April figures show a sixth-month low and the first yearly decline in three years for China's domestic oil market.
According to official data, industrial output and implied oil demand in China were lower than expected throughout April, possibly highlighting its exposure to a global slowdown and a credit crunch at home. Implied demand from the world’s second-largest consumer fell 0.5% in April from a year earlier to 9.31 million barrels-per-day, the lowest since October 2011.
In its most recent report, the International Energy Agency forecast China’s oil demand would grow 4.1% this year to 390,000 bpd. Despite the low-ball forecast, the report predicts real demand in April to be higher as refiners de-stock fuel inventories amid heavy maintenance.
Refinery runs were also low during the same period. Refineries processed just under 37 million tonnes in April, down 0.3% from a year earlier. To combat the falling production rate, the government has once again slashed the per-ton retail prices of gasoline and diesel by CNY 330 ($52.4) and CNY 310 ($49) respectively. Nonetheless, the last minute cuts will most likely have little effect on production, as fuel prices reach an all time high.