China imported record volumes of crude oil last month, eclipsing the United States as the world’s top buyer of foreign oil as Beijing’s state reserves shipped in cheap crude to fill new storage tanks.
September’s crude imports rose 18 percent from a year earlier to 33.06 million tonnes or 8.04 million barrels per day (bpd) on daily basis, customs data showed.
The buying outpaced the U.S. four-week average assessed by the U.S. Energy Information Administration of 7.98 million bpd at the end of September.
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It marked the second time this year – but the third month in the past twelve – that China’s imports have overtaken the United States, and reflected contracts signed in July when renewed selling pressure pushed crude below $42 a barrel. Oil has since recovered to around $50 a barrel.
The shipments also arrived as Chinese refineries entered the final stretch of their annual maintenance season, which typically takes place in the third quarter.
With U.S. plants’ repair work extending into this month, the world’s largest economy could retake pole position in October, analysts said.
China’s strategic reserve is preparing to start filling late this year newly-built storage tanks that can take some 19 million barrels of crude, or about three days worth of imports, traders said.
“The increase was mainly driven by stocking activities at some reserve sites,” said Harry Liu, associate director of oil markets with IHS Energy, who said August and September volumes were higher than he expected.
That contrasts with earlier in the year when China’s independent refiners known as “teapots” were the driving force behind the imports.
Analysts from BMI research expected China’s crude imports to remain elevated for the rest of the year due to falling production, expanding storage capacity and a seasonal uptick in demand over the winter months.
Over the first nine months, import volumes rose 14 percent to 284 million tonnes, or 7.55 million bpd, according to the data. On a cumulative basis, the United States is still the biggest importer with more than 8 million bpd of imports.
China’s refined fuel exports in September rose 21.1 percent from a year ago to 4.3 million tonnes, near the record high 4.57 million tonnes notched in July and well up on August’s 3.7 million tonnes.
The month-on-month gain rekindled worries of a supply glut in fuel products and might weigh on oil demand in the fourth quarter, analysts said.