China's apparent oil demand in July rose 6.6% to an average 9.82 million barrels per day (b/d) or 41.52 million mt, according to a just-released Platts analysis of Chinese government data.

On a month-over-month basis, apparent demand in July was down 1.7% from June but still demonstrated robust growth, which observers believe is a sign China’s recovering economy.

Apparent oil demand in June had soared 11.7% from June a year ago to an average 9.99 million b/d ¬– which was the highest growth rate since February 2011.

Data released August 9 by China’s National Bureau of Statistics (NBS) showed that refinery runs, or capacity utilization, was 9.53 million b/d in July, up 7.1% from the same time a year ago. But on a month-over-month basis capacity utilization in July was down 1.5% from June.

China’s General Administration of Customs data released August 21 showed net oil products imports on a year-over-year basis fell 7.6% in July to 1.22 million mt, largely due to a 14.7% surge in oil product exports to 2.03 million mt. Oil product imports rose 5.2% to 3.25 million mt.

Gasoline exports in July more than doubled on a year-over-year basis to 310,000 mt, while jet/kerosene outflows jumped 33.9% from July 2012 to 790,000 mt. However, a decrease was seen in fuel oil exports, which were down 7.1% from July a year ago to 780,000 mt. Gasoil outflows were down 22.2% to 140,000 mt last month compared to a year ago.

Jet/kerosene imports increased 3.9% year over year to 530,000 mt in July, while fuel oil imports slipped 5.4% to 1.91 million mt. July gasoil imports were down 50% from a year ago to 20,000 mt. China typically does not import gasoline.

For the first seven months of 2013, China's total apparent oil demand on a year-over year basis increased 4.2% to an average of 9.86 million b/d. This growth rate is higher than the 1% July-to-July growth rate seen in 2012.

“The data in July seemed to be supported by positive aspects of China’s economy,” said Song Yen Ling, Platts senior writer for China. “Industrial production, electricity generation and fixed-asset investment all saw higher growth rates in July than June.”

“Based on current indications, this pace of growth appears on target to continue into 2014, analysts say, especially if this pattern of growth holds into the fourth-quarter peak winter period,” Song said.

Apparent demand for gasoil, which makes up the largest component of overall oil product demand, rose by 3.5% to 14.38 million mt, last month versus a year ago, which is higher than the 2.4% expansion seen in June. In the prior two months, apparent demand for gasoil declined on a monthly annualized basis.

China's gasoil production in July rose 3.3% versus July 2012 to 14.5 million mt. This is the second consecutive month of positive gasoil output growth. Gasoil production had contracted 1.6% year-over-year in May and 2% in April versus April 2012.

Jet/kerosene apparent demand surged 11.3% to 1.88 million mt last month compared to a year ago, largely driven by an increase in domestic supply availability. Output was up 21% to 2.14 million mt in July versus the prior year.

Gasoline apparent demand growth moderated to 6.5% year-over-year in July to 7.83 million mt, following double-digit growth rates in May and June versus 2012. Domestic production rose 8.8% year-over-year to 8.14 million mt.

Tags: Platts