UPDATE 1-China's January crude oil imports hit record high

Wed Feb 12, 2014 5:14am GMT

Quotes

   

* Jan crude imports at record high 6.63 mln bpd

* Jan import up 11.9 pct on yr, up 5.1 pct on month

* Record imports vs weak crude runs suggests stocks rising

By Judy Hua and Chen Aizhu

BEIJING, Feb 12 (Reuters) - China's crude oil imports rose 11.9 percent in January from a year earlier to a record 6.63 million barrels per day (bpd), data showed on Wednesday, as companies restocked ahead of the Lunar New Year holiday despite tepid demand growth.

The high figure could also be due to data distortions ahead of the week-long break that fell across the first week of February, as companies tend to advance book cargos that are due to arrive in early February.

The world's top energy consumer took in 28.16 million tonnes, or 6.63 million bpd, of oil last month, up 5.1 percent from the previous record of 6.31 million in December of last year, according to the General Administration of Customs.

Demand for crude appeared less robust than the imports indicate as the top two state refiners Sinopec and PetroChina were due to process 1.9 percent less oil in January than in December, according to energy consultancy ICIS C1.

That suggests some of the imports went straight into storage. China will not release its official throughput data for the first two months of this year until mid-March.

"Refinery throughput is still kind of weak, this high amount of arrivals would mean some of the oil has to land in the tanks," a Beijing-based crude oil trader said.

The higher import purchases also follow a three-month drawdown in China's commercial crude oil inventories over the last quarter of 2013.

China's implied oil demand growth dropped to its lowest in more than two decades in 2013, coming in at just 1.6 percent as softer economic growth sliced into consumption of transportation and industrial fuels such as diesel.

Oil markets largely dismissed the record Chinese import figures, with Brent crude futures holding steady near $109 a barrel.

NEW TERM CONTRACTS STARTING UP

State-oil firms had higher-volume term crude contracts starting up in January with such suppliers as Iraq and Russian to feed new refineries coming online in the first quarter.

China has boosted its annual purchase of Iraqi crude by more than two-thirds to 882,000 bpd this year, trade sources said last year in November.

Russia's top oil producer Rosneft said this month it would ship an additional 180,000 bpd of oil this year to China and is continuing talks to further ramp up eastbound crude supplies.

Part of the Russian crude will feed PetroChina's $6 billion refinery and petrochemical complex in Sichuan province in the southwest, with 200,000 bpd in capacity, company officials have said.

State-run Sinochem Corp's new refinery, the 240,000 bpd Quanzhou plant, started test runs from mid-January. The plant is processing sweet crude from West Africa for test runs before switching to sour crude from the Middle East once it goes into normal operation, traders have said.

China's crude oil imports last year rose 4 percent, down from a 6.8 percent increase in 2012 as demand was hit by a slowing economy. Crude demand this year could rebound slightly as new refineries open, although growth may be capped by a lack of momentum in the broader economy.

China overtook the United States in September as the world's biggest net oil importer, a trend the U.S Energy Information Administration said would continue through 2014.

(Editing by Tom Hogue)

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.