China's oil demand growth at three-year low in 2016

BEIJING (Reuters) - China’s 2016 oil demand grew at the slowest pace in at least three years, Reuters’ calculations based on official data showed, the latest indication that demand from the world’s largest energy consumer has diminished.

China’s implied oil demand growth eased to 2.5 percent in 2016, down from 3.1 percent in 2015 and 3.8 percent in 2014, Reuters’ data showed, led by a sharp drop in diesel consumption and as gasoline usage eased from double-digit growth.

The slowing occurred as the economy expanded by only 6.7 percent in 2016, the slowest pace in 26 years.

“Inventory-adjusted diesel posted the first annual drop in 2016,” Harry Liu, associate director of oil markets with IHS Energy said. “Diesel consumption has been hit by an extended period of flood in the second quarter and less demand from the logistic sector as efficiency continue to improve”

Gasoline consumption was 3.6 percent higher than 2015. That compared with growth of 9.1 percent in 2015 and a 13 percent gain in 2014, Reuters data showed.

Liquefied petroleum gas usage expanded 24 percent, while kerosene demand gained 9 percent from a year ago. Crude oil demand growth also eased despite a record pace of imports in 2016.

The demand will pick up again this year as the economy bottoms out and the reviving mining industry fueled consumption for trucks and diggers, Liu said.

The implied oil demand is a sum of net imports of refined fuel and domestic crude throughput.

Reporting by Meng Meng