China's apparent oil demand in November contracted 2.1% year on year to 40.88 million mt, or an average of 9.99 million b/d, according to Platts calculations Thursday based on final government data released Tuesday.
This is the second contraction in China's apparent oil demand this year after a 2.3% year-on-year fall in September, prior to reversing to positive growth of 0.9% year on year in October, when apparent demand averaged 9.71 million b/d.
This confirms Platts' estimate on China's November apparent oil demand earlier this month, based on preliminary government data.
China does not release official data on oil demand, or commercial and strategic oil inventories. Platts calculates apparent oil demand based on official data on refiners' crude throughput and net oil product imports.
The year-on-year contraction in apparent oil demand last month was on the back of a high base in November 2012, when apparent demand averaged 10.2 million b/d, the third highest on record.
Refinery throughput last month fell 0.6% year on year to 40.17 million mt, or an average of 9.81 million b/d, preliminary data from the National Bureau of Statistics showed December 10.
Meanwhile, net oil product imports slid 47.4% year on year to 710,000 mt, the fourth consecutive month that China's net oil product imports were less than 1 million mt.
Oil product imports in November slumped 19.4% year on year to 2.82 million mt, while oil product exports dipped 1.9% year on year to 2.11 million mt, according to data released by the General Administration of Customs December 8.
LOWER STOCKS INDICATE HIGHER CONSUMPTION
In a note Tuesday, Barclays Research said: "Subdued economic activity in China over November, with both industrial production and power generation registering slower [year on year] growth in November compared to October was one of the reasons behind weak oil appetite and refineries rationalizing [lower] runs."
The bank, however, expects December to "see better demand for oil products on restocking requirements."
Data from the official Xinhua news agency's China Petroleum Stockpile Statistics released Tuesday indicated that the country's commercial oil product stocks fell 2.7% at the end of November from a month earlier -- the fifth consecutive month of an overall draw in product inventories.
London-based Energy Aspects said Tuesday that "on the whole, once inventory changes are taken into account, Chinese oil demand continues to recover and we expect to see [a] similar growth trend of around 400,000 b/d in 2014."
Over January to November, Platts calculations show China's apparent oil demand grew 3% year on year to an average of 9.81 million b/d, outpacing the 2.2% expansion seen over the same period of 2012. CONTRACTION IN FUEL OIL, GASOIL
Turning to major individual oil products, only gasoline saw positive year-on-year growth in apparent demand in November, Platts calculations showed, based on detailed data from the General Administration of Customs released Tuesday.
Apparent demand for the fuel rose 3.8% year on year to 8.03 million mt during the month, as domestic output grew 3.3% year on year to 8.33 million mt and exports slipped 9.1% year on year to 300,000 mt. China does not import gasoline.
Fuel oil apparent demand slid 23.9% year on year to 2.68 million mt as output fell 4.2% year on year to 2.16 million mt. Imports plunged 29.3% year on year and 13% month on month to 1.47 million mt, while exports jumped 17.3% year on year to a three-month high of 950,000 mt. This is further evidence of China's independent teapot refineries using more crude oil as feedstock, moving away from fuel oil, Barclays said.
Domestic gasoil production fell 2.5% year on year to 14.6 million mt in November, while refiners skipped imports.
Gasoil exports totaled 210,000 mt. Although this was a 30% year-on-year and a 16% month-on-month drop, the volume was higher than the third quarter average of 90,000 mt.
Based on Platts' calculations, the gasoil export and production figures resulted in gasoil apparent demand falling 2.3% year on year last month to 14.39 million mt, although taken on a daily basis, it was the highest level in a year.
According to Xinhua, gasoil stocks fell by 3.7% month on month end- November. While the state agency does not provide absolute stock volumes, Energy Aspects estimated Tuesday that the drawdown likely left gasoil inventories at a record low of 50.8 million barrels.
In a differing view, Energy Aspects said if this stock draw is taken into account, it was likely that actual gasoil consumption increased year on year in November.
"Diesel inventories have been drawn down consistently since June, and this trend remains in place, adding a constructive element to the state of diesel consumption in the country," Barclays said.
