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Platts: China Oil Demand up 3.5% in November from 2013

By  AOG Staff Wednesday, 24 December 2014 11:30
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China's apparent oil demand in November rose 3.5% year-over-year to 42.18 million tonne, or an average 10.31MMb/d, according to a just-released Platts analysis of Chinese government data. The official data also showed China turning into a net exporter of oil products during the January – November period this year.

China’s apparent oil demand in November increased 2.2% from October. Meanwhile, total apparent oil demand was 9.99MMb/d during the first 11 months of the year, an increase of 2.3% over the same period last year.

In an unprecedented development, China has become a net exporter of oil products over January to November this year, with oil product exports surpassing imports by 70,000-tonne.

Stimulus measures implemented by the Chinese government and a seasonal uptick in year-end demand helped buoy consumption in November.

“Chinese refiners requested for more oil product quotas from the government for 4Q,” says Platts senior writer for China, Song Yen Ling. “This was mostly to accommodate additional jet fuel exports because of robust production growth.”

Crude throughput by refineries in November was up 5.5% year-over-year to 42.25 million tonne, or an average 10.32MMb/d, according to data released by the National Bureau of Statistics (NBS) mid-December.

China's oil product imports tumbled 16% year-over-year to 2.37 million tonne in November, while exports climbed 15.6% to 2.44 million tonne, according to data released by the General Administration of Customs. Over January to November, net oil product imports fell 26.1% to 26.78 million tonne while oil product outflows rose 3.8% to 26.85 million tonne.

Apparent demand for gasoil in November was up 4.4% from a year ago to 14.97 million tonne. Gasoil accounts for the largest volume across all oil products. Up to 70% of the fuel is used in the transport sector while the remainder is used by various sectors, including construction, farming and fishing, mainly for industrial heating or to power machinery. Because of China’s economic torpor in the last two years, gasoil demand growth has been sluggish although expansion has picked up in recent months on a slight recovery in demand.

Last month’s domestic production of gasoil was 15.12 million tonne, a 3.9% increase on a year-over-year basis while net outflows of the fuel slumped 28.6% to 150,000-tonne – the first year-over-year decrease since March this year. Chinese refiners typically draw down their domestic stockpiles of gasoil throughout the year and start building inventories during the fourth quarter in preparation for the following year’s Chinese New Year holidays in January or February.

Apparent demand for gasoline in China continued its upward trend, although growth eased to 9% to 8.74 million tonne in November as curbs on traffic around Beijing during the Asia Pacific Economic Cooperation (APEC) summit took effect during the first half of the month.

Domestic gasoline production jumped 10.6% year-over-year to 9.2 million tonne last month, although exports surged 53.3% from a year earlier to 460,000 tonne.

Fuel oil apparent demand in November inched up 1% year-over-year to 2.74 million tonne, buoyed by a 4.4% increase in domestic output to 2.29 million tonne while net imports fell 13.5% to 450,000-tonne.

Over the first 11 months of the year, fuel oil apparent demand slumped 13.8% from a year ago to 30.7 million tonne, as domestic production dipped 1.4% to 23.27 million tonne, while net imports slid 38.1% to 7.43 million tonne.

Lower consumption, particularly by the bunker sector and independent “teapot” refineries, has resulted in lower import volumes this year.

Month-to-month demand in China is generally viewed to be subjected to short-term anomalies which are of interest and important to note, but often fail to reveal the country’s underlying demand trends. Year-to-year comparisons are viewed by the marketplace to be more indicative of the country’s energy profile.

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