China’s crude Oil imports had been once more robust in June: in response to customs authorities, 49.9 million tons had been imported, 7% greater than within the earlier month, Commerzbank’s commodity analyst Barbara Lambrecht notes.
Construct-up of shares in China could decelerate at any time
“This corresponds to every day crude Oil imports of slightly below 12.2 million barrels. The (every day) imports had been thus barely greater than in March and the best since summer time 2023. The excessive imports are in step with the robust crude Oil processing reported this morning in China, which climbed to fifteen.2 million barrels per day, the best degree since September. Margins are at present excessive, particularly within the diesel market, making excessive processing (and exports) enticing at current.”
“However, given the slightly weak home demand (partly structural, partly cyclical), which was confirmed by Q2 GDP information this morning (see right here), a sure overshoot in crude Oil imports may be noticed. In its newest month-to-month report, the IEA refers to estimates that crude Oil shares in China rose by 82 million barrels within the second quarter, or simply underneath 900,000 barrels per day. This is likely one of the largest will increase in inventories ever recorded in a single quarter.”
“China needs to enhance its power safety and, since January 1, 2025, has additionally required firms to keep up strategic reserves. The background to that is that statestorage amenities are already 80% full, whereas business storage amenities are solely 50% full. Nevertheless, the sharp enhance additionally poses a threat: the build-up of shares in China, which is a crucial assist for the Oil market, may decelerate at any time.”
