The crude oils stockpiles of China fell for the first time in 12 months on the back of a drop in imports to the lowest in a year and robust processing rates at local refineries, S&P Platts reports, citing its latest calculations that are based on what official data is available from Beijing.
The stockpiles fell by 27.41 million barrels in October from September, S&P Platts said, with refineries processing 11.94 million barrels of crude daily, up 7.4 percent on the year. Imports during the reported month, on the other hand, averaged just 7.34 million bpd. As a result, inventories at the end of October stood at 11.06 million bpd. This, S&P Platts noted, was a 4.5-percent increase on the year, however.
Earlier this week, data analysis provider Orbital Insight said that China has started to build its crude oil inventories after two months of declines,. According to the company’s data, the first nine days of November saw an inventory increase of 37 million barrels, after a 120-million-barrel draw in September and October.
The company uses a combination of satellite imagery and machine learning to calculate the levels of oil inventories by measuring the shadows cast by the floating roofs of the storage tanks. As the level of oil in the tanks changes, the roofs either sink or rise, which is reflected in the length of the shadows they cast. Related: New Battery Design Could Crush Tesla
China does not release official data on its crude oil inventories, which is a great source of anxiety for traders, what with the country being currently the top importer of the commodity. It began building a strategic oil reserve about ten years ago, and last year Orbital Insight estimated that the amount stored in the reserve could be as high as 600 million barrels – and that was in May 2016.
Earlier this year there was worry that the capacity of China’s oil reserve is almost full and that if it sharply cut its imports, the oil market will descend into chaos. This hasn’t happened yet, but there is a sense of general uneasiness when it comes to China’s capacity to manipulate the oil market.
By Irina Slav for Oilprice.com
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