Crude oil imports to China rose last month for the first time in seven months as lower prices stimulated stronger demand.
The average daily import rate in November stood at 11.81 million barrels, Reuters reported, citing customs data from China. The total for the month came in at 48.52 million tons of crude, which was 14.3% higher than a year ago.
The Reuters report noted that Chinese refiners likely took advantage of price cuts made by Saudi Arabia and Iraq—two major suppliers—and filled a gap left by Iranian oil due to lower loadings in November.
The year-to-date rate of oil imports, however, remains a decline on 2023 and chances are that the full-2024 figure will be lower than the 2023 total as well. This will probably add fuel to trader pessimism about future demand even as China doubles down on stimulus to accelerate its economic growth.
For the rest of the year, imports will likely remain higher. China has issued an extra crude oil import quota of some 116,800 barrels daily for this year and there is a directive to add 8 million tons of oil to the country’s emergency supply.
Meanwhile, refineries in China have not been doing so well. Run rates fell for seven months in a row until October, with the total annual decline from 2023 at 4.6%. As a result of the series of monthly declines, average refinery run rates for the first ten months of the year booked a 2% annual decline, for a daily average of 14.14 million barrels.
According to one local energy consultancy that spoke with Reuters last month, the decline was related to maintenance shutdowns and bankruptcies at three refineries owned by Sinochem. What’s more, independent refiners, the so-called teapots, operated at much lower than average rates in October, at some 58.7% versus 77% a year ago.
The latest stimulus, which focuses on looser monetary policy is aimed at stimulating industrial activity, which could benefit refiners in 2025.
Source: By Irina Slav from Oilprice.com