Earlier reports said one person had died in the blast while four more people were missing, Xinhua News Agency said. Later, authorities reported finding the bodies of the four, raising the death toll to five.
Five more people were injured in the incident, two of them critically. They were taken to a local hospital.
Xinhua said the explosion in Xiangtan city occurred in the yard of a residential building under construction. The explosion also caused a fire that was later put out.
The report said an initial investigation blamed illegal welding and installation of the oil tank for the explosion.