China's oil imports reach record high during March 2017

Independent refineries reported higher imports to meet quotas

The Dollar Business Bureau

China showed a record level of oil imports in the month of March 2017. Up by 19.4% year-on-year and 10.7% from the month of February, China's oil imports in March stood at 9.21 million b/d (38.95 million mt). The rise in demand for crude oil is attributed to the fear of rising global oil prices, which have prompted oil importers to up the storage of the precious commodity.

The independent refineries of China are said to have imported extra loads of crude oil during the month gone by in order to finish the quotas allotted to them. The size of their second allocation, due towards the end of May, is contingent on their fulfillment of the first quota.

The independent refineries located in China's provinces of Shandong, Hebei and Ningxia imported record quantities of oil in March. The capacity utilisation of independent refinery also rose to record high levels of 64.6%, surpassing the previous high of 63.3% in December 2016. China's last high recorded in crude oil imports was also in December 2016, at 8.6 million b/d.

Leaving behind USA, China became one of the largest importers of oil in the January-March 2017 period. Chinese imports during the three month period stood at 8.53 million b/d, exceeding USA's 8.17 million b/d.

Even though oil imports were the highest in March, the average quantity of oil processed in the month (11.23 million b/d) was lower than that of the first quarter put together (11.26 million b/d). This led experts to conclude that the additional amount of crude imported was stored away keeping in mind the foreseeable price hike in future. As OPEC strategises to normalise oil prices by cutting oil production, heavy importers of oil like USA, China and India are finding ways to combat the impending burden on their economy.

China recorded an all-time high in export of crude oil during the same month, estimated at 1.24 million mt, which is 66.2% higher than the last record export quantity observed in March 2015. Nevertheless, the net import of oil during March (37.71 million mt) was higher than the December's (2016) record of 36.04 million mt. 

The Dollar Business Bureau - Apr 19, 2017 12:00 IST