China oil imports surge to a fresh high

China’s crude imports record a fresh high in February as the government and local refineries continued to take full advantage of the prolonged low oil prices.

China’s General Administration of Customs confirmed Monday that February crude-oil imports rose 24.4% from a year earlier to 31.8 million metric tons, equivalent to roughly 8 million barrels a day, the highest daily average on record.

While China’s economy growth has been slowing, the world’s second-largest energy consumer remains a bright spot for crude suppliers, thanks to the government’s aggressive effort to fill up its strategic petroleum reserves and robust oil demand from local independent refineries known as teapot refiners.

Many teapot refiners have been increasingly buying up crude from neighboring countries, raising imports from countries like Indonesia, Vietnam and Malaysia, said Virendra Chauhan, an oil analyst at Energy Aspects.

“They have less flexibility in that they can’t import crude from further afield because they can’t hedge,” Mr. Chauhan said. “They want regional crude.”

Analysts say the dozen of the teapot refineries that have been approved to import foreign crude currently account for around 10% to 12% percent of the China’s total crude imports.

In 2015, China’s crude imports grew 8.8% and are projected expand another 6% this year, said Song Yen Ling, an analyst for Platts China Oil Analytics.

In February, China’s diesel imports rose to 33,331 tons, while diesel exports rose almost 600% to 792,422 tons, the data showed.

Gasoline imports rose by 117% to 864,152 tons and exports rose 168% to 600,854 tons in the same month.

Kerosene imports fell 40% to 230,389 tons, while fuel oil imports were down 33% at 1.1 million tons.

Source: MarketWatch