Chinese oil demand rose more than 10 percent year-on-year in February to reach the second strongest demand level on record, as refineries scampered to pile up supplies in view of the upcoming peak demand season and adverse weather conditions.
A Platts analysis based on recent figures released by the government showed China's apparent oil demand in February touched 36.65 million metric tons (mt), or an average 9.58 million barrels per day (bpd). China is world's second largest oil consumer.
A Japanese announcement on Tuesday that it was releasing 22 days worth of oil from its reserves did not help stem the rise of oil prices. The worsening political scenario in the Middle East sustained the upward price momentum though the likely slowdown in the Japanese economy still acted as a possible dampener. In New York on Tuesday, West Texas Intermediate crude closed up $1.67, to $104 a barrel. The Daily FX said the escalating conflict in Libya will continue to pressure crude oil prices higher.
Chinese oil demand in February was 4.2 percent higher than January's 9.19 million bpd, and just a tad lower than the all-time high reached in December of 9.62 million bpd, according to a Platts release.
Platts said the February surge was fueled by higher crude throughput by refineries ahead of scheduled turnarounds and higher production by other plants coming back from planned maintenance.
Chinese oil companies have been eager to pile up on inventories of refined products, particularly diesel, to ensure adequate supplies to drought-hit areas and in anticipation of peak demand during the spring farming season between February and April, Platts senior writer Calvin Lee said.