Lower oil prices have pushed Chinese refiners down, with purchases and estimated inventory additions slowing significantly in October and November after oil prices hit 2023 highs at the end of the year. will likely be encouraged to buy more oil and send that amount to stockpiles. September.
Chinese refiners are estimated to have bought more crude as oil prices fell in November and December, and if prices remain subdued below $80 per barrel, China’s crude oil imports will decline. The paper said the economy could be back on track by early 2024. Reuters columnist Clyde Russell.
According to Russell’s calculations, China is estimated to have added about 950,000 barrels per day (bpd) of crude oil to its stockpiles in the first half of 2023, but from July to November 2023, the stockpile was reduced to about 24 million barrels per day (bpd). It is likely to slow down to 10,000 barrels.
Russell estimated in the middle of last year that China accelerated its oil stockpiling pace in June due to the low price of Russian crude oil, resulting in the largest monthly increase in inventories in the past three years.
China does not report commercial or strategic inventories, so analysts try to estimate stockpiles by subtracting processed crude from all available crude oil from imports and domestic production.
With crude oil prices currently down about 20% from their 2023 high of $98 per barrel, Chinese refiners were forced to buy larger quantities of crude oil earlier this year, especially at prices around $75 per barrel. There is a possibility that there will be an increased incentive to import.
China also just allocated large crude oil import quotas to refiners, raising quotas by about 60% since the beginning of last year and giving some companies year-round import quotas. Experts told media on Tuesday that early allocation of large import quotas would help refiners better plan their crude oil purchases in 2024.
Written by Tsvetana Paraskova, Oilprice.com
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