China has reportedly imported record volume of crude oil last month due to the high demand from refiners, overtaking the US as the top buyer of oil.
According to preliminary data from the General Administration of Customs, the Beijing imported 33.06 million metric tons of crude oil in September, resulting in 18% rise from a year earlier or an increase of 8.04 million barrels per day (bpd).
The China’s import, as Reuters reports, surpassed the U.S. four-week average of 7.98 million bpd at the end of last month, beating the US as the top buyer second time this year.
Media reports revealed that the latest rise in China’s import was due to the high demand from country’s teapot refineries. Beijing recently permitted those independently owned refineries to directly import crude.
In addition, the change in import was also caused by the slowing crude production in the country and efforts to fill the newly-built storage tanks that can take up to around 19 million barrels of crude.
Harry Liu, associate director of oil markets with IHS Energy, was quoted by the news agency as saying: “The increase was mainly driven by stocking activities at some reserve sites.”
According to August data, the country’s crude production fell 10% year over year to 16.54 million tons.
Meanwhile, S&P Global Platts said the countries oil demand contracted 4.3% year over year in August to 10.76 million bpd, due to a contraction in demand for gasoil, fuel, oil and gasoline, reported Marketwatch.
Song Yen Ling, senior analyst with Platts China Oil Analytics, was quoted as saying: “It is likely that if exports of oil products continue unabated, overall apparent demand for the whole of 2016 could be lower than in 2015.”
“Chinese refiners have typically built product stocks toward the end of the year, but ongoing oversupply in the domestic market could mean that exports will be sustained,” she added.