China Oil Demand Slows but Remains Fourth Highest in February

China's February oil demand has risen at its slowest pace since September, but remained at the fourth highest rate ever as the Lunar New Year holidays weakened consumption.

According to Reuters' calculation of the government data, China's implied oil demand stood at around 10.14 million barrels per day during the month, a 4.9 percent increase over the same month in the previous year.

The apparent or implied demand includes both domestic crude processing and net imports. The lower consumption in February can also be attributed to the 34 percent drop in net fuel imports, as firms exported excess fuel as supply exceeded demand.

China's rapidly increasing energy demand has served as the key driving force in global markets in the recent times. In 2012, demand was hit after Chinese economy posted its worst performance in 13 years, but things started to pick up towards the year-end as government took steps to boost growth.

"Chinese refiners likely continued to export gasoline and diesel as the fuel market remained well supplied during the holiday season," Cheng Sijing, commodities analyst with Barclays was quoted by Reuters.

Demand had rose to 8.6 percent year-on-year in January to 10.43 million barrels per day according to Reuters, as oil companies restocked ahead of the festival holiday season. This was the highest after December's 10.9 billion and November's 10.5 billion barrels per day demand rate.

According to a Financial Times report published early this month, China's net oil imports had overtaken those of the United States in December. The US had been the world's largest net oil buyer since the 1970s.

China's economy is widely expected to grow at about 8 percent in the current year despite the government maintaining a 7.5 percent growth target. But recent economic indicators, including manufacturing, industrial output and retail sales had indicated slowing conditions.