China's oil imports stayed at a brisk pace in May as diesel buying hit the highest since 1999 to combat a worsening power shortage, which was set to keep oil demand firm despite government measures to tame economic growth.
The General Administration of Customs said on Monday that diesel imports last month jumped 67 percent to over 300,000 tonnes versus April, while crude imports slipped four percent to 9.6 million tonnes.
Although slightly down from April, crude imports were up 59 percent from a year earlier and brought the country's total buying to 49.76 million tonnes, 55 percent of the record 91.2 million tonnes bought in 2003.
Analysts are waiting to see whether any of the government's measures this year to cool heady economic growth will impact China's surging demand for petroleum, which the International Energy Agency (IEA) reckons will jump by 14 percent this year to 6.28 million barrels a day (bpd).
"The demand picture was very, very uncertain. Without the cooling-down plans, demand this year should be very, very strong," said Yan Kefeng, Beijing-based oil analyst with U.S. consultancy Cambridge Energy Research Associates (CERA).
State oil distributors have indicated a slowing in diesel sales since May as Chinese banks curbed loans to sectors such as cement and metals, although industry sources said an acute power crunch would offset the impact from investment restrictions.
"I can't see any major downward impact on crude oil imports at least for the third quarter," said a Sinochem crude manager.
CERA's Yan said a survey of diesel generator dealers showed sharp increases in sales, especially in Zhejiang province in east China where factories and shopping malls used generating units to compensate for a shortfall of power from national grids.
Adding to power problems, the official Xinhua news agency said on Sunday that China's coal stockpiles fell to the lowest levels in 20 years at the end of April. Coal is the mainstay of Chinese power generation, firing three-quarters of the country's 384,500 megawatts of capacity.
"Coal inventories remained dangerously low at about only eight days," said Yan.