(Refiles to fix second summary point)
* Sept demand up 12.5 pct, fastest since June 2006
* Robust growth, fed by record runs, off low yr-earlier
* Easing fuel stocks provide solid support for real demand
By Jim Bai and Chen Aizhu
BEIJING, Oct 26 China's apparent oil demand
rose 12.5 percent in September from a year earlier, the sixth
rise in a row and the fastest rate since June 2006, as refiners
operated at record rates amid a sustained recovery in economic
However, the robust September rate, anticipated by some
analysts, may have been inflated by a low base a year earlier
when implied oil demand inched 2.3 percent as the global
financial crisis began infiltrating into the world's second
largest oil market.
China used nearly 8.17 million barrels per day of oil last
month, Reuters calculations based on official data showed on
Monday, 460,000 bpd or 5.8 percent higher than August. For a
table of China's September oil demand, click [ID:nPEK284837]
The demand growth, the first double-digit rally since
August 2006, came as China's fuel stocks -- excluded from the
calculations -- edged lower for the second month in a row,
providing more solid fundamental support to global oil prices
CLc1 now near one-year high just under $80 a barrel.
"While we do not deny that other factors such as currency
movements are influencing oil price, there are also important
factors from the physical market that drove oil prices," Paul
Ting, an independent oil analyst, said in a recent note.
"It was not a coincidence that China's demand strength in
the past two months corresponded with oil price strength, nor
was it a coincidence that oil prices were weak in the first
quarter when China's oil demand was weak."
Demand for diesel, the main transportation fuel in China,
grew 7.7 percent from a year earlier, the first increase since
June and the fastest since Nov 2008, offering fresh evidence
that industry activities were picking up.
Chinese refineries processed a record 7.99 million bpd last
month, 14 percent higher than a year earlier, as growth in the
world's third largest economy quickened to 8.9 percent in the
third quarter from 7.9 percent in the second quarter.
For a graphic of China's crude oil runs, please click:
LOW BASE FACTOR
Analysts stressed the low base factor for last month's
double-digit expansion, which is likely to extend into coming
months as demand in late 2008 slid sharply amid worsening
impact from the global economic slowdown.
"Low base figure was one reason behind the double-digit
demand growth," said Qiu Xiaofeng, an oil analyst with China
Merchants Securities. "Destocking began in September last year
after hefty build-up in early months."
A year earlier, China returned to its historical role as a
net gasoline exporter while imports of diesel also slowed
sharply, after frenzy pre-Olympics stockbuilding pushed fuel
stocks to record rates.
"Double-digit demand growth rates were still likely in the
coming months given surging car sales, rebounding demand and as
well as base effect," said Qiu.
After slowing to single-digit rate in 2008 for the first
time in at least a decade, China's car sales last month jumped
83.6 percent from a year earlier to a new high at 1.02 million
units, data from China Association of Automobile Manufactures
Chinese oil demand shrank as steep as nearly 9 percent in
early this year, but has been gradually moving out of the
trough in past months thanks to Beijing's continuous efforts to
stimulate the economy, while many other countries were still
struggling with faltering demand.
To feed record refinery throughput as China started a
string of new crude units this year, China has brought in
record amount of crude imports, the world's second-largest
after the U.S..
Crude imports in September at 4.35 million bpd, off July's
peak at 4.62 million bpd, were 11 percent higher than the
average of 3.91 million bpd in the first nine months of this
year and 22 percent more than the 3.58 million bpd in 2008.
For a graphic of China's crude oil imports, please click:
(Reporting by Jim Bai, Eadie Chen and Chen Aizhu; Editing by