Oil demand in China grows, easing MENA fears
China’s oil demand rose at its fastest pace in two years to hit a record high in November after its refiners raised output to replenish stocks, a sign that growth in the world’s second largest economy and oil consumer is picking up.
Apparent oil demand in China broke through the 10 million barrel-per-day (bpd) barrier for the first time ever, rising around 640,000 bpd from October to 10.4 million bpd. Refinery throughput also reached a record 10.13 million bpd last month. November’s implied oil demand figures were 610,000 bpd higher than the previous record in September – more than the daily consumption of South Africa and a positive indicator for oil exporters.
The 9 per cent year-on-year growth rate was the fastest in about two years and indicates a revival in the pace of fuel demand growth in China. Analysts expect the momentum to extend into next year as Beijing’s pro-growth policies are likely to create more demand for fuel from the infrastructure and industrial sectors.
“We expect the economy to recover further next year, which should help lift fuel demand... Industrial output is expected to grow quicker than the economy, bolstering demand for diesel and other industry-related fuel,” said Janet Kong, a senior researcher with China International Capital Corporation(CICC).
Reuters calculates implied fuel demand based on official data, released by the National Bureau of Statistics and the customs authority. The calculations add refinery throughput and net imports of key refined products, but exclude changes in fuel inventories, which China rarely publishes. China’s oil demand fell for the first time in at least three years in April as the economy slowed.
Since October, however, refineries have started to add new production facilities with a total capacity of 410,000 bpd to replenish stocks and meet a recovery in fuel demand. The International Energy Agency forecast Chinese oil demand would rise just 2.8 per cent or 260,000 bpd this year.