China’s oil demand soared 18.7% in November 2009 over the same month a year ago on the back of China’s economic recovery from the 2008 financial crisis.

A Platts analysis of official data showed that the apparent oil demand in China had soared 18.7% during November 2009 over the corresponding month last year. With this, the oil demand is estimated to have reached 33.67 Million Metric Ton (8.22 Million barrels per day) in November 2009 from 28.36 Million Metric ton a year ago (November 2008), as reported by Earth Times.

Oil demand surge in the month of November 2009 marked three straight months rise since September 2009 and resulted in double-digit annual growth for the world’s second largest oil consumer. The uptrend in oil demand is attributed to the recovery of economy from the global slowdown.

Moreover, the government stimulus package of 4 Trillion Yuan (US$ 586 Billion) to boost domestic consumption and spending has had a positive impact on oil products from jet fuel to naphtha. This forced the International Energy Agency (IEA) to revise its forecast for oil demand in China by around about 80,000 b/d on average for the current year (2009) and next year (2010).

The automobile industry growth is also scaling up oil demand in China. Vehicle production and sales were staggering in the past some months, which inflated the oil demand in the country.

It is worth noted that China imports a substantial share of oil from overseas countries to meet its energy requirement. Nearly 47% of oil demand is fulfilled through imports. Thus, high oil demand will result in trade with leading oil exporting countries such as Iran, Russia and Saudi Arabia.

According to a Research Analyst at RNCOS, “All the factors pushing up oil demand in China will continue to support in future. The fast growing automobile sector will further boost oil consumption given that China surpassed the US in automobile sales. Moreover, the astonishing upward movement in China’s oil demand will not have any effect on the crude oil prices because it is believed that oil demand and supply will remain balance next year. Thus, the oil prices will not increase in coming months.”

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