“OH NO’S” More Dreaded Oil Slowdown

Courtesy of Platts:

Growth Rate Hit 15-Month High; China Imported Gasoline for 1st Time since Late-2011

SINGAPORE, Oct. 27, 2014 /PRNewswire/ — China’s apparent oil demand* in September climbed to the second-highest level since 2005, with a growth rate that was the sharpest in 15 months, according to a just-released Platts analysis of Chinese government data. Platts began tracking apparent oil demand in 2005.

Apparent oil demand in September was 42.34 million metric tons (mt), or an average 10.35 million barrels per day (b/d) – up 7.4% from the same month a year ago.

Analysts said previous stimulus measures by the local government, including loosening of credit controls; the lifting of the annual summer ban on fishing in China’s waters; and autumn harvest activity in the farming sector buoyed domestic oil demand.

On a month-over-month basis, China’s apparent oil demand in September rose 6.2% from August. During the first nine months of the year, total apparent oil demand was 9.95 million b/d, an increase of 1.8% from the same period last year.

Crude throughput by refineries in September jumped 9.1% year over year to 42.02 million mt, or an average 10.27 million b/d, according to the latest data released by the National Bureau of Statistics (NBS). This was also the second-highest level on record and marks the third time this year that China’s refinery throughput exceeded 10 million b/d.

“The higher refinery run rates in September followed the end of a heavy schedule of refinery maintenance in summer,” said Song Yen Ling, Platts senior writer for China. “Major refineries, including PetroChina’s Lanzhou refinery and Sinopec’s Shijiazhuang refinery, returned to full operations after being closed in part or full for maintenance or upgrades.”

One interesting note – Platts says that China’s oil product imports are falling, down 19%. China is making even more in house than importing. Gasoline demand is also up 18%.