China's implied oil demand grew 9.6 percent in May from a weak base a year earlier but eased slightly from April, pausing after a rebound in fuel consumption as refineries stepped up production to take advantage of better margins this year.

The country consumed roughly 10.31 million barrels per day (bpd) of oil in May, up from 9.41 million bpd a year before but down slightly from 10.44 million bpd in April, according to Reuters calculations based on preliminary government data.

Implied oil demand is the sum of refinery throughput and net fuel imports, excluding changes to commercial fuel inventories.

Reuters will publish more detailed demand calculations later in the month with estimated adjustments in commercial stocks.

Fuel demand saw some recovery in the first four months of 2015 as a recovery in the oil market prompted refiners to pump at higher rates to benefit from better margins.

A crude oil manager at CNOOC Group, parent of CNOOC Ltd, said the firm's main 240,000-bpd refinery had been pumping at near full rates in the past few months.

Higher domestic diesel prices - raised three times in April and May - not only supported refinery production but also lured in sizable amounts of smuggled oil along the southern coast, according to an independent fuel dealer in south China.

"The higher diesel prices over the past two months were behind the growing demand and also the illicit inflows," the dealer said.

The National Development and Reform Commission, the country's top economic planner, has said China's implied refined oil products consumption grew 4.8 percent in the January-April period, with gasoline leading that growth at 9.1 percent and diesel at 1.1 percent.

Chinese refineries processed 7.4 percent more crude oil in May than a year before at 43.92 million tonnes, or 10.34 million bpd. That was down 1.4 percent from April on a daily basis.

Industry consultancy ICIS said more plants started planned maintenance in May and estimated some 881,000 bpd of throughput was lost as a result, significantly higher than in April.

But refiners that have not entered maintenance were keeping operations running at a good pace, industry officials said.

China's domestic crude oil production rose 2 percent to 18.14 million tonnes (4.27 million bpd) in May and recorded 1.8 percent growth for the first five months of the year, the data from the National Bureau of Statistics showed.

Source: www.reuters.com

Please leave comments and feedback below