The latest Platts' survey on Chinese demand, put together by our Hong Kong bureau chief Winnie Lee, is the most bullish change in the supply/demand balance that has appeared in several months.
With things such as the dollar and the (now-stalled) rise in the equities market given much of the credit for the increase in the price of oil in recent months, there wasn't a tremendous amount of data to support the idea that the market had undergone a fundamental change that would call for rising prices. But the reports out of China would constitute that sort of news.
Winnie reported that China consumed 33.23 million metric tons of oil in May, up a strong 6% from the same month in 2008. That's the second month in a row that the country showed a year-on-year increase. It should be noted that it was at about this time last year that the Chinese were laying in tremendously high stocks of diesel to get ready for the Olympics, making the gain even more notable.
The April year-on-year increase was the first in six months.
Platts calculates China's apparent or implied oil demand on the basis of crude throughput volumes at the domestic refineries and net oil product imports, as reported by the China's General Administration of Customs and the National Bureau of Statistics.
You can see the Platts' release on the data here. One other thing to note: Chinese crude output fell more than 1%.
It's only a matter of time. Consider the launch of china regional jet service, and recent political uprisings in OPEC nations.