China's demand for oil is falling sharply and inventories are surging as the global economic downturn is gradually being felt, said China National Petroleum Corp (CNPC).

Production at the nation's top oil producer has been affected "adversely" as the international financial crisis has continued to take its toll on the country, according to a statement on the company's website.

"The impact has become even more clear since September," the statement said, citing CNPC president Jiang Jiemin, who was speaking at a recent company video conference.

"It manifests itself in tougher sales due to sharply contracting consumption, difficult production planning because of surging inventories, and slumping prices of oil and petrochemical products," he said.

Economic growth in China slowed to nine percent in the third quarter, the lowest level in more than five years.

Industries such as the home appliance and steel sectors are seeing decreasing orders, with many steel makers suspending or cutting production, in turn leading to weakening demand for oil and gas, earlier Chinese reports said.

Sinopec, the country's number one refiner, said in its third quarter report that sales of oil products between July and September went down by 3.2 percent from the second quarter to 31.8 million tonnes.