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China imported an average of 10.29 million barrels per day of crude oil in July, a significant decrease from June but still 17% higher year-over-year, according to Reuters.
This compared with a daily average of 8.79 million bpd in July 2022, the report noted, citing figures from the Chinese customs administration.
Still, the July oil import figure was a decline on a monthly basis, after refiners imported a record 12.67 million barrels daily in June. The figure was a 45.3% increase on the year and came despite lukewarm demand in the country as refiners sought to build their inventories.
The country is also building its strategic oil inventories with Russian crude. In June, according to Reuters calculations, state refiners added a record 2 million barrels daily to its strategic reserves, which Beijing does not officially report.
Based on 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.
“We expect pretty sizable deficits in the second half with deficits of almost 2 million barrels per day in the third quarter as demand reaches an all-time high,” the bank’s head of oil research, Daan Struyven, told CNBC last month.
China is widely seen as the single biggest driver for oil prices as one of the world’s largest consumers but also the largest importer of the commodity. Goldman Sachs recently said China had played the key role in oil’s latest rally that began in July thanks to its strong demand and to Beijing’s stimulus measures.
Right now, the latest import figures served to keep prices stable rather than spur further gains, as they represented a monthly decline, sparking concern about the immediate outlook for oil demand, Reuters reported earlier today.
By Charles Kennedy for Oilprice.com
Charles is a writer for Oilprice.com