China's apparent oil demand in November rose 2.6% year on year to 39.08 million mt or an average 9.54 million b/d, with the daily rate reaching the second-highest level this year, a Platts analysis Wednesday of recent statistics released by the government showed.
November oil demand at 9.54 million b/d, which was just a tad less than February's 9.58 million b/d, was boosted by record high crude throughput as refiners ran their plants at full capacity to replenish depleting diesel stocks.
November oil demand was also the third strongest on record, after December 2010's oil demand of 9.62 million b/d and February's 9.58 million b/d.
"The refiners have increased production after the end of maintenance, and they have been pressured by the government to increase output (of gasoline and diesel)," Zhang Liutong, an analyst with Facts Global Energy in Singapore, told Platts earlier.
China does not release official oil demand statistics. Platts calculates the country's oil demand based on official data on refiners' crude throughput and net oil product imports.
Local media have reported that widespread diesel shortages have once again affected the country in recent weeks, with long queues for limited supplies of diesel seen at retail stations in several provinces, prompting Beijing to call on the national oil companies to raise output.
"China's present economic development remains favorable, and demand and supply fundamentals for coal, electricity, oil and gas are balanced. But production, transportation and other constraints, and the unpredictable weather will make the task of ensuring stable supply a very difficult task," the country's top economic planning agency, the National Development and Reform Commission, said in a statement earlier this month.
In November, Chinese refiners processed 37.87 million mt of crude, or an average 9.25 million b/d, which was 3.3% higher year on year.
Daily throughput reached an all-time high last month as the country's two national oil companies -- PetroChina and Sinopec -- operated at full capacity after regular maintenance to replenish fast-depleting inventory, especially diesel.
Chinese companies produced 14.13 million mt of diesel in November, which was 5.2% more than October, data from the country's National Bureau of Statistics showed. Diesel output in November increased for the second straight month, after it dipped in August and September.
Meanwhile, China imported 4.8% less refined oil products last month, at 3.35 million mt, compared with a year ago, while oil product exports increased 2.9% to 2.14 million mt.
"China is lowering its over reliance on imported diesel. There is a general shift by Chinese companies from importing diesel to importing crude to refine it into diesel themselves," Simon Powell, CLSA's head of Asian oil and gas research, said earlier this month.
Powell noted that Chinese refiners would incur less losses if they import crude to produce diesel compared with selling imported diesel domestically.
