MOSCOW (MRC) -- China still added more crude oil to inventories in the first two months of the year, despite lower imports and higher refinery processing rates, said Hydrocarbonprocessing.
About 270,000 barrels per day (bpd) of crude was added to commercial or strategic inventories over January and February, according to calculations based on official data. This was down from the 1.19 million bpd in December and the 740,000 bpd for 2022 as a whole.
The slower flow into storage tanks does support the market's bullish view for a rebound in China's oil demand in 2023 as the world's largest crude importer stimulates and reopens its economy after growth was crimped last year by the now abandoned strict zero-COVID policy.
But the fact that China is still building inventories also sounds a note of caution as it suggests that even as they ramp up processing rates, refiners still have bulging stockpiles to draw upon should the price of imported oil rise to levels they deem too high.
While the current oil price has been knocked lower by the two bank failures in the United States and the rapid takeover of struggling Swiss lender Credit Suisse, the market expectation is that a reinvigorated China will drive global oil demand this year, leading to higher prices.
China doesn't disclose the volumes of crude flowing into or out of strategic and commercial stockpiles, but an estimate can be made by deducting the amount of crude processed from the total of crude available from imports and domestic output.
The total volume of crude available from imports and domestic production in the first two months of the year was 14.63 million bpd, consisting of imports of 10.4 million bpd and local output of 4.23 million bpd.
The National Bureau of Statistics combines data for January and February to avoid distortions from the timing of the annual Lunar New Year holiday, which fell in late January this year.
We remind, Hengli Petrochemical has achieved on-spec purified terephthalic acid (PTA) production at its new facility located at Huizhou on 18 March. The company has a new 5m tonne/year PTA facility located at the site, split into two 2.5m tonne/year PTA units. On-spec PTA production was achieved at one of the two units.