China's apparent oil demand fell 1.5% year on year in August to 37.87 million metric tons (mt), or an average 8.95 million barrels per day (b/d), the second monthly contraction this year, a just-released Platts analysis of recent Chinese government data showed.

The August decline follows a 1.9% dip in June to 9 million b/d, although demand flipped back to positive growth of 2.4% at 9.2 million b/d in July. Apparent demand in August was the lowest since September 2011, when demand was also at 8.95 million b/d.

The apparent demand was likely dragged down by lower oil product imports, which fell 34.3% year on year to 2.24 million mt. With exports at 2.11 million mt for the month, net product imports were 130,000 mt in August, down nearly 90% year on year and the lowest since January 2010, when China was a net exporter of products.

“There is still an argument to be made that government incentives for growth are going to kick-in and we’ll see a rise in China’s consumption in the remaining months of the year,” said Song Yen Ling, Platts senior writer for China. “And with refineries coming out of maintenance and prices rising, we’re likely to see some improved refinery throughput rates due to higher refining margins,” she said.

Tags: Platts