GO
Loading...

UPDATE 2-China's 2013 oil demand sees slowest rise in at least 22 years

Judy Hua and David Stanway
Monday, 20 Jan 2014 | 6:55 AM ET

* 2013 demand up 1.6 pct to 9.78 mln bpd

* Slowest rise since at least 1992 - IEA data

* Dec demand down 7.5 pct on yr to 10.06 mln bpd

(Recasts with IEA data comparison, analyst comments)

BEIJING, Jan 20 (Reuters) - China's oil consumption in 2013 posted the slowest rise in more than two decades, data showed on Monday, as softer economic growth sliced into demand for transportation and industrial fuels such as diesel.

While a slowdown in oil consumption by the world's second-largest user was expected, the sluggish rise could pressure global oil prices at a time OPEC member Iran's nuclear deal with world powers is raising the possibility of the Middle Eastern nation being allowed to pump and export more oil.

China's energy appetite has driven global oil demand growth for the past decade as usage slows in industrialized nations. Its slowing demand last year capped prices that would have otherwise soared on the plunge in exports from Iran, prolonged outages in Libya and disruptions in Sudan.

China's implied oil demand rose 1.6 percent in 2013, or 150,000 barrels per day (bpd) on the year, according to Reuters calculations based on preliminary government data. Reuters started calculating implied oil demand from 2005.

But data from the International Energy Agency (IEA) indicates that apparent oil demand has not grown as slowly since at least 1992, although its calculation methods may differ.

"China's oil demand has entered an of era of moderate growth," said an oil analyst with China International Capital Corp (CICC). "Diesel demand was almost flat last year, but gasoline demand kept rapid growth on rosy auto sales."

China's economy narrowly missed expectations for growth to hit 14-year lows in 2013, though some economists say a cool down will be inevitable this year as officials and investors hunker down for difficult reforms.

Waning momentum capped China's annual economic growth at a six-month low of 7.7 percent in the October-December quarter, a slowdown some analysts say may deepen this year as China endures the short-term pain of revamping its growth model for the long-term good.

The 1.6 percent growth in oil demand lagged an IEA forecast for 2013 growth at 3.8 percent, but was in line with a forecast by the country's top oil firm China National Petroleum Corporation (CNPC) which last week pegged 2013 oil demand at 1.7 percent.

CNPC has forecast China's oil demand growing 4 percent this year, with demand for gasoline being the main factor.

Implied oil demand in December was 10.06 million bpd, down 7.5 percent from a record high 10.88 million bpd a year earlier, but up 1.2 percent from November's 9.94 million bpd. Full-year consumption was 9.78 million bpd.

Implied demand is a combination of crude oil throughput and net imports of refined oil products. It ignores stocks changes, which are seldom disclosed by the government.

In its December report, the IEA estimated Chinese oil demand at 10.19 million bpd in 2013, up 370,000 bpd from 2012. The agency has forecast a similar, modest growth for this year at 3.7 percent to 10.57 million bpd.

IEA, whose monthly report is due on Tuesday, declined to comment on the government data.

REFINERY RUNS

China's refinery throughput rose just 0.2 percent in December over a year earlier and grew 3.3 percent for the whole of 2013, the latest data showed, slower than the previous year as less new refining capacity was added.

Refineries processed 42.02 million tonnes, or 9.9 million bpd, of crude oil in December, the National Bureau of Statistics said. Daily runs were around 1.3 percent higher than November's 9.77 million bpd.

Crude runs for the whole of 2013 expanded 3.3 percent at 478.58 million tonnes, or 9.57 million bpd, the statistics bureau said. That compared with 3.7 percent growth for 2012.

CNPC forecast last week China's crude runs to rise 5.1 percent to 509 million tonnes, or 10.18 million bpd, this year from 2013.

Two new refineries, owned separately by PetroChina and Sinochem Corp, and with a combined capacity of 440,000 bpd, are slated to open in the first quarter.

The two plants will provide most of China's additional demand for crude imports this year.

Sinochem said on Friday it started test runs at the Quanzhou plant last week, though it could take months for the 240,000-bpd refinery to go into commercial operation.

In December, China's net fuel imports fell 55 percent to 167,100 bpd. Net imports of refined fuel fell 28.8 percent to 212,500 bpd in 2013.

(Editing by Muralikumar Anantharaman)