China’s crude oil imports saw a significant rise in November, with most of the increase likely directed toward stockpiling, according to data analyzed by Reuters columnist Clyde Russell.
For the first time in seven months, China’s crude oil imports surged last month, driven by lower prices that spurred greater demand. Customs data revealed that the average daily import rate in November reached 11.81 million barrels. The total volume for the month was 48.52 million tons, marking a 14.3% increase compared to the same period last year.
Chinese refiners likely capitalized on price reductions from major suppliers Saudi Arabia and Iraq. These cuts came at a time when Iranian oil shipments were lower, allowing China to fill the gap. Despite this, China’s year-to-date oil imports remain below 2023 levels, and it is expected that the full 2024 import total will be lower as well. This decline is likely to fuel pessimism among traders about China’s future demand, even as the country pushes ahead with economic stimulus measures.
In November, China’s crude oil imports added to a growing surplus, as refining activity did not match the pace of the increased imports. The country’s excess crude supply averaged about 1.77 million barrels per day (bpd), based on Russell’s calculations from official data.
Since China does not report its crude oil inventories, analysts have to estimate the surplus by comparing imports and domestic production with the amount of crude processed at refineries. November’s surplus was the second-largest of the year, following August’s surplus of 1.85 million bpd.
While not all of the surplus crude is likely stored, the excess supply for the year has averaged around 360,000 bpd more than the surplus in 2023.
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