China's surplus crude oil hits nearly 1 million bpd for September: Russell
The opinions expressed here are those of the author, a columnist for Reuters
By Clyde Russell
LAUNCESTON, Australia, Oct 21 (Reuters) -The weak position of China's crude oil sector was underlined by September data showing a sixth consecutive monthly drop in refinery processing, leading to nearly 1 million barrels per day of oil being available for storage.
China's refineries processed 14.29 million bpd of crude in September, up slightly from 13.91 million bpd in August, but down 5.4% from the same month in 2023, according to official data released on Friday.
The softness in refinery throughput followed earlier data showing crude imports fell 0.6% in September from a year earlier, slipping to 11.07 million bpd, the fifth straight month that imports were less than in 2023.
The frailty of China's oil sector meant that the ongoing pattern of this year of significant volumes of surplus crude were available to be added to either commercial or strategic storages.
China, the world's biggest crude importer, doesn't disclose the volumes of oil flowing into or out of strategic and commercial stockpiles, but an estimate can be made by deducting the amount of crude processed from the total of crude available from imports and domestic output.
Domestic production in September was 4.15 million bpd, up 1.1% from the same month last year, according to data from the National Bureau of Statistics.
Putting domestic output together with imports gives a combined total of 15.22 million bpd available for processing.
Refinery throughput was 14.29 million bpd, leaving a surplus of 930,000 bpd.
For the first nine months of the year the total volume of crude available was 15.25 million bpd, while refinery throughput was 14.15 million bpd, leaving a surplus of 1.1 million bpd.
It's worth noting that not all of this surplus crude has likely been added to storages, with some being processed in plants not captured by the official data.
But this will only be a relatively small volume, meaning that overall China has been importing crude at a far higher rate than it needs to meet its domestic requirements.
The question for the market is why Chinese refiners have continued to import more crude than they actually require?
PRICE MOVES
The answer is most likely to be found in price movements, with the recent pattern being that China imports more crude when refiners believe prices are low, while arrivals are trimmed when they view prices as too high, or as rising too quickly.
It's worth noting that in September last year Chinese refiners were actually drawing on inventories, processing 15.48 million bpd against available crude 15.24 million bpd, resulting in a deficit of 240,000 bpd.
At the time this happening, crude prices were surging, with Brent futures LCOc1 rising from $73.39 a barrel at the end of June to a high of $97.06 by the end of September last year.
However, this year has seen a different pattern in crude prices, with Brent trending weaker since its high so far in 2024 of $92.18 a barrel on April 12, to a low of $68.68 by Sept. 10.
The price has since recovered to around $73.16 a barrel in early Asian trade on Monday, but at this level it's probably likely that Chinese refiners deem prices reasonable.
It's also the case that China's refiners are looking to build a cushion of inventories just in case the tensions in the Middle East escalate to the point where there is an actual disruption of crude shipments, or a sustained threat that keeps a risk premium in the price.
However, there is little doubt that China's oil sector is weak, and would look considerably more so if refiners weren't buying crude surplus to their needs.
The data also makes even the lower forecasts for China's demand growth made by OPEC look wildly optimistic, with the producer group estimating demand will rise by 580,000 bpd this year, even though imports are down 350,000 bpd for the first nine months of the year.
The opinions expressed here are those of the author, a columnist for Reuters.
GRAPHIC-China crude available vs refinery runs: https://tmsnrt.rs/3YgYk8F
Editing by Stephen Coates
En son haberler
Bildirim: XM Group şirketlerinin her biri yalnızca gerçekleştirme hizmeti ve online yatırım platformumuza erişim sağlar. Herhangi bir kişinin web sitesinde bulunan veya web sitesi üzerinden sağlanan içeriği görüntülemesine ve/veya kullanmasına izin vermek, bu hizmeti değiştirmek veya genişletmek amaçlı değildir ve bu hizmeti ne değiştirir ne de genişletir. Bu tür erişim ve kullanım her zaman şunlara tabidir: (i) Şartlar ve Koşullar; (ii) Risk Uyarıları ve (iii) Tam Bildirim. Bu nedenle bu tür içerikler yalnızca genel bilgi amacıyla sağlanır. Özellikle, online yatırım platformumuzun içeriklerinin finans piyasalarında herhangi bir işleme girmek için bir teşvik veya bir teklif olmadığını lütfen dikkate alın. Herhangi bir finans piyasasında yatırım yapmak sermayeniz için önemli düzeyde risk taşır.
Online yatırım platformumuzda yayınlanan tüm materyaller yalnızca eğitim/bilgilendirme amaçlıdır ve finansal tavsiye, yatırım vergisi veya yatırım tavsiyesi ve önerileri ya da yatırım fiyatlarımızın kaydı veya herhangi bir finansal enstrümanda işlem yapılması için bir teklif veya teşvik ya da talep edilmemiş finansal promosyonları içermez ve içerdiği şeklinde bir değerlendirme yapılmamalıdır.
Görüşler, haberler, araştırma, analizler, fiyatlar, diğer bilgiler veya bu web sitesinde bulunan üçüncü taraf sitelere verilen bağlantılar gibi her türlü üçüncü taraf içeriğin yanı sıra XM tarafından hazırlanan içerik de “olduğu gibi” esasına göre, genel piyasa yorumu olarak sağlanır ve bir yatırım tavsiyesi oluşturmaz. Herhangi bir içeriğin yatırım araştırması olarak yorumlanmasıyla ilgili olarak, içeriğin bağımsız yatırım araştırmasını desteklemek üzere tasarlanmış yasal gerekliliklere uygun hazırlanmadığını ve bu amacın güdülmediğini, aynı şekilde ilgili yasalar ve mevzuatlar kapsamında pazarlama iletişimi olarak değerlendirileceğini dikkate almalı ve kabul etmelisiniz. Buradan erişebileceğiniz Bağımsız Olmayan Yatırım Araştırması Bildirimimizi ve yukarıdaki bilgilerle ilgili Risk Uyarımızı okuduğunuzdan ve anladığınızdan emin olun.
