Platts Report: China Oil Demand Rose 0.5% in March Versus a Year Ago

     Platts Report: China Oil Demand Rose 0.5% in March Versus a Year Ago

Demand Contracts in First Quarter of 2014

PR Newswire

SINGAPORE, April 25, 2014

SINGAPORE, April 25, 2014 /PRNewswire/ -- China's apparent oil demand* in
March rose 0.5% year over year to 41.55 million metric tons (mt) or an average
9.83 million barrels per day (b/d), a just-released Platts analysis of Chinese
government data showed.

The growth in apparent oil demand last month is significantly less than in
previous years, when it averaged 1.9% in March 2013 and 4.2% in March 2012.

China's refinery crude throughput volumes last month rose 2.6% to 9.91 million
b/d versus a year ago, according to the latest data from China's National
Bureau of Statistics.

Oil product exports rose 3.4% year over year to 2.74 million mt in March,
while imports of oil products slumped more than 24% on an annual basis to 2.37
million mt, a 19-month low, according to China's General Administration of
Customs data released April 10. This made China a net exporter of oil products
for the first time since early 2010, at 370,000 mt for the month. This
compared with net imports of oil products of 480,000 mt in March 2013.

"The net export of oil products is evidence that China is now facing a period
of overcapacity as oil product supply outpaces domestic demand," said Song Yen
Ling, Platts senior writer for China. "Refiners are coping by sending more oil
products overseas, as well as lowering their run rates."

The higher oil products exports came amid reports of notable inventory build
of gasoil, gasoline and jet/kerosene and weaker-than-expected domestic oil
consumption in the first quarter (Q1) of the year.

China's Q1 apparent oil demand slid 0.6% versus the same period a year ago to
an average 10 million b/d, marking the first contraction in Q1 apparent oil
demand since 2008. The decline in demand followed a slowdown in China's gross
domestic product (GDP) growth from 7.7% in the fourth quarter of 2013 to 7.4%
in Q1 2014.

Within individual oil products markets, apparent demand for gasoil in March
fell an annual 0.8% to 3.43 million b/d. Net exports fell 15% from a year
earlier to 340,000 mt and domestic production declined 1.2% to 14.62 million

Apparent demand for gasoline continued robust last month, surging 12.2% year
over year to 2.41 million b/d, supported by expansion in automobile sales.
Domestic output by refiners rose 11.8% from March 2013 to 9.33 million mt,
while net exports rose 5.9% to 540,000 mt.

Apparent demand for fuel oil moved in the opposite direction, sliding 7.7%
year over year to 637,000 b/d, on the back of a 34.5% decrease in net imports
to 720,000 mt. Domestic output rose more than 5% from a year ago to 2.39
million mt. The lower demand was due to reduced appetite by China's
independent refiners, known as "teapots" and which use imported fuel oil as a
major cracking feedstock. The teapot refiners have reduced their utilization
in recent months on poorer demand and in response to increased access to crude
oil, an alternate feedstock.


                         Mar '14 Mar '13 % Chg Feb '14 Jan '14 Dec '13 Nov '13
Net crude imports        23.52   22.78   +3.2  22.88   28.07   26.69   23.46
(million mt)
Crude production         17.64   17.66   -0.1  16.11   17.58   17.90   17.28
(million mt)
Apparent demand (million 41.55   41.34   +0.5  40.56   40.11   42.76   40.88
Apparent demand ('000    9,825   9,775   +0.5  10,618  9,484   10,111  9,988

Sources: China's General Administration of Customs, National Bureau of
Statistics, Platts

Month-to-month demand in China is generally viewed to be subject to short-term
anomalies which are of interest and important to note, but which often fail to
reveal the country's underlying demand trends. Year-to-year comparisons are
viewed by the marketplace to be more indicative of the country's energy

*Platts calculates China's apparent or implied oil demand on the basis of
crude throughput volumes at the domestic refineries and net oil product
imports, as reported by the National Bureau of Statistics and Chinese customs.
Platts also takes into account undeclared revisions in NBS historical data.

The government releases data on imports, exports, domestic crude production
and refinery throughput data, but does not give official data on the country's
actual oil consumption figure and oil stockpiles. Official statistics on oil
storage are released intermittently.

Platts releases its monthly calculation of China's apparent demand between the
18th and 26th of every month via press release and via its website. Any use of
this information must be appropriately attributed to Platts.

Platts uses a conversion rate of 7.33 barrels of crude per metric ton, the
widely-accepted benchmark for markets East of Suez.

For more information on crude oil, visit the Platts website at
For Chinese-language information on oil and the energy and metals markets,

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