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China keeps buying crude oil for storage, but difficulties loom: Russell

April 19/2019

MOSCOW (MRC) - China appears to have kept the flow of crude into strategic and commercial storage facilities at high levels in the first quarter, even as the price of oil climbed, said Reuters.

While China doesnt release detailed statistics of its strategic petroleum reserve (SPR) and commercial stockpiles a rough idea can be gleaned by looking at refinery throughput numbers and the volume of domestic and imported crude.

Refineries processed 12.6 million barrels per day (bpd) of crude in the first quarter, according to official data released on Wednesday, up 4.4 percent from the three months to end-December, and also up by the same margin from the year earlier quarter.

Crude imports in the January-March period were 9.83 million bpd, while domestic output was 3.84 million bpd, giving a total of 13.67 million bpd.

Subtracting the refinery throughput from the total crude available leaves a gap of 1.07 million bpd, and its this oil that has likely found its way into either SPR or commercial storage tanks.

The same calculation for the December quarter showed a gap of 950,000 bpd, implying that China has upped the amount of crude being stored by around 57,000 bpd in the first quarter of 2019 from the last quarter of 2018.

The increase of storage flows came as crude prices started to climb, with global benchmark Brent gaining 33 percent from the end of last year to a close of $71.62 a barrel on Wednesday.

Its worth noting that cargoes that arrived in China in January and February would have been fixed at a time when crude prices were still dropping, with Brent sliding 45 percent between its 2018 peak close of $86.29 a barrel in early October and the years low of USD50.47 on Dec. 24.
Author:Anna Larionova
Tags:petroleum products, petrochemistry, Crude oil, China.
Category:General News
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