(Bloomberg) – China has started to run down its crude stockpiles, which could indicate that refiners are preparing to boost fuel exports as part of the government’s efforts to revive the economy.
Onshore crude stocks stood at 909 million barrels on Sept. 15, the lowest since May 12, according to Emma Li, an analyst at Vortexa Ltd. About 1 million barrels a day have been withdrawn from stockpiles for the past three weeks, she said. According to analyst Geoffrey Craig, satellite data company Ursa Space Systems put the figure at 1.05 billion barrels, down 7.5 million barrels from the previous week and the fourth weekly withdrawal of five.
The reduction may only be seasonal, but it could also be an indication that processors are increasing production rates in anticipation of a push to produce and export more fuels, including gasoline and diesel. Refiners and traders have requested an additional 15 million tonnes of export quotas which, if approved, would increase previous allocations this year to levels similar to all of 2021.
According to a note from industry adviser FGE, national oil companies are considering increasing their utilization rates by 10% to 15% next month, although granting the extra quotas is still the subject of wrangling between different government departments, Energy Aspects Ltd said.
JP Morgan Chase & Co., meanwhile, said China was unlikely to approve that level of exports, calling the amounts requested excessive.
Oil refining activity has held near pandemic-era lows for the past few months. China is slow to consume stored crude due to a weaker economy and the government’s tight virus controls that have stifled use of transportation fuels and demand for petrochemicals.
(All Beijing times unless otherwise noted)
- IEA webinar on the transformation of the electricity sector in China, 15:00
- Panel discussions of the EU-China Energy Cooperation Platform on the future of gas with a focus on security of supply and CO2 capture, 3:00 p.m
- China Mining Conference and Exhibition, online, day 1
The slump in China’s metal-intensive real estate market appeared to deepen in July and August, says Bloomberg Economics. Fresh cuts in mortgage rates and efforts by local governments to boost demand for housing are failing, and the sector faces a painful long-term adjustment. Decisive political steps may be required to prevent a crash scenario.
Demand for housing in a deep slump
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Thursday 22 September
- EU-China Energy Cooperation Platform panel discussions on future of gas with focus on competitive markets and renewable gas, 15:00
- China Mining Conference and Exhibition, online, day 2
- USDA Weekly Crop Export Sales, 08:30 EST
Friday 23 Sept
- Bloomberg China Business Survey for September, 10:00 am
- Weekly Stockpiles at Iron Ore Ports in China
- Shanghai Stock Exchange Weekly Inventory, ~3:30pm
- China Mining Conference and Exhibition, online, day 3
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