BEIJING: China's implied oil demand inched up 0.4 percent in May year-on-year, and rose marginally from April, when the figure fell for the first time in more than three years.
The world's second-largest oil user burned about 9.344 million barrels of oil per day (bpd) last month, among the lowest rates since last October, Reuters calculations based on preliminary government data showed on Sunday.
Despite slowing growth, China is still expected to make up nearly half of global incremental demand in 2012, according to the International Energy Agency (IEA).
Implied demand is calculated by adding crude oil throughput and net imports of refined oil products, but it omits stocks changes which are seldom disclosed by the government.
The daily rate compared to 9.3 million bpd in April and 9.31 million bpd in May 2011, Reuters figures showed.
The relatively weak May demand figure was in part a result of lacklustre refinery operations, which posted their second straight month of year-on-year decline at 9.03 million bpd, as high crude cost and a cooling economy weighed on fuel use.
"For both April and May we reported negative growth in our sales of diesel oil, as industrial fuel consumptions declined," said a fuel marketing official with state-run Sinopec Corp , Asia's largest refiner.
In its May report, the IEA forecast China's oil demand would grow 4.1 percent, or 390,000 bpd, this year, which would mean China still accounting for nearly half of global incremental demand in 2012.
China made a surprise interest rates cut on Thursday, a sign that Beijing was ready to use more aggressive measures to head off a sharper slowdown in the world's second-largest economy.
The deluge of economic data released over the weekend also showed China's inflation dipped to a two-year low in May while economic activity remained weak, reinforcing expectation that further policy easing could be in the pipeline.
A further easing in monetary supply, plus seasonal factors such as peak power use in summer as well as the government's two fuel price cuts in just over one month, may lend support to fuel consumption.
Chinese refineries will increase crude oil processing in June, gaining for a second month after runs sank to a 34-month low in April, a Reuters poll showed.
"Demand should recover somehow in June, as power shortage could be bigger (than last year) and our fuel sales should also rebound as it's time for buyers to replenish stocks after the two pump price cuts," said the Sinopec official.
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