China's refineries appear to have used the recent low Oil prices primarily to increase their inventories, Commerzbank's commodity analyst Carsten Fritsch notes.
"This is because the still high crude Oil imports in April were accompanied by rather weak crude Oil processing: It fell last month to 58 million tons or 14.1 million barrels per day, which was significantly below the March level and also 1.4% below the previous year's level."
"According to the Chinese consulting firm Sublime China, refinery capacity utilisation was at its lowest level since 2022 at just under 74%. Taking into account domestic Oil production, which was still 1.5% higher than the previous year, crude Oil inventories increased by just under 2 million barrels per day in April."
"Adjusted for net exports of refined products, which have now also been reported, China's apparent Oil demand in the same month was a good 5.5% below the previous year, according to Bloomberg calculations. This means that the second largest Oil consumption market remains a concern."