Platts Report: China's July Oil Demand Pulls Back From June's Record High

SINGAPORE, Aug. 19 /PRNewswire/ -- Platts -- China's apparent* oil demand slowed in July, dropping from June's record high of 36.74 million metric tons (mt) to 35.82 million mt or about 8.47 million barrels per day (b/d), according to the just released Platts analysis of official data from the People's Republic of China. The July demand figure is down 5.6% from June and is up only 2.7% from a year ago, a sharp drop off from the double-digit year-on-year gain reported for the prior month.

"The sharp drop in China's oil demand growth in July is a clear indication that Beijing's tightening policies are taking effect," said Mriganka Jaipuriyar, senior editor for Platts in Singapore. "With both industrial production and asset investment dropping in the month, it is not surprising that oil demand has slowed down too. Looking ahead, whether we actually see negative oil demand growth will depend on whether China decides to pursue its tighter policies or reverses them."

Chinese refiners boosted their combined crude throughput to 35.28 million mt or an average of 8.34 million barrels per day (b/d) in July. This is down 0.2% from June's 35.35 million mt. But the throughput was up 6.55% from July 2009 and offset a 70% decrease in net oil product imports over the same period to 540,000 mt in July 2010.

The refiners produced a total 27.54 million mt of major oil products in July, up 7.86% year on year, figures released earlier in the month by China’s National Bureau of Statistics showed.

Imports of oil products in July fell 22.28% year on year to 3.14 million mt and were down 13.74% from June's 3.64 million mt. Product exports, meanwhile, rose 16.6% year on year to 2.6 million mt and were up 15.5% from June's 2.25 million mt.  Net product imports were down 61% from June.

China's apparent oil demand in the first seven months of 2010 is up 11.4% from the same period a year ago. The January through July 2010 demand totaled 246.63 million mt or an average of 8.53 million b/d.

*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 National Bureau of Statistics and Chinese customs.

The government releases data on imports, exports, domestic crude production and refinery throughput data, but does not give official data on the country's actual oil consumption figure and oil stockpiles. Official statistics on oil storage are released intermittently.

Platts releases its monthly calculation of China's apparent demand between the 18th and 26th of every month via press release and via its website. Any use of this information must be appropriately attributed to Platts.

For more information on crude oil, visit the Platts website at www.platts.com.  For Chinese-language information on oil and the energy and metals markets, visit http://www.platts.cn/.

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SOURCE Platts