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China’s Crude Oil Imports Are near a Record Level

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China’s crude oil imports

China and the US are the top two crude oil consumers in the world. China’s General Administration of Customs reported that China’s crude oil imports rose by ~1,000,000 bpd (barrels per day) to ~9,000,000 bpd in September 2017—compared to August 2017. Imports rose 12.5% month-over-month and are at a four-month high. They hit record 9, 210,000 bpd in March 2017.

China’s crude oil imports rose due to the rise in imports from China’s teapot refiners. The imports also rose as refiners returned from seasonal maintenance. High crude oil imports from China (FXI) are bullish for crude oil (BNO) (DWT) (UCO) (USO) prices. High oil imports have a positive impact on tanker rates. Higher tanker rates benefit oil tankers like DHT Holdings (DHT) and Nordic American Tankers (NAT).

Higher Brent (BNO) and WTI crude oil (UCO) (SCO) prices have a positive impact on oil producers (IXC) (FXN) like Saudi Aramco, Stone Energy (SGY), and Denbury Resources (DNR). 

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China’s crude oil imports in the first nine months

In the first nine months of 2017, the crude oil imports from China are at 8.5 MMbpd (million barrels per day)—12.2% more than the same period in 2016. China’s crude oil imports averaged 7.6 MMbpd in 2016 and 6.7 MMbpd in 2015.

China’s crude oil imports drivers

The imports are estimated to rise in 2017 and 2018 due to the fall in domestic crude oil production, a rise in imports from Chinese teapot refiners, and more strategic petroleum reserve.

Impact 

High Chinese crude oil imports would likely benefit crude oil (BNO) (DBO) prices.

In the next part, we’ll discuss how India’s crude oil imports impact oil prices.

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