China's Surplus Crude Oil Hits Nearly 1 Million bpd for September: Russell

SEATTLE (Oil Monster):  The weak position of China's crude oil sector was underlined by September data showing a sixth consecutive monthly drop in refinery processing, leading to nearly 1 million barrels per day of oil being available for storage.

China's refineries processed 14.29 million bpd of crude in September, up slightly from 13.91 million bpd in August, but down 5.4% from the same month in 2023, according to official data released on Friday.

The softness in refinery throughput followed earlier data showing crude imports fell 0.6% in September from a year earlier, slipping to 11.07 million bpd, the fifth straight month that imports were less than in 2023.

The frailty of China's oil sector meant that the ongoing pattern of this year of significant volumes of surplus crude were available to be added to either commercial or strategic storages.

China, the world's biggest crude importer, doesn't disclose the volumes of oil flowing into or out of strategic and commercial stockpiles, but an estimate can be made by deducting the amount of crude processed from the total of crude available from imports and domestic output.

Domestic production in September was 4.15 million bpd, up 1.1% from the same month last year, according to data from the National Bureau of Statistics.

Putting domestic output together with imports gives a combined total of 15.22 million bpd available for processing.

Refinery throughput was 14.29 million bpd, leaving a surplus of 930,000 bpd.

For the first nine months of the year the total volume of crude available was 15.25 million bpd, while refinery throughput was 14.15 million bpd, leaving a surplus of 1.1 million bpd.

It's worth noting that not all of this surplus crude has likely been added to storages, with some being processed in plants not captured by the official data.

But this will only be a relatively small volume, meaning that overall China has been importing crude at a far higher rate than it needs to meet its domestic requirements.

Courtesy: www.reuters.com