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Analyzing China’s Crude Oil Imports and Fuel Exports

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Dec. 4 2020, Updated 10:53 a.m. ET

China’s crude oil imports and fuel exports 

In this part of the series, we’ll look at China’s crude oil imports over the long term.

  • China’s General Administration of Customs reported that China’s crude oil imports fell by 0.2 MMbpd to 7.3 MMbpd (million barrels per day) in July 2016—compared to the previous month. This is 1.2% more than the same period in 2015. China’s crude oil imports fell for the second consecutive month. Imports fell due to the decline in demand from teapot refineries. However, China imported 7.5 MMbpd of crude oil in the first six months of 2016. This was 12% more than the same period in 2015. This is bullish for the oil market.
  • Platts surveys suggest that China’s crude imports in 2016 will average 7.4 MMbpd (million barrels per day)—10% higher than 6.7 MMbpd in 2015—due to demand from teapot refineries.
  • Slowing Chinese crude oil production due to aging oilfields and lower crude oil prices will also add to China’s crude oil imports.
  • China’s diesel exports rose by 181.8% in July 2016—compared to the same month in 2015. Its gasoline exports rose by 145.2% in July 2016—compared to the same month in 2015. The rise in Chinese fuel exports will put pressure on refined product margins. To learn more, read How Lower Refinery Margins Impact Crude Oil Prices.
  • The EIA estimates that China is planning to build 500 million barrels of strategic crude oil reserve space by 2020. This will also add to imports. 
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Impact on crude oil, energy stocks, and ETFs 

Higher crude oil imports from China will benefit crude oil prices. Higher crude oil prices will have a positive impact on oil and gas producers’ earnings such as Bill Barrett (BBG), Swift Energy (SFY), and Whiting Petroleum (WLL).

They also impact ETFs and ETNs such as the Fidelity MSCI Energy (FENY), the VelocityShares 3x Inverse Crude Oil ETN (DWTI), the Guggenheim S&P 500 Equal Weight Energy ETF (RYE), the Direxion Daily Energy Bear 3x ETF (ERY), and the United States Brent Oil ETF (BNO).

For ongoing analysis, visit Market Realist’s Upstream Oil and Gas page.

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