Chinese oil demand should level off

Aug. 13, 2013 at 7:52 AM

HOUSTON, Aug. 13 (UPI) -- Chinese imports of crude oil should level off because of weaker domestic demand, a Chinese investment group said.

The Platts news service, the energy division of McGraw Hill, reported Tuesday oil imports plus domestic production outpaced refining output in July. It follows last week's assessment from the U.S. Energy Department, which said China is on pace to become "the world's largest net oil importer."

Platts reported Chinese crude oil stock build was the highest in more than a year, when approximately 1 million barrels of oil per day were accumulated.

The Energy Information Administration, the analytic arm of the U.S. Energy Department, said it expected China would take the lead in part because the U.S. economy was using more domestic crude oil.

Platts references a report from Chinese consultant group 3E, which said crude oil imports should decline to "more average levels" of nearly 5.6 million bpd in August because of lower demand.

The Organization of Petroleum Exporting Countries said in its August report there was "slowing momentum" in the Chinese economy. It said the economy should grow 7.7 percent next year but there was a risk of "a potential domestic financial crisis" in 2014.

In terms of oil production, OPEC said China should remain static.

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