Higher Chinese crude oil imports and increased domestic production led to a jump in crude volumes directed to storage in the world’s top oil importer in March, according to calculations by Reuters columnist Clyde Russell based on official data.
Chinese crude imports, reported by the customs, were higher in March compared to the average of the previous two months of the year, while domestic oil production also rose.
So in March, China is estimated to have sent as much as 1.63 million barrels per day (bpd) of crude to either commercial or strategic storage. This rate of stockpiling compares with around 920,000 bpd of crude oil that has likely gone to storage during January and February this year, according to Russell’s estimates.
Last month, China imported China imported 11.69 million bpd of crude oil, up by 21 percent on the year, and higher than the average for January-February of 11.08 million bpd, as reported by the Chinese customs authorities.
Moreover, Chinese oil production in March rose both compared to the average of the previous two months and to the same month of 2020.
The throughput of Chinese refineries last month averaged 14.08 million bpd, up by 19.7 percent on the year, thanks to the recovery in demand for fuels and China’s stocking up on finished products before maintenance season begins.
Analysts, however, expect a slowdown in oil imports as refiners start seasonal maintenance. It’s also worth mentioning that March 2020 was a month of lockdowns in China, which severely affected the country’s oil consumption along with all other commodities.
In addition to the seasonal factor, higher oil prices will also likely discourage a rebound in oil buying by Chinese refiners and traders, according to one analyst from energy consultancy FGE.
There is also another factor that could see lower imports from “official” sources: China recently struck a massive investment deal with Iran and has been buying millions of barrels of Iranian crude on the quiet.
By Tsvetana Paraskova for Oilprice.com
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