China, Japan, and India Could Help Crude Oil Bulls

China’s crude oil imports  

China’s crude oil imports hit a record in March 2017 at 9.21 MMbpd (million barrels per day). It hit the second-highest level in May 2017. China’s crude oil imports are at 8.76 MMbpd in May 2017. For more on China’s crude oil imports and demand, read Will China’s Crude Oil Imports Help Crude Oil Bulls? and China’s Teapot Refineries Impact the Crude Oil Market.

China is the second-largest crude oil importer and consumer after the US. Oversupply of crude oil’s refined products in China could weigh on crude oil prices and slow down Chinese crude oil demand. Lower crude oil prices have a negative impact on oil producers like Contango Oil & Gas (MCF), ConocoPhillips (COP), and Stone Energy (SGY).

China, Japan, and India Could Help Crude Oil Bulls

India’s crude oil imports and demand 

India is the world’s third-largest crude oil consumer after the US and China. It imports ~82% of its crude oil demand. India plans to reduce its dependence on imports 10% in the coming years. So, India increased its exploration and drilling activity in 2017.

India’s crude oil imports fell 4.2% in May 2017—compared to May 2016.

OPEC (Organization of the Petroleum Exporting Countries) released its Monthly Oil Market Report on June 13, 2017. It reported that India’s crude oil demand averaged 4.39 MMbpd in 2016. It rose to 4.53 MMbpd in 1Q17. Then, it fell to 4.37 MMbpd in 2Q17. Demonetization in India led to a slowdown in economic activity and oil consumption. However, consumption is expected to rise in 4Q17.

Japan’s crude oil imports 

Japan’s crude oil imports fell 13.5% in May 2017—compared to May 2016. Japan is the fourth-largest crude oil consumer. An aging and declining population in Japan led to the decline in Japan’s crude oil consumption. 

Impact on crude oil 

The expectation of slowing crude oil imports and demand from Asia could have a bearish impact on crude oil (XLE) (XOP) (USO) prices.

Read Is It the Beginning of Bottom Fishing for Crude Oil? and Dennis Gartman: Is the Pain Done for Crude Oil Futures? to learn more about crude oil prices.