Australian oil demand growth remained robust in March at 48 thousand b/d y/y, on par with February's growth of 49 thousand b/d. The real test, however, will come in May when base effects will become more prominent as demand started rising strongly from May 2017. In line with recent trends, diesel continued to lead demand growth, at 51 thousand b/d y/y, in line with a manufacturing PMI that raced to a record high of 63.1. Gasoline demand fell by 8 thousand b/d y/y despite another month of strong vehicle sales (+1.5% y/y), led by SUVs, as extreme heat (ninth-hottest March on record) may have kept people indoors. Jet grew for the 31st straight month, by 2 thousand b/d y/y, while LPG fell by 3 thousand b/d y/y. Fuel oil demand was flat y/y.
Refinery runs rose by 0.14 mb/d y/y to 0.53 mb/d while crude imports were higher y/y by 19 thousand b/d. Total liquids production grew for the third straight month by 23 thousand b/d y/y led by condensate (+25 thousand b/d y/y), production of which was boosted by the ramp up of Wheatstone and should be boosted further by Prelude in Q2 18, though Ichthys is now likely to slip to Q3 18. Product imports were lower y/y by a massive 0.18 mb/d as gasoline (-95 thousand b/d y/y), jet (-36 thousand b/d y/y) and diesel (-58 thousand b/d y/y) all posted declines. As for gasoline, Australia imported from Europe for the second straight month in March, while jet and diesel imports from Saudi Arabia were recorded for the first time. LPG exports of 42 thousand b/d were higher y/y by 22 thousand b/d and should remain around this level until the start-up of Ichthys, which will raise LPG output by 1.65 Mtpy at full production. Crude inventories drew by 1.3 mb m/m while product stocks were mostly flat m/m, though diesel grew by 1.1 mb m/m.