economy.
The People’s Bank of China, the country’s central bank, cut the reserve requirement ratio for bank lending on May 18 by 50 basis points, bringing it to 20% for large banks and 18% for smaller lenders. The move is expected to boost liquidity in the financial system by up to 400 billion yuan (US$63.2 billion).
Ms Song said: “The government’s aims to boost the economy will likely get things flowing again on the oil side. But it will also depend somewhat on how serious China is about retail oil pricing reform so that markets are allowed to work more freely.”