MRC -- Chinese refiners are actively booking crude oil cargoes for delivery in March and April to replenish stocks, locking-in relatively low prices and in anticipation of stronger demand in the second half of 2024, trade sources said, as per Hydrocarbonprocessing.
Global benchmark Brent futures have stayed under $80 a barrel since December despite rising tensions in the Middle East, making oil attractive, while Beijing has issued fresh quotas for crude imports and fuel exports to refiners, allowing them to boost purchases and operations.
Robust demand from the world's top crude importer is underpinning spot premiums for Middle East crude exports even as Asian refiners plan seasonal maintenance for the second quarter that typically reduces the region's oil demand.
"There will be a stock-building spree over the Q1-Q2, in preparation for the summer," said Kpler analyst Viktor Katona, repeating a trend seen by Chinese refiners in 2023. "This has worked wonders for them last year and this year it seems to have an even better delineation between a weaker H1 and a stronger H2."
China bought record volumes last year to build its biggest ever oil stockpile of more than 1 billion barrels. Refiners started drawing down stocks from late July, helping China to sail through a price rally powered by voluntary output cuts by OPEC kingpin Saudi Arabia last year.
China's crude stocks fell to 933-951 million barrels last week, data compiled by analytic firms Vortexa and Kpler showed, after refiners ramped up crude processing in the fourth quarter.
We remind, Borouge Plc launched five new grades to meet the growing demand in the infrastructure and advanced packaging industries in the Middle East, Africa and Asia. The launch supports Borouge’s growth and innovation strategy by increasing its market share in the piping market in the company’s core territories, valued at nearly $1 billion.