Last month, crude oil imports to China rose for the first time in seven months as lower prices stimulated stronger demand.
The average daily import rate in November stood at 11.81 million barrels, according to customs data from China. The total for the month came in at 48.52 million tons of crude, which was 14.3% higher than a year ago.
Chinese refiners likely took advantage of price cuts made by Saudi Arabia and Iraq—two major suppliers—and filled a gap left by Iranian oil due to lower loadings in November.
The year-to-date rate of oil imports, however, remains a decline on 2023 and chances are that the full 2024 figure will be lower than the 2023 total as well. This will probably add fuel to trader pessimism about future demand even as China doubles down on stimulus to accelerate its economic growth.
In November, the Chinese crude oil imports, likely incentivized by lower oil prices when cargoes were nominated, added to a surplus of crude available in the country, as refining activity did not rebound in lockstep with imports.
China’s excess crude oil supply averaged about 1.77 million barrels per day (bpd) last month, according to Russell’s estimates based on official data.
China does not report crude oil inventories, so analysts have to calculate and compare data for available crude -- combined imports and domestic oil production, minus the volumes of processed crude at refineries.
The estimated surplus for November was the second-largest for the year after August’s 1.85 million bpd, Reuters’s Russell notes.
Even if not all surplus crude has likely gone to storage, China’s excess supply this year has averaged around 360,000 bpd above the 2023 surplus.
