China's crude-oil imports rose to their second-highest level in May as refineries there were eager to capitalize on still-healthy refining margins amid low crude prices.
Continue Reading Below
Analysts say China's ongoing effort to fill the nation's strategic petroleum reserve also contributed to last month's rise.
In May, China imported 37.2 million tons of crude, marking a 15.4% jump from the same period a year ago, according to data from China's General Administration of Customs on Friday. On an average daily basis, China shipped in 8.8 million barrels a day last month. The total volume was modestly lower than March when crude imports set a record, reaching 38.95 million tons, or 9.2 million barrels a day.
May's climb was largely in line with expectations as Chinese refineries have been ramping up production. In May, the crude run rose 5.4% on-year to 46.62 million tons.
Moreover, China's rising crude demand comes at time when output is waning, giving domestic oil companies more impetus to buy from abroad. In May, China's crude production fell 3.7% on-year to 16.26 million tons a day, the lowest since China started publishing record in 2011.
Going forward, China's crude imports will likely continue to rise, analysts say. Last week, the government issued more crude import quotas to local refineries, both private and government-owned. The latest addition will push the cumulative volume to 91.73 million tons, surpassing last year's total quota.
Continue Reading Below
"This marks a U-turn compared to signs of cuts earlier this year when import quotas were trending below 2016 average," said JBC Energy.
But the question industry watchers are asking is how China's continual robust crude imports will translate to its exports of fuel products amid sagging domestic demand.
Custom data show in the first five months of the year, China's gasoline exports rose 21% compared with the same period last year, even though May's reading was down 18% year-over-year at 640,000 tons.
The same trend was spotted in diesel as May exports fell 17% on-year to 1.23 million tons but registered a jump of 21.3% on-year for the January-May period.
Write to Jenny W. Hsu at firstname.lastname@example.org
(END) Dow Jones Newswires
June 23, 2017 04:17 ET (08:17 GMT)