China’s apparent* oil demand in November 2016 hit the second highest level on record to 11.44 million barrels per day (b/d), according to an analysis of Chinese government data by S&P Global Platts, the leading independent provider of information and benchmark prices for the commodities and energy markets. This was 4.1% higher than the same month in 2015.

Refinery throughput in November 2016 averaged 11.18 million b/d, data from China’s National Bureau of Statistics (NBS) showed December 12. This was up 3.9% year over year and 0.8% higher than in October, likely due to an uptick in runs toward the end of the year, as well as fewer refineries shut for maintenance.

China’s imports of key oil products rose to a six-month high of 1.1 million b/d, driven by higher light distillate inflows, data from the General Administration of Customs showed. Exports were stable month on month at 851,000 b/d, bringing net imports during November to around 250,000 b/d. This was in contrast to October, when China turned a marginal net exporter of oil products.

Overall apparent oil demand over January to November averaged 11.07 million b/d, a 0.9% contraction year on year, although the pace of decline slowed from January to October, which recorded a 1.4% contraction.

Calculations of apparent oil demand using official data sources however, may not be fully accurate given that some refinery output is not captured by the NBS. Platts China Oil Analytics, an S&P Global Platts on-line platform for supply/demand and trade data, estimates that China’s refinery runs in November were 11.54 million b/d, which means apparent demand for the month likely averaged 11.83 million b/d, representing a 7.8% increase year on year.

Adjusting for higher production in gasoline and gasoil than was reported by the government, Platts China Oil Analytics estimates that gasoline apparent demand in November averaged 2.9 million b/d, a 1% increase year on year, while gasoil apparent demand rose 6.2% over the same period to 3.72 million b/d. Fuel oil apparent demand rebounded month on month to 687,000 b/d, rising 7.2% from October on improved bunker demand although buying from independent refiners remained weak.

Moving into early 2017, refiners are expected to ramp up throughput operations to prepare for the Lunar New Year holidays.

“Gasoline and jet fuel demand for the transport sector are likely to rise significantly prior to the start of the holidays as people across the country travel home to celebrate the new year, which falls on January 28,” said Song Yen Ling, senior analyst with Platts China Oil Analytics. “Following that, gasoil demand is expected to pick up with the restart of industrial activity as well as the spring farming season in south China.”

Despite the pick-up in demand, refiners may maintain the level of oil product exports seen at the end of 2016 because of an expected uptick in refinery runs. Gasoline exports likely averaged 265,000 b/d in the fourth quarter of 2016 while gasoil outflows likely averaged 360,000 b/d.

Platts China Oil Analytics expects gasoline outflows to average around 275,000 b/d in the first quarter of 2017 as domestic inventories are at relatively high levels currently, although gasoil exports may ease to 300,000 b/d as refiners have reported holding lower-than-normal stocks and may reserve supplies for the domestic market.