Private Chinese firm Hengli Petrochemical, which operates one of the largest private refineries in China, has boosted its crude oil storage capacity by 22.6 million barrels to a total of 37.8 million barrels, Argus Media quoted the refiner as saying on Thursday.
The new storage tanks at Dalian will help Hengli Petrochemical to optimize purchases for its 400,000-bpd refinery in Changxing.
Over the past few months, Hengli Petrochemical and other Chinese refiners, both private and state-owned, have increased purchases of crude oil, taking advantage of some of the lowest crude prices in years in April.
China has decided that it would increase its crude oil storage capacity, as part of its goal to optimize its energy and crude import needs.
Over the past few months, while the rest of the world continues to struggle with fuel demand recovery in fits and starts, China has been a critical factor in supporting oil prices, breaking crude oil import records. Record Chinese crude oil imports over the past few months have supported still weak global oil demand.
Chinese refiners, both state-held giants and independent refiners in the Shandong province, rushed to stock up on ultra-cheap crude oil, locking in crude for delivery in May, June, and July—and breaking crude oil import records.
For the first half of 2020, despite the lockdown in the pandemic, China’s crude oil imports jumped by 10 percent year over year to an average of 10.95 million bpd.
In July, China imported 12.08 million bpd of crude oil, according to official customs data, which was lower than the record-breaking import rate in June but 25 percent higher than the average for July 2019.
After August, the Chinese buying spree may be coming to an end, as oil is not as dirt cheap as it was in April, and China is estimated to have amassed extensive crude inventories in commercial and strategic storage.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.