Monday , June 17 2019

China eases back on Mideast, African oil after buying binge


China’s crude oil purchases from the Middle East and West Africa dropped to a four-month low in December, following a buying binge the previous month that saw the Asian country’s stockpiles swell.
Observed flows to China from the two regions dropped to 5.04 million barrels a day, the lowest since August, after reaching a 2018-high of 6.45 million barrels daily in November, ship-tracking data compiled by Bloomberg show. Most of the barrels that left in December should arrive this month or in early February, since deliveries take between 25 and 40 days.
Barely six weeks ago — as crude prices plunged — China seemed to be scooping up just about every oil cargo it could get. The December slump comes amid concerns about an economic slowdown in the country, the world’s largest oil importer. The Asian nation is in the midst of a trade war with the US, which could translate into lower growth in demand for crude.
Other factors are also at play. China’s overall crude imports and its implied crude surplus surged to a record in November, according to government data and Bloomberg calculations. That occurred as the country’s refiners sought to use up their remaining import quotas for 2018. “The ease in flows to China coincides with the refiners expiring their year-end crude import quotas, as it takes about one month for the volumes to reflect in their tanks,” said Shiv Talsania, a refining analyst at Facts Global
Energy in London.

Observed crude exports to China from the Persian Gulf, including non-Opec member Oman, last month tumbled by 27 percent to 3.46 million barrels a day.
That’s the lowest since January of last year, when those shipments were at roughly the same level. Flows from Saudi Arabia, China’s top supplier of crude oil in November, fell last month to 1.39 million barrels a day from 1.6 million previously, according to Bloomberg tanker-tracking.
Exports to China from West African ports dropped by 7 percent in December to 1.58 million barrels a day, a two-month low. However, shipments from the region remained well above the January-November average of 1.28 million barrels a day.

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