China's thirst for crude oil continues to increase, according to a recent analysis of Chinese government data, according to Platts, even as demand in developed countries continues to be weak.
According to the report, China's apparent oil demand rose close to 7% year over year in October, the latest month for which data is available. That puts Chinese demand at an average of 9.76 million barrels per day, nearly half of what demand is in the United States.
October demand was demand was slightly lower than the record 9.8 million b/d in September and the 9.77 million b/d seen in February this year, the Platts report said.
"We continued to see strong growth in apparent oil demand in October, particularly after the lackluster performance from June to August when demand contracted by about 0.3% year over year," said Song Yen Ling, Platts senior writer for China. "Most analysts now believe China's economy is on the mend and we should see a corresponding improvement in oil demand going into next year."
China's oil demand in October continued to be sustained by a recovery in economic growth. In September, demand had risen 9.1% year over year, a rebound from the 1.5% contraction in August to 8.95 million b/d, the lowest since September 2011.
Apparent oil demand was also boosted by higher refinery throughput, which rose 6.7% from October 2011 to 9.44 million b/d, according to data released by China's National Bureau of Statistics on November 13. This is the second highest on record after the 9.47 million b/d seen in September. Another factor contributing to the rise in apparent demand was the surge in net oil product imports of 3.8% year over year to 1.37 million mt in October.
The report is certainly a well needed reminder that even as demand for crude oil is slowly falling in the United States, the continued rise in China's economy is requiring continued reliance on crude oil. China's insatiable demand for crude is certainly one of the biggest reasons why oil prices remain at elevated levels. Now just think if the Chinese could get their hands on Canadian crude oil that's selling at a far lower price... the Keystone XL pipeline, if approved, would certainly help the Chinese and drive prices of Canadian oil much higher!