China’s crude oil imports fall sharply in July – Commerzbank

China imported significantly less crude oil in July, notes Commerzbank commodity strategist Carsten Fritsch.

Downside risks to forecasts

“Imports fell nearly 12 percent from the previous month to less than 10 million barrels per day, according to customs data. This is the lowest level in nearly two years. Still high oil prices by mid-July and only reduced fuel demand pushed processing margins to an unattractive level for Chinese refiners and thus reduced refinery activity.

“The need for imports was correspondingly lower. However, imports have tended to weaken not only since July. In the first seven months of the year, they were 2.4% lower than in the same period of the previous year. If there is no notable growth in the remaining months of the year, there is a risk of an annual decline this year.”

“It appears that Chinese refiners are also finding it difficult to export surplus oil products. Fuel exports fell below 5 million tonnes in July for the first time in three months and were 4% lower than a year earlier after seven months. As such, there are downside risks to the forecasts, which assume a significant increase in oil demand in China and the rest of Asia in the second half of the year.”