Chinese refineries processed more crude oil in August – Commerzbank

Chinese refineries processed 63.46 million tons of crude oil in August, according to data from the National Bureau of Statistics (NBS). This was 7.4% more than in the same month last year, Commerzbank's commodity analyst Carsten Fritsch notes.

China's crude oil processing and imports have declined

"On a daily basis, this corresponded to a volume of just under 15 million barrels. This was the second-highest monthly processing volume in the last 17 months. Only in June was slightly more crude oil processed on a daily basis. In the first eight months, the volume of crude oil processed in China totaled 488 million tons. The daily average processing volume was 14.7 million barrels per day."

"Processing exceeded the level in the same period last year by 3.3%. According to the consulting firm Oilchem, refinery utilization rose to a good 72% in August. This was 2.6 percentage points higher than in the previous year. Despite the increase in crude oil processing, there was also an implied build-up of stocks in August, which at just over 1 million barrels per day was almost twice as high as in July. This was because crude oil imports rose even more significantly at the same time (we reported), and domestic crude oil production also increased slightly."

"Last year, China's crude oil processing and imports had still declined. This trend has reversed. The return to robust demand from China is thus helping to absorb, at least in part, the oversupply in the oil market resulting from OPEC+ production increases. The big question is how long this strong demand will last, as it exceeds actual demand, as shown by the implied inventory build."