China uses crude stockpiles, but rising oil imports may curtail draws: Russell
USO•China drew an estimated 530,000 barrels per day from crude stockpiles in September as refinery processing outpaced imports and domestic production. Imports may rise above 10 million barrels per day in October, 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 to 9.03 million barrels per day from 8.93 million.
2. Imports may recover
Crude imports may exceed 10 million barrels per day in October, the highest level since March, as increased availability and moderating prices support arrivals. Kpler estimated seaborne imports at 9.02 million barrels per day for October; China also receives about 1 million barrels per day through pipelines from Russia and Central Asia.
3. Stockpile context
Despite recent draws, imports and domestic production exceeded refinery processing by 240,000 barrels per day over the first nine months of the year. Analysts estimate China’s crude stockpile contains at least 1.2 billion barrels. Onshore inventories rose to 1.192 billion barrels in the week to October 19, according to EA Crude Oil Inventories.
