China June crude imports held at strong levels

Strong Chinese demand of oil helps to ease concerns over ongoing glut

China imported 36.11 million tons, or 8.79 million barrels per day ( bpd), of crude oil in June, customs data showed on Thursday, making the country once again the world’s top buyer for the month.

June imports were up 17.9 percent from a year earlier, according to Reuters calculations, although shipments dipped 2.9 percent from May’s figure, which was the second- highest on record.

Strong demand is being driven by low oil prices and growth in sports utility vehicle sales, said Neil Beveridge, a senior analyst with Sanford C. Bernstein in Hong Kong.

Appetite for imports is also being stoked by declining domestic output.

Average shipments to the US in June amounted to 7.94 million bpd in comparison, according to Reuters calculations based on weekly US data.

For the first six months of 2017, China shipped in 212 million tons of crude, or 8.55 million bpd, up 13.8 percent compared with the same period in 2016, according to customs.

Imports had grown to the second highest on record in May amid concerns over tightening crude supply in Asia as the Organization of the Petroleum Exporting Countries ( OPEC) and other producers extended production cuts to March 2018.

Crude inventories fell 7.6 million barrels in the week leading up to July 7 to 495.35 million barrels. The decline was the biggest since the week ending on September 4.

The strong demand from China eased concerns of an ongoing fuel supply overhang.

The OPEC said late on Wednesday that the world would need 32.20 million bpd of crude from its members next year, down 60,000 bpd from this year, as consumers have increasing choices of supply from outside the OPEC.

Shipments of natural gas to China during the first six months of this year were up 15.9 percent at 31.09 million tons, while imports of refined oil products fell by 2.8 percent to 15.03 million tons, the customs data showed.