Singapore, 22 March 2011

China's apparent oil demand* in February rose 10.1% year over year to 36.65 million metric tons (mt), or an average 9.58 million barrels per day (b/d), according to a Platts analysis based on recent figures released by the government. This is the second strongest demand level on record, occurring two months after hitting an all-time high.

Oil demand in February was 4.2% higher than January's 9.19 million b/d, and just a tad lower than the all-time high reached in December of 9.62 million b/d.

The rebound in oil demand, after a dip in January, was attributed to increased crude throughput by several refineries ahead of scheduled turnarounds and higher production by other plants coming back from planned maintenances.

"Chinese oil companies have been eager to pile up on inventories of refined products, particularly diesel, to ensure adequate supplies to drought-hit areas and in anticipation of peak demand during the spring farming season between February and April," said Calvin Lee, Platts senior writer, China.

Crude oil imports by the world's second largest oil consumer rose 7.8% year over year in February to 19.95 million mt, or 5.22 million b/d. Meanwhile, crude exports fell to a three-year low of 80,000 mt, which was 63.64% lower than a year ago, data released by the country's General Administration of Customs showed.

Imports of crude oil continued to climb last month as Chinese companies relied on foreign barrels to meet their feedstock requirements, with domestic crude production expected to remain flat this year.

Chinese state-owned refineries processed 35.21 million mt of crude oil in February or an average of 9.22 million b/d, surpassing the previous record high of 9.16 million b/d in December, the National Bureau of Statistics data showed.

Last month's crude throughput was 10.4% more than a year ago, and 4.9% greater than January's 8.79 million b/d.

Refineries belonging to Sinopec and PetroChina were earlier projected to raise crude runs to an average 89% in February, compared with 85% in January, according to a Platts monthly survey. The refineries operated at 80% capacity in December.

February's increased crude throughput came mainly from Sinopec, which plans to process 228 million mt of crude oil in 2011, up 8% from 211 million mt in 2010, industry sources said earlier.

Net oil products imports in February were 5.1% higher year over year at 1.44 million mt, but 15.8% less than net oil product imports of 1.71 million mt recorded in January.

"Crude throughput will likely see a small dip in March as several refineries head into complete shutdown for scheduled maintenance. However, the likely drop will be minimal as Sinopec is poised to increase refinery run rates at some plants to make up for some of the lost throughput," Lee said.

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