Shipments from overseas to the world’s 2nd-biggest Crude Oil consumer increased to 30.29-M/tonnes in April, according to preliminary data released by the Beijing-based General Administration of Customs Friday. That’s equivalent to 7.4-M/BPD, rising almost 17% from March and up 3.1% from the prior high in December.
Crude Oil has rebounded about 40% since January on signs a slowdown in the US shale Oil boom will deplete a glut that pushed prices to the lowest in nearly 6 yrs. Rising purchases by China, which is forecast to account for 11% of global Crude Oil use this year, will add to speculation that the oversupply will shrink.
Saudi Arabia’s deputy Oil minister has said the market is in “excellent” condition.
Benchmark Brent Crude Oil prices fell almost 50% last year as Saudi Arabia and other members of the Organization of Petroleum Exporting Countries (OPEC) chose to protect market share over cutting output to boost prices amid the highest US output in more than 10 yrs.
As Crude Oil price collapsed, China stepped up purchases to fill its emergency supplies and is expected to make available more capacity to store emergency stockpiles later this year.
Demand for Crude Oil supplies from the Middle East and West Africa was lifted by Chinese purchases in April. It could be because China is buying for strategic reserves. But when China stops, it is not good for these producers.
China National United Oil Co., the trading unit of China’s biggest energy company known as Chinaoil (HK:8132), bought a record 24-M bbl for June loading on a Singapore pricing platform, according to a survey of traders. The number of super tankers sailing to Chinese ports meanwhile climbed 20% last week to the highest since December, ship-tracking data show.
The Asian nation’s overseas purchases were forecast to slow as companies that account for 12% of its processing capacity are scheduled to shut units during the second quarter, according to ICIS China, a Shanghai-based commodity researcher.
Refiners probably accelerated their purchases on signs global Crude Oil prices have bottomed out, said Guo Chaohui, an analyst at China International Capital Corp. “Also, refinery maintenance may have not impacted Crude Oil throughput to the extent we expected,” Guo said by phone from Beijing.
Crude Oil imports may decline to about 23 – 24-M/tonnes a month from April to June, ICIS China predicted on 30 March.
