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China’s imports continue to rise
Crude shipments to Chinese buyers continued to rise steadily in March, further supporting the case that the country is stockpiling
COMMENTARY
WHAT:
China’s oil imports climbed 4.5% in March to 9.72mn barrels per day.
WHY:
Independent refineries and the SPR are thought to have raised purchases.
WHAT NEXT:
Stockpiling will continue until prices rise or storage capacity runs out.
CHINA’S oil imports continued to increase in the opening months of the year, despite falling domestic demand and rising output from local fields. The numbers confirm analyst predic- tions that Beijing is filling its strategic petroleum reserves (SPRs) with cheap crude.
Oil imports expanded by 4.5% year on year in March to 41.1mn tonnes (9.72mn barrels per day), according to General Administration of Customs (GAC) data. Imports in the first quarter climbed by 5% on the year to 127.19mn tonnes (10.36mn bpd).
Reuters quoted Longzhong Information sen- ior analyst Li Yan as saying: “Teapots started to book crude oil from late February, when domes- tic virus transmission was easing. Some of the vessels have arrived in March and more will come in April.”
Li expects imports to increase in late April and May as refineries ramp up purchases follow- ing the price collapse.
China’s expanding imports come despite domestic oil production climbing to 32mn tonnes (3.98mn bpd) in the first two months of this year.
Production continues
China’s crude output in January and February was the highest monthly average since June 2016, which was the last month when produc- tion averaged more than 4mn bpd.
State-run developers have raised their upstream spending in response to Chinese President Xi Jinping’s call in July 2018 to boost exploration and production efforts in the name of improved self-sufficiency. This came a year and half after the NDRC published a five-year crude production plan for 2016-2020 calling for around 200mn tonnes (4mn bpd) of output in 2020.
Data and analytics company GlobalData said this week that China could buck the trend of coronavirus (COVID-19) related delays in the Asian upstream.
GlobalData said the country’s national oil companies (NOCs) were set to focus on their domestic output growth goals now that the economy had entered the recov- ery phase. It noted that China’s planned projects would progress, with only minor delays expected.
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w w w . N E W S B A S E . c o m Week 15 16•April•2020