China’s oil demand shows sign of a slowdown

China’s “implied” oil demand in August slipped to the lowest rate, to 8.94 million barrels per day (bpd), this year as plant maintenances and accidents reduced refinery production. Implied demand consists of crude throughput plus net imports of refined oil products. China’s refinery throughput rose 4.5% in August over the same period a year ago, one of the slowest growth in nearly two years. Dalian Petrochemical Corp., PetroChina’s largest plant, had to shut down a 200,000 bpd crude unit in mid-July after a fire and only restarted it at the end of August. A diesel tank caught fire at the same plant in late August, the second in less than two months, which caused the firing of the plant manager. On a year-on-year basis, however, implied oil demand still managed to expand by 7.8%. Fuel consumption in the world’s second largest oil market has been losing steam since May, with growth easing off the double-digit expansion seen since last year as a result of climbing crude oil costs. “Oil demand growth from the coastal area has slowed but that of the central and western parts of the country is picking up more rapidly,” Dai Jiaquan, an oil market researcher with PetroChina’s parent CNPC, told Reuters. Dai said that on a net basis, China’s oil demand growth is still on track to reach an annual growth rate of about 6%. (September 10, 2011)
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