China stockpiled crude oil at elevated rates in October, at a daily rate of some 690,000 barrels, up from 570,000 barrels daily in September, Reuters’ Clyde Russell reported today, citing calculations derived from official Beijing data.
Refinery throughput in October averaged 14.94 million barrels daily, the official data showed, while imports ran at a rate of 11.39 million barrels daily, Russell reported. The refinery throughput figure was a 6.4% increase on the year, suggesting healthy demand for oil, but it was also a decline on September’s 15.26 million bpd average. The September figure was a two-year high.
Imports, meanwhile, averaged 11.39 million barrels daily in October, adding to local production of 4.24 million barrels daily for a total daily supply rate of 15.63 million barrels. The difference between supply and demand, as based on refinery runs, is assumed to be going into storage, although some of it might be processed by small refineries that are not included in the official data, Russell notes in his regular reports on the state of China’s oil market.
This stockpiling on the part of China has become a major reason for the relative stability of oil prices. It is based on the rather reasonable assumption that if China, the world’s largest oil importer, has built a supply cushion in case of disruption, then a surge in demand following such a disruption is unlikely. This assumption has acted as one more lid on prices, along with regular reports about electric vehicles replacing internal combustion engines in the world’s biggest car market.
Over the first ten months of the year, China was stockpiling crude at a daily rate of 900,000 barrels, the Reuters report also said, giving a rather comfortable size to that supply cushion in case of disruption, such as the latest U.S. sanctions on Russia’s Rosneft and Lukoil.
By Irina Slav for Oilprice.com
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