November 09, 2020 [Oil Price.com] – China’s crude oil imports fell by 4.88 percent last month from a month earlier, data analytics provider OilX reported. At 10.96 million bpd, imports were more than 560,000 bpd lower than the average for September. On an annual basis, however, the October average was higher, by 3.47 percent or 367,000 bpd.
OilX’s analysts also reported that tanker congestion at Chinese ports has continued to ease. The level of oil in storage at facilities operated by the International Energy Exchange has also declined.
The tanker congestion in China followed a major buying spree earlier this year when crude oil was even cheaper. By the time the cargos reached China, it had become clear that demand will not rebound as strongly as hoped, causing delays in unloading and a shortage of storage capacity.
This situation is improving now, according to OilX, with oil in floating storage around China at 40 million barrels. INE storage has also declined—after falling for nine weeks in a row the amount of oil at these facilities is now more than 10 million barrels below the record highs registered in July, OilX said.
China’s crude oil imports have fallen in recent months from their record high of nearly 13 million barrels per day in June. However, imports continue to be considerably higher compared to last year’s monthly levels, according to data from the Joint Organisations Data Initiative (JODI).
Going forward, analysts expect that Chinese imports will not be as strong in the fourth quarter, as storage space remains quite full despite the decline in INE oil storage levels. At the same time, the demand for fuels in the regions China exports them to remains weak. In the final quarter of the year, Chinese crude oil imports could shed 14.5 percent from the third-quarter levels, equal to 1.7 million bpd, according to IHS Markit analysts.
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