China’s January crude oil imports averaged 11.12 million bpd, according to energy analytics company OilX. This was up by more than 18 percent, or 1.74 million bpd, from the December average
Refinery intakes also remain strong, OilX analysts noted, averaging more than 14 million bpd for eight consecutive months now.
China has been the single most bullish factor for oil prices since the pandemic hit. Thanks to the fast recovery of its economy, China has been instrumental in the oil price rebound as the world’s biggest oil importer.
Independent refiners have remained important for overall imports as they accounted for the new refining capacity additions in the country, which were expected to boost its imports. After a slowdown towards the end of 2020 as they used up their import quotas, teapots are once again buying more under their new quotas for this year, boosting China’s total crude imports.
In more bullish news for oil, oil in storage is being drawn down, according to both OilX and another analytics firm, Kayrros.
OilX said in its January imports report that designated storage for the Shanghai INE oil futures was down by 6 million since the end of 2020, and more than 22 million barrels lower than the August 2020 level.
Kayrros calculated that China’s oil in storage stood at some 990 million barrels at the start of February this year, which compared with 856 million barrels this time last year but was down from some 1 billion barrels in September 2020.
China was the world’s largest oil buyer last year as it sought to fill up its reserves with cheap oil amid the pandemic. Refining throughput also hit a record in China last year as major new facilities entered into service. That China is still buying a lot of oil this year, despite higher prices, and that its inventories are falling, is good news for oil producers around the world.