China's June oil demand down 0.5%

China's oil demand is expected to slow as the country grapples with an economic slowdown and a campaign to reduce overcapacity across a range of sectors.

China's implied oil demand fell 0.5 per cent in June from a year ago in its second month of decline, as net oil product exports more than doubled from the previous month.

China consumed roughly 10.50 million barrels per day of oil in June, accelerating from 10.24 million barrels the previous month, but slightly down from a year ago, Reuters calculations based on preliminary government data showed on Friday.

The drop was mainly due to a surge in fuel exports as a supply glut hits domestic refiners.

Net exports of fuel were 466,667 bpd in June, reversing net imports of 9,333 bpd in the same period last year, and net exports of 182,903 bpd the previous month.

A year ago, China was a net importer of oil products.

Data from the National Statistics Bureau also showed crude runs rose 3.2 per cent to 45.08 million tonnes, or 10.97 million bpd, a record high.

In the first six months, throughput gained 2.8 per cent to 267.35 million tonnes, or 10.92 million bpd.

Implied oil demand is the sum of net imports of refined fuel and domestic crude throughput. Reuters will publish a breakdown of demand calculations later this month based on products and adjusted for changes in fuel inventory.

China's oil demand is expected to slow as the country grapples with an economic slowdown and a campaign to reduce overcapacity across a range of sectors.

The economy grew 6.7 per cent in the second quarter from a year earlier, steady from the first quarter and slightly better than expected, the statistics bureau said.

Image: Passersby walk past in front of electronic boards showing Japan's Nikkei share average (L), the Japanese yen's exchange rate against the US dollar (C), British pound (R) and Euro (2nd R) outside a brokerage in Tokyo, Japan, July 6, 2016. Photograph: Issei Kato/Reuters