BEIJING: China’s apparent demand for oil grew 4.1% in October, a modest increase from September’s sluggish rate, after holiday travel and preparations for winter heating boosted consumption and pointed to a year-end rally.
Beijing hopes to rein in its overheating economy and improve energy efficiency, which could eventually dent oil demand growth, but it may not be soon enough to curb expansion in 2006, which is above analysts’ forecasts for the world’s number two oil user.
Consumption was 6.54mn bpd in October, the same daily usage as September despite the faster growth rate, Reuters calculations based on official data showed.
But over the first 10 months of the year implied demand - measured by net product imports plus refinery throughput, but excluding inventory changes that are not reported - climbed 7.7% to 6.59mn bpd.
With winter setting in, when demand for oil to heat houses and cars climbs, there is little sign of any fall-off.
“There doesn’t seem to be a reason why it would slow down dramatically in the last two months of the year,” said David Hurd at Deutsche Bank in Beijing.
“In fact, to the contrary, if it gets colder you would expect a little bit of a pickup,” he added.
In summer, warm weather and a booming auto market pushed demand growth to double-digit rates, raising concerns about a repeat of 2004 when Chinese oil consumption expanded around 15% and contributed to a rally in global oil prices.
Although growth has cooled since then and crude imports in October sank 3.8% to their lowest this year at 2.55mn bpd, underlying demand seems resilient.
“Subdued growth in China possibly reflects stock shifts rather than a lower trend growth,” the International Energy Agency (IEA), said in a recent report. – Reuters