China's apparent oil demand in April edged up just 0.3 percent year on year to 38.32 million metric tons (mt), or an average 9.36 million barrels per day (bpd), a just-released Platts analysis of recent Chinese government data showed.
This is the lowest year-on-year monthly growth in oil demand since June 2011, when it fell 8.2 percent to 9.02 million bpd, from a high base in the same month of the previous year.
"This is just another sign of China's economic slowdown," said Song Yen Ling, Platts senior writer for China. "We've seen this sort of evidence in crude oil imports and refinery runs, and now it's being reflected in terms of oil demand."
April demand was dragged down by low refining levels, with total runs falling 0.3 percent on year to 36.96 million mt, or an average 9.03 million bpd, according to National Bureau of Statistics data released on May 11.
April's crude oil processing volumes were also the lowest so far this year on a barrels-per-day basis compared with 9.07 million bpd in March, 9.32 million bpd in February and 9.38 million bpd in January.
Meanwhile, net oil product imports, rose 16.2 percent year on year to 1.36 million mt (323,680 bpd) in April, although this was down 24.4 percent compared with 428,400 bpd of imports in March.
In the first four months of the year, overall apparent oil demand averaged 9.57 million bpd, up 1.8 percent year on year, according to Platts' calculations.
Refinery runs were up 1.5 percent year on year to 9.2 million bpd for the first third of the year, while net oil product imports rose 7.5 percent to 359,360 bpd during the period.
And it was not only the oil markets where China's slowing economy was evident.
China's total exports grew 4.9 percent year on year in April, compared with 7.6 percent in the first quarter and 14.3 percent in the last quarter of 2011. Overall imports were stagnant at 0.4 percent in April, down from 7.1 percent in the first quarter and 20.6 percent in the fourth quarter of last year.
Bernstein Research said May 18 that China should see a rise in apparent oil demand – in the range of 4-5 percent – in the second half of the year given government measures to boost the economy. The People's Bank of China, the country's central bank, cut the reserve requirement ratio for bank lending on May 18 by 50 basis points, bringing it to 20 percent for large banks and 18 percent for smaller lenders. The move is expected to boost liquidity in the financial system by up to Yuan 400 billion ($63.2 billion).
"The government's aims to boost the economy will likely get things flowing again on the oil side," said Senior Writer Song. "But it will also depend somewhat on how serious China is about retail oil pricing reform so that markets are allowed to work more freely."
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