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China’s May oil imports set new record

PERFORMANCE CHINA’S oil imports soared to a new record June 8. “Demand for products is recovering,
of 47.97mn tonnes (11.34mn barrels per day) but there is still plenty of crude and product in
in May, General Administration of Customs tanks.”
(GAC) data showed on June 7. The volume out- This cautious view was echoed by ING in
strips the previous record of 11.18mn bpd set in its June 8 statement, which said: “[T]his record
November 2019. number does not mean that Chinese consump-
The spike in crude purchases is being hailed tion has fully recovered from [coronavirus]
by some as a sign that Chinese demand has com- COVID-19. Instead, this is most likely just
pletely recovered. The daily import average for opportunistic buying, given the low price envi-
the first five months of the year now stands at ronment the market has been in for the last few
10.54mn bpd, compared with 2019’s full-year months.”
average of 10.17mn bpd. Meidan said rising consumption of auto-
The surge could continue this month, motive fuels had encouraged refiners to ramp
with analysts suggesting that Chinese buy- up their run rates, with independent refiners
ers are looking to capitalise on cheap oil. in Shandong Province seeking to use up their
Commodity research firm Kpler told the import licences before they expire. Independ-
newswire that the country’s imports could ent refiners had lifted run rates to about 76% of
soar to 14mn bpd in June, with analyst Sean faceplate capacity at the end of May, compared
Tan saying that about 190 supertankers were with a February low of 42%, data from industry
expected to arrive. consultant SCI99 show.
However, there are some who take a more Wood Mackenzie has projected that China’s
cautious position on the import surge. oil demand will recover to 13mn bpd in the sec-
“Much of it is likely opportunistic buying to ond quarter, up 16.3% quarter on quarter but
capitalise on low crude costs,” the head of China down 2.5% year on year. Demand for gasoline
research at the Oxford Institute for Energy Stud- and diesel is expected to increase on a yearly
ies (OIES), Michal Meidan, told Bloomberg on basis from the third quarter onwards.™

China reportedly starts

consolidating its LNG terminals

POLICY THE Chinese government has reportedly the control of PipeChina, which was launched in
ordered the country’s three largest state-owned December 2019.
oil and gas companies to hand over control of The transfer will not see the Big Three
10 liquefied natural gas (LNG) terminals to lose equity in the assets just yet, but will see
newly created China Oil & Gas Piping Network PipeChina assume control of seven CNOOC
(PipeChina). terminals, two belonging to CNPC and one
The move is the next step in the govern- from Sinopec, Caixin quoted unnamed
ment’s plan to bring all of the country’s oil and industry sources as saying.
gas import and transportation infrastructure – The three companies will continue to
currently dominated by China National Petro- run 11 terminals, two of which are still
leum Corp. (CNPC), Sinopec Group and China being built, once the handover has been
National Offshore Oil Corp. (CNOOC) – under completed.

P8 www. NEWSBASE .com Week 23 11•June•2020