A new report estimates Chinese oil demand has hit its lowest level in almost a year.
The report, published by industry analyst Platts shows that China's oil demand has dipped to 38 million metric tons, or roughly 8.9 million barrels-per-day, during August. The last time Chinese oil demand was less than nine million bpd was in October 2010, when it first reached 8.95 million pbd. On a year-on-year basis, however, the August rate was still up by 7%.
The slump in demand has been mainly attributed to “low crude throughput at refineries during the month”. This, in turn, was due to refinery repairs and incidents at various plants across China. Most notable was PetroChina's Dalian refinery in northeast China, capable of producing up to 411,700bpd, which was shutdown after a pipeline explosion last month.
The reduced demand apparently reflects a “softening in refined product consumption”, according to a senior analyst at Platts and could spell even greater deceleration in demand over the next few months.
Despite demand slowing, China's oil imports contined to move ahead in August, with a 33% year-on-year rise to 3.4 million metric tons.