In the latest sign that Chinese oil demand growth is not as reluctant as some indicators might suggest, refinery throughput in the Asian powerhouse came close to 15 million bpd last month.
The daily average of 14.87 million bpd represented an 18.9% increase on the year and was the second-highest since records began, Reuters noted in a report.
At the same time, the April figure was a decline on the March average which was record-breaking, driven by solid fuel demand from abroad and the race to build inventories ahead of the start of maintenance season.
Refinery throughput rates in March hit 14.9 million barrels daily, after an average of 14.36 million bpd for January and February. Both figures were substantially higher than throughput rates a year earlier when China was in the grips of Covid lockdowns.
Economists expect China to account for the biggest portion of oil demand growth this year, although their expectations differ in the part about the actual size of the increase. It varies between 500,000 and 1 million bpd.
Demand in China is being watched closely by analysts and oil traders alike but the latter appear to have developed an uncertainty about where this demand was heading.
Reports of a decline in manufacturing activity instead of sustained growth was one reason for the doubts to emerge even though demand for oil smashed records, topping 15 million bpd for the first time ever in March.
“A return to normal mobility in China is the single biggest demand driver, accounting for 1.0 million barrels per day (b/d) of the 2.6 million b/d increase this year,” Wood Mackenzie said in a report in April.
Per that report, as much as 38% of global demand growth this year would come from China, whose economy grew by 2.2% during the first quarter, up from a 0.6% growth rate in the final quarter of 2022.
By Charles Kennedy for Oilprice.com
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