China’s oil imports hit an annual high in August, but output is still weak

Investing.com — China’s oil imports may have hit an annual high in August, but domestic production remains weak, Bank of America analysts said.

In a note to clients on Monday, analysts noted that customs data showed the world’s largest crude oil importer recorded arrivals of 49.1 million metric tons in August, or roughly the equivalent of 11.56 million barrels per day. day.

It was the highest monthly level since August 2023 and up from 9.97 million bpd in July — which was itself the weakest total in about two years.

Analysts at BofA said the increase was likely due to preparations for the upcoming bank holidays in early October.

However, they also signaled that output is still “low,” with a total of 59.1 million metric tons — or 13.9 million bpd — processed in August. The figure is flat from July, but down 9% from a year ago.

Concerns about the impact of sluggish economic performance in China have helped limit recent gains in crude oil prices, triggered by continued tensions in the oil-rich Middle East and potential US supply disruptions.

On Tuesday, Beijing unveiled a series of new stimulus measures aimed at boosting activity. Investors have long called on Chinese officials to implement such measures, although it remained uncertain whether the moves represented the massive “bazooka” that markets were looking for, according to Reuters.

The People’s Bank of China (PBOC) said it was now set to cut reserve requirements for banks by 50 basis points to unlock more liquidity, while the government also said it would cut mortgage rates on existing loans in a bid to support the distressed real estate market. .

The PBOC also cut the short-term repo rate on Monday in an attempt to shore up liquidity.

(Reuters contributed to this report.)