China uses crude stockpiles, but rising oil imports may curtail draws
USO•China drew an estimated 530,000 barrels per day from crude stockpiles in September, as refinery processing exceeded imports and domestic production. October imports may rise above 10 million barrels per day, potentially covering refinery needs.
1. September stockpile draw
China’s refineries processed 13.99 million barrels per day in September, compared with 13.46 million barrels per day available from crude imports and domestic production. The resulting estimated draw of 530,000 barrels per day was smaller than August’s 640,000 barrels per day, as imports rose from 8.93 million to 9.03 million barrels per day.
2. Imports may rebound
Crude imports may exceed 10 million barrels per day in October, the highest level since March, as increased availability and moderating prices support arrivals. Seaborne imports are estimated at 9.02 million barrels per day, a figure that may be revised higher, while pipeline imports from Russia and Central Asia add about 1 million barrels per day. The higher imports may cover refinery processing even if rates return to around 14.5 million barrels per day.
3. Inventories remain elevated
China’s crude imports and domestic production averaged 13.97 million barrels per day in the first nine months of the year, exceeding refinery processing of 13.73 million barrels per day. Onshore inventories reached 1.192 billion barrels in the week to October 19, up from 1.189 billion the prior week, and were 13 million barrels below the year-earlier level.
