China crude imports rise to record high as storage expanded

SHANGHAI, China (Bloomberg) -- China’s crude imports rose to a record as a new strategic reserve site became operational and refineries prepare to process more oil. Net oil product exports also rose near a record.

The world’s biggest energy user imported 33.06 MMt of crude in September, according to data released by the General Administration of Customs on Thursday. That’s about 8.08 MMbpd. China’s net fuel exports were at 2.37 MMt last month, near the record 2.49 MMt in July.

China received two crude cargoes last month to help fill the second phase of Zhoushan emergency reserve facility on Aoshan island, according to ICIS China, a Shanghai-based commodity researcher. The nation’s oil processing in the fourth quarter will climb more than 5% from the previous period as refineries resume operations after seasonal maintenance, it said.

“Strategic stockpiling and higher oil processing going forward certainly helped boost imports last month,” Amy Sun, an analyst with ICIS China, said by phone from Guangzhou. "This trend will likely continue in the next couple of months."

Falling domestic production, expanding storage capacity and a seasonal uptick in demand through winter will likely support China’s crude imports in the fourth quarter, BMI Research said in a report last week. Crude production in the nation will stabilize with prices around $50/bbl and may not rebound until they are above $60/bbl, according to Neil Beveridge, a Hong Kong-based analyst at Sanford C. Bernstein & Co.

China held 31.97 MMt of crude in its strategic petroleum reserves as of early this year, equivalent to about 234 MMbbl, the National Bureau of Statistics said last month in a rare release of such data.

The country’s natural gas imports also climbed to a record, rising 72% from August to 5.73 MMt, Customs data show. That topped the previous monthly high of 5.23 MMt of gas imported in January. Customs data doesn’t separate liquefied natural gas and pipeline imports.