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China's April Oil Demand Jumps for First Time in Six Months
added: 2009-05-22

China consumed 31.47 million metric tons of oil in April, up a strong 4% from the corresponding month of 2008, a Platts analysis of official data showed May 21.

The data means Chinese demand showed its first year-on-year increase in six months last month.

The country's apparent oil demand for the January-April period was a cumulative 119.44 million metric tons, down 2.3% from the 122.28 million metric tons in the first four months of 2008.

The uptick in oil demand is the first sign from China, the world's second-biggest oil consumer after the US, that its massive economic stimulus plan and determined support for the manufacturing sector is restoring demand for core commodities like oil.

"April's implied oil demand from China is another signal to the markets that the first seedlings of a broad stabilization and recovery in oil demand are starting to poke through around the world," said Dave Ernsberger, Senior Editorial Director for Asia at Platts. "Much of the stabilization in oil markets, including steadier demand from China, has already been built into oil prices, which have already risen by a surprising 40% since mid-February. Traders in China report to us that growth in Chinese demand could be confirmed in months to come, thanks in part to anticipated stronger demand for gasoline and diesel in China this summer and higher crude oil processing thanks to the new 240,000 b/d Huizhou refinery and expanded Fujian refinery. Much will depend on how aggressively China allows gasoline and diesel prices to rise. The pressure for the government to raise prices around the country grows day by day, and sources say an increase could easily stifle the recovery that we are seeing."

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 General Administration of Customs and the National Bureau of Statistics.

Source: PR Newswire

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