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PLATTS ANALYSIS: China's Apr. crude stockbuild rises to 446,000 b/d after 5-month drawdown
in-en.com  2013-5-21 9:38:15  

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May 20, 2013 - China experienced a surplus of crude supply, excluding barrels to its refining system, in April following five consecutive months of net drawdowns since November last year, implying additions to its crude oil inventory, according to Platts' analysis of government data.

The crude stockbuild averaged 446,000 b/d in April, the highest level since June 2012, when the stockbuild was 521,000 b/d.

The April stockbuild compared with a drawdown of 87,000 b/d in March, and was due to relatively lower refinery operating rates, higher crude imports and lower crude exports month on month.

Platts calculates China's net crude stock drawdown or build by subtracting refinery throughput from the country's crude oil supply, which takes into account net imports and domestic production of crude. The level of stocks held by refiners is not disclosed.

Crude oil imports in April had edged up 2.5% year on year and 3.5% month on month to 5.64 million b/d, according to data from the General Administration of Customs released May 8. This was a reversal from two consecutive months of year on year contractions in February and March.

Crude exports in April fell 68.8% month on month to 20,000 b/d, bringing net crude imports for the month to 5.62 million b/d, an increase of 4.3% from March and also 3.5% higher than in April 2012.

Data released Thursday by the National Bureau of Statistics showed that domestic crude production in April was 4.19 million b/d, similar to the March volume. This brought total apparent crude oil demand -- domestic production plus net imports of crude oil -- in China to 9.81 million b/d, 2.5% higher than the 9.57 million b/d seen in March.

In contrast, refinery runs in April had fallen by 3% month on month to 9.36 million b/d, even though they were up 2.5% year on year, according to NBS data released Monday. This was due to refineries going into seasonal maintenance.

Crude stocks had been rising from the latter half of March. The Xinhua-published China Oil, Gas and Petrochemical newsletter reported in April that commercial crude oil inventories rose 2.2% month on month at the end of March following five consecutive month-on-month decreases since October last year. End-April stock data will be released next week.

SOME STRATEGIC RESERVES FILLED

The crude stockbuild in April was 21.5% higher than the 367,000 b/d in April last year.

Over January-April, China saw an average stockbuild of 78,000 b/d, 74.7% lower than the 308,000 b/d seen in the corresponding period last year, according to Platts' calculations. There had been a sharp growth in crude imports in the first quarter of last year, so the overall stockbuild from January to April was still significantly higher than the same period this year.

Crude inventories may be channeled into commercial storage facilities and China's strategic petroleum reserve, both operated by state-owned oil companies.

In a report on Thursday, Bernstein Research said it estimates China's SPR level was close to 300 million barrels by March, "indicating that Phase 2 SPR has been filled."

China is developing about 500 million barrels of SPR storage in three phases. The first phase totals 103 million barrels and was completed in 2009 while the second phase will likely total 169 million barrels, although little is known about the construction progress.

Bernstein said the third phase of the SPR storage has a capacity of 28.2 million cubic meters (178 million barrels) and that China National Petroleum Corp. this year started constructing facilities in Rizhao, Shandong and Daqing.

"We expect 200,000 b/d of demand outside of apparent [oil] demand for the filling of this capacity," Bernstein said.

 
Author:in-en.com  From:platts.com  Edit:Susan
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