NEWS ANALYSIS
NEWS ANALYSIS Chinese oil appetite is up Year on year consumption is up for third month in a row as China picks up global shortfall
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lion stimulus package stoking domestic consumption and gross domestic product (GDP) growth rebounding to 7.9% in the second quarter from 6.1% in Q1,” said Vandana Hari, Asia news director at Platts. “The new peak in Chinese oil processing rates in June was no doubt also helped by the government’s new domestic fuel pricing formula in use this year, which aims to protect refiners on costs and margins. But there is plenty of scepticism by oil market observers that domestic consumption will keep China’s engine running at the current Merrill Lynch and UBS economists predict further growth in the dragon economy. pace in the coming months if Wang Tao, an economist its export markets continue to demand for oil imports, which will go some way to stemming with UBS Securities and one of remain in the doldrums.” the expected drop in demand the experts on the forecast panel, said China could achieve the from the OECD countries. GLOBAL VIEW China’s official news agency, set goal of 8% economic growth In the last week of July, Bank of America Merrill Lynch raised Xinhua, also reported that for the full year. Chinese banks lent a record its forecast for the world’s third- China’s economy showed more largest economy to grow 8.7%, signs of recovery and was likely 7.37 trillion yuan (1.08 trillion from 8.0% previously. Recent to grow by around 9% in the third US dollars) in the first half to economic data “convinced the quarter, quoting a senior econo- shore up the economy. “China’s market that China’s recovery mist. Wang Xiaoguang, director economy was in the V-shaped is real,” said Merrill economist of Macroeconomics Division of recovery course. The government stimulus Institute of Economic Research Ting Lu. Merrill now expects China’s of the National Development package could help the country achieve the eight-percent gross domestic product to grow and Reform Commission. China’s economy was fore- economy expansion goal, while 9.2% in the third quarter and 11.3% in the fourth quarter. It cast to grow by 8.9% in the third the next priority for China also raised next year’s growth quarter year-on-year, according is creating more jobs,” Sun rate to 10.1% from 9.6%. Such to the report released by the Chunming, an economist with growth is likely to lead to greater Peking School of Development. Nomura Securities told Xinhua. Getty Images
hina consumed 33.35 million metric tonnes of crude oil in June, which was up nearly 2.6% from the corresponding month of 2008, and the third month in a row to register a year-on-year increase in demand, according to a Platts analysis of official data in July. Crude oil throughput at Chinese refineries rose to a new high of 31.92 million metric tonnes in June, or an average of 7.8 million barrels per day, dwarfing the previous record of 31.19 million metric tonnes processed in May. Domestic crude production in June, however, failed to keep pace with the rise in refinery runs, inching up 1.8% from a year ago to 15.71 million metric tonnes (3.83 million b/d). Meanwhile, China’s year-todate oil demand is slightly below 2008 levels, as the strength in the second quarter 2009 could not fully offset the slump in the first quarter. Chinese oil demand in the first half of 2009, at 186.32 million metric tonnes, was 0.23% below the same period of 2008, Platts estimates. “China appears to have decoupled itself from the world’s economic malaise for now, with Beijing’s Yuan 4 tril-
August 2009 Oil&Gas Middle East
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