China consumed 33.35 million metric tonnes of crude oil in June, which was up nearly 2.6% from the corresponding month of 2008, and the third month in a row to register a year-on-year increase in demand, a Platts analysis of official data showed July 22.
Collective crude oil throughput at Chinese refineries rose to a new high of 31.92 million metric tonnes in June, or an average of 7.8 million barrels per day, dwarfing the previous record of 31.19 million metric tonnes processed in May.
The government raised domestic fuel prices twice in June, providing refiners an incentive to step up production. The price hikes on June 1 and June 30 lifted gasoline prices by $17 per barrel and gasoil by $19.65 per barrel.
Domestic crude production in June, however, failed to keep pace with the rise in refinery runs, inching up 1.8% from a year ago to 15.71 million metric tonnes (3.83 million barrels per day).
Meanwhile, China’s year-to-date oil demand is slightly below 2008 levels, as the strength in the second quarter 2009 (Q2) could not fully offset the slump in the first quarter (Q1).
Chinese oil demand in the first half of 2009, at 186.32 million metric tons, was 0.23% below the same period of 2008, Platts estimates.
“China appears to have decoupled itself from the world’s economic malaise for now, with Beijing’s Yuan 4 trillion stimulus package stoking domestic consumption and gross domestic product (GDP) growth rebounding to 7.9% in the second quarter from 6.1% in Q1,” said Vandana Hari, Asia news director at Platts.
“The new peak in Chinese oil processing rates in June was no doubt also helped by the government’s new domestic fuel pricing formula in use this year, which aims to protect refiners on costs and margins. But there is plenty of skepticism by oil market observers that domestic consumption will keep China’s engine running at the current pace in the coming months if its export markets continue to remain in the doldrums.”
