China's April oil demand growth strongest since 2004

China's apparent demand for oil climbed 10.8 percent in April from a year earlier, the strongest rise since 2004, after an increase in state-set fuel prices encouraged refiners to boost supplies to the domestic market.
The world's second-largest oil consumer used 6.69 million barrels per day (bpd) last month, calculations based on official data showed, despite a fall in crude imports as refiners shunned soaring global markets.
Car sales soared by almost half over the first four months of the year, helping drive a 20 percent rise in demand for gasoline - which powers the vast majority of private cars in China - to around 1.2 million barrels per day (bpd) in April.
Fuel price caps have insulated China's drivers from the full brunt of rising global crude markets, so the modest 3 to 5 percent price rise in March offered middle-class car owners little incentive to trim use.
More price sensitive users, from farmers and fishermen to taxi drivers, have been insulated by government subsidies.
Nor is a steeper rise brought in last Wednesday - of 9.6 and 11.1 percent for gasoline and diesel respectively - expected to dent the expansion. "We would expect to see relatively strong growth through June as the price increase will encourage supply to the domestic market, thereby boosting apparent demand in the near term," said Jeff Brown, analyst at the International Energy Agency in Paris.
For the first four months, implied demand growth - net imports plus refinery output, but excluding inventory changes, which are not reported - was 6.50 million bpd.
This was 5.0 percent higher than the same period of 2005, roughly in line with the IEA's forecast for the full year. Forecasts of a hot and stormy summer and scattered power shortages could mean further demand growth as businesses and homeowners turn on individual diesel-fuelled generators to keep equipment and air conditioners running. But the electricity shortfall is likely to be less than a quarter of the crippling brownouts of 2004, that stretched world diesel markets, officials have said.
In April crude imports fell 1.8 percent as global prices soared and refiners trimmed purchases due to negative domestic margins. But for the first four months of the year imports were up over 17 percent at 2.99 million bpd.