China’s August oil demand strong but outlook muted

BEIJING (Reuters) – China’s apparent oil demand grew a strong 7 percent in August from a year earlier, as energy firms made a last month of massive imports to bolster stocks for the Olympics, even as domestic demand started to flag.

Oil traders and analysts said they were looking beyond the August data, because it masks weak consumption and brimming inventories that together give a far bleaker outlook for demand from the world’s number two oil consumer.

Fuel piped into storage tanks in China shows up as implied demand because the government does not report stock levels. This year’s record shipments, much of which are languishing in tanks, has fed straight through into the apparent consumption figures.

“There is a lot of inventory to consume,” said Victor Shum at Purvin & Gertz in Singapore.

Reuters