OIL PRICES rose to a fresh record yesterday after data showed China’s voracious appetite for diesel ahead of the Olympics was growing. Diesel and heating oil prices also hit new highs.

Nymex’s July West Texas Intermediate jumped almost $2 to $135.09 a barrel after the Chinese government said it imported 6 per cent more diesel last month than the month before.

Imports for other oil products, particularly jet fuel, were also strong.

The price of crude fell back later in the session to $131.92 a barrel, almost a dollar lower on the day. ICE July Brent also pushed into uncharted territory, up as much as $2.44 in early trade to $135.14 a barrel.

So far this year, Chinese demand for diesel has increased by 13 per cent compared to the same period in 2007, draining supplies from elsewhere.

Analysts believe the country is stockpiling fuel ahead of the Olympics.

The arrival of winter in the southern hemisphere could exacerbate the diesel shortage as countries such as South Africa and Chile, which are facing power shortages, are expected to increase their purchases.

In London, gas oil reached a record of $1,304 a tonne, while in New York heating oil pushed through $4 a gallon.

China’s figures rattled the wider oil market, still reeling from the surprise fall in US crude stocks. Both pieces of news exacerbated fears that future supply will be unable to cope with demand from industrialising countries.

That bleak assessment has pushed the price of long-dated oil futures to record highs this week, and yesterday the price of oil scheduled for delivery in December 2016 reached $145.60.

Robin Batchelor, who manages BlackRock’s BGF World Energy fund, said China consumes as much oil per person as America did in 1905. – (Financial Times service)