China oil demand contracts 0.8pct YoY in December
According to a just-released Platts China Oil Analytics report on the latest Chinese government data, China's apparent oil demand contracted by 0.8% in December 2015 from a year earlier to 11.35 million barrels per day (b/d).
Refinery throughput in December averaged 10.84 million b/d, a record high volume, data from the country's National Bureau of Statistics (NBS) showed January 19. This was a 1.4% increase both year on year and month on month.
Net imports of key oil products however slumped 32.5% from a year earlier to an average 514,000 b/d during the month, driven by significant exports of gasoil, jet fuel and gasoline, according to data from the General Administration of Customs.
For the whole of 2015, apparent oil demand in the country expanded by 5.8% to an average 11.11 million b/d. This was much stronger than in 2014, when oil demand grew by 4.7%. There were strong gains in transport fuels in China last year, as lower oil prices boosted consumption at the pump, while an expanding middle class also contributed to higher demand.
Looking ahead, Platts China Oil Analytics, an on-line platform for supply/demand and trade data, expects China's apparent oil demand growth to moderate to 2.4% in 2016, in line with an expected decline in GDP growth from 6.9% in 2015.
Platts China Oil Analytics Senior Analyst Song Yen Ling, said that “Gasoil and fuel oil will be the main laggards this year, although we still expect robust growth for gasoline, jet fuel and LPG.”.
Gasoil
Gasoil is the most widely consumed oil product in China. It is used in the transport sector as well as by industry and demand has been hit in the last three years because of declining economic growth. Apparent demand in December contracted for the fourth consecutive month, by 7.4% to an average 3.5 million b/d, bringing year-to-date apparent demand to 3.53 million b/d, a 0.5% contraction from 2014.
There could be an uptick in demand for lower pour point gasoil in January due to lower temperatures across China, although consumption by industry typically eases in the run-up to the Lunar New Year as factories and manufacturing plants shut for the holiday.
Gasoline
Apparent* demand for gasoline averaged 2.67 million b/d, which was a 1.8% increase year on year, the slowest pace of expansion seen since February 2015. Exports in December confounded expectations and rose to a record high level of 241,000 b/d, mainly because some state-owned refineries' sales were hit by competition from independent refineries, which offered significant discounts to move their product.
The slower sales by state-owned refiners was also reflected in an inventory build -- data from Xinhua's China Oil, Gas & Petrochemicals newsletter shows commercial stocks held by state-owned refiners rose 7% month on month at the end of December.
Mr Song said that “Gasoline demand will likely rebound this month as travel peaks for the Chinese New Year holiday. We expect gasoline exports to have eased to under 200,000 b/d in February.”
Fuel Oil
China's fuel oil apparent demand in December declined 2.7% year over year to 951,000 b/d, although demand for the year rose 13.2% to an average 927,000 b/d.
China's fuel oil consumption rebounded in 2015 as independent teapot refiners imported more residual oil known as petroleum bitumen blend as feedstock for their units. This was seen as a favorable alternative to fuel oil because of domestic consumption tax breaks. Total fuel oil and petroleum bitumen blend imports for the year surged 30% from 2014 to an average 504,000 b/d, with inflows of the latter tripling from a year earlier to 233,000 b/d.
Source : Oil Voice