China's apparent oil demand in July increased to 38.29 million metric tones (mt), or an average of 9.05 million barrels per day (b/d), as oil consumption appeared to have recovered after seasonal refinery maintenance, according to an analysis of recent Chinese government statistics by Platts, a leading global provider of energy, petrochemicals and metals information.

In June, apparent oil demand by the world's second largest oil consumer slumped to just 9.01 million b/d, the lowest so far in 2011, as several refineries were shut for turnarounds.

In July, Chinese refineries processed 37.49 million mt of crude oil, or an average of 8.86 million b/d, up from June's processing rate of 8.69 million b/d and 6.2% more than the crude throughput a year ago.

"The July refinery throughput figure takes into account the slowed production at some plants due to turnarounds as well as an unexpected shutdown at PetroChina'sDalianrefinery in northeastLiaoningprovince due to a fire at the plant in mid-July," saidCalvin Lee, senior writer,China, Platts.

Local refineries boosted output as margins improved following a decline in the cost of crude feedstock and domestic retail prices for gasoline and diesel remained unchanged since the last price hike announced by the government in April, industry sources said.

Chinese refiners also ramped up production to restock depleting inventories of diesel in preparation for the August harvest season when consumption is expect to rise, the sources said.

July net oil product imports stood at 0.8 million mt, slightly higher than 0.54 million mt inJuly 2010, but less than June's net imports of 1.36 million mt.

"High international oil product prices forced Chinese companies to import less from overseas; at the same time, they have been halting exports to retain more barrels at home to ensure adequate supplies to the domestic markets," said Lee.

And with most of the scheduled maintenance completed by the end of July, analysts expect Chinese oil demand and crude imports to resume their uptrend in the second half of the year.

"A forecast released earlier this month byChina's Ministry of Industry and Information Technology (MIIT) implied that crude throughput will inch up for the remainder of the year, or at least maintain the pace seen in the first half of 2011. Other analysts have also reached the same consensus that the country's consumption will pick up again later in the year," said Lee.

The MIIT's forecast called forChina's crude throughput in 2011 to reach around 460 million mt or an average of 9.24 million b/d, up 8.5% from 2010. In the first seven months of this year, total crude throughput stood at 258.77 million mt, or an average of 8.95 million b/d.