China's oil demand rises, signaling new growth phase

China consumed 33.35 million metric tons of crude oil in June, up nearly 2.6% from the same month a year ago, and the third month in a row to register a year-on-year increase in demand. Collective crude oil throughput at Chinese refineries rose to a new high of 31.92 million metric tons in June, or an average of 7.8 million barrels per day. The Chinese 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 and gasoil prices by a total of 1,000 yuan (US$146.7) per metric ton and gasoil 1,000 yuan (US$146.7) per metric ton. 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 tons. China’s year-to-date oil demand is slightly below 2008 levels, as the strength in the second quarter 2009 could not fully offset the slump in the first quarter. Chinese oil demand in the first half of 2009, at 186.32 million metric tons, was 0.23% below the same period a year ago. (July 22, 2009)