UPDATE: OIL DATA: China Crude Oil Imports Hit Yr-Low In Nov

BEIJING --China's monthly crude oil imports in November hit their lowest level this year, providing more evidence that a weakening domestic economy is translating into sharply reduced oil demand.

Preliminary data from the General Administration of Customs on Wednesday showed China imported 13.36 million metric tons of crude in November, equivalent to 3.26 million barrels per day.

Volumes were down a hefty 17.3% from the 16.16 million tons of crude oil imported by China in October, despite a fall in crude oil prices over the month, and they were 1.8% lower than the 13.61 million tons of crude shipped in at the same stage of 2007.

The data showed that China's crude oil exports totaled 210,000 tons in November.

China's refiners are scaling back operations despite the lure of abnormal margins created by a sharp fall in crude prices since July and no corresponding adjustment in state-set caps on domestic oil product prices.

Prices of light, sweet crude on the New York Mercantile Exchange are currently more than $100 a barrel below their July peak. In November, Nymex crude fell from around $65 a barrel to finish below $50 a barrel.

Analysts say China could be taking advantage of the slide in oil prices to fill more of its strategic petroleum reserve, which would prop up crude imports, but that volumes being used for this were unlikely to offset the decline in domestic demand.

By the end of October, China National Petroleum Corp. and China Petrochemical Corp., the country's top two refiners, had built up stocks of 33.1 million barrels of gasoline and 46.8 million barrels of diesel due to slackening domestic oil demand, according to Xinhua news agency.

China's economy is dependent on exports, which fell 2.2% on-year in November, according to the preliminary data, the first fall since 2001. This has hit demand for oil, particularly in regions dependent on manufacturing goods for export to the U.S. and Europe.

October's 8.2% expansion in industrial output from a year earlier was the slowest since late 2001, according to Citigroup. Analysts said November's industrial output growth likely slowed to around 6%-7% from a year earlier.

China has sought to boost economic growth via a CNY4 trillion ($590 billion) stimulus package through 2010 and by loosening monetary policy, but analysts say while this could result in stronger oil demand growth, this won't be felt until possibly around the second half of next year.

Paul Ting, principal of Paul Ting Energy Vision, said in a report earlier this month China's oil demand was likely to remain anemic in the short term.

In December, major refineries owned by China Petroleum & Chemical Corp., known as Sinopec Corp., were set to cut runs by 6% from November to 12.7 million tons, or 3.0 million barrels a day, according to information provided by Shanghai-based CBIChina.

PetroChina Co. (PTR), the listed unit of CNPC, also planned to cut runs, but not as sharply as Sinopec, said an executive with the company.

China, the world's second-biggest crude oil consumer, has also been scaling back purchases of refined oil products from overseas due to the stock overhang and weaker demand.

For the second consecutive month, China's oil product imports hit their lowest level in more than two years.

Wednesday's data showed that China's combined oil product imports amounted to 1.93 million tons in November.

Nevertheless, the country remained a net importer of oil products as China exported only 1.27 million tons of oil products in November.

-By David Winning, Dow Jones Newswires; 9610-65885848; david.winning@dowjones.com