Beijing
China has gobbled up a record amount of Russian crude, adding some 2 million bpd to its strategic and commercial inventories last month.
This is the highest rate of inventory additions in three years, according to Reuters’ Clyde Russell. It is also an indication that the world’s second-biggest consumer of crude is insuring against the risk of supply shortages.
This is happening as analysts expect Saudi Arabia to extend its 1-million-bpd voluntary production cut and as Russia’s flagship Urals blend tops the Western price cap of $60 per barrel.
China’s crude oil imports hit a near-record last month, soaring by a whopping 45.3% on the year to 12.67 million barrels daily, data from the Chinese customs authorities cited by Reuters showed.
The total for the month stood at 52.06 million barrels, which was the second-highest monthly oil import figure ever recorded by Beijing.
With these figures, it would be sensible to suggest that China is filling up its storage facilities both as insurance against undersupply and as a potential tool to control prices by releasing some of that oil, should the need arise.
Yet while imports were rising to near-record levels and inventories were filling up thanks to these imports, Chinese refiners were also ramping up processing rates.
Reuters’ Russell reports that refiners in China processed some 14.83 million barrels daily in June, or a total of 60.95 million tons, which was an increase of 10.2% on the year and, like June imports, the second-highest monthly figure on record.
