OPEC trims its China crude demand forecast, but nowhere near enough: Russell
The opinions expressed here are those of the author, a columnist for Reuters.
By Clyde Russell
LAUNCESTON, Australia, Oct 15 (Reuters) -OPEC cut its estimate for China's crude oil demand growth in 2024 for a third straight month in October, but the producer group is still massively optimistic given the reality of falling imports.
The latest monthly report by Organization of the Petroleum Exporting Countries (OPEC) said China's crude oil demand will expand by 580,000 barrels per day (bpd) in 2024.
This estimate is down from the 650,000 bpd gain forecast in September, and is also 180,000 bpd below the rise of 760,000 bpd OPEC was predicting in July for the world's biggest oil importer.
While OPEC is edging closer to reality, its demand forecast is hugely out of kilter with China's falling imports.
Official customs data released on Monday showed China's crude arrivals at 11.07 million bpd in September, down 0.6% from the same month in 2023 and the fifth straight month that imports dropped from the year before.
For the first three quarters of 2024, China's crude imports were 10.99 million bpd, down 2.8% from the 11.34 million bpd in the same period in 2023.
Imports are down 350,000 bpd in the first nine months of 2024, a figure that makes even OPEC's lowered demand forecast seem hopelessly wrong.
Of course, crude oil imports are only one element of total demand, others include any increase in domestic output or changes in inventory levels.
China's domestic oil output is up so far in 2024, with production in the first eight months coming in at 4.29 million bpd, which is 70,000 bpd above the same period in 2023.
But the increase in domestic output is still well below the decline in crude imports.
China doesn't disclose the volume of crude it holds in commercial and strategic stockpiles, but it's certain that they have been adding to them so far in 2024, rather than drawing down.
An estimate can be made of the volume of crude available for storage by subtracting the amount of crude processed from the combined total of oil available from imports and domestic output.
On this basis China's surplus oil for the first eight months of the year was 1.11 million bpd, which is about 300,000 bpd more than for the same period in 2023.
Overall, the picture that emerges from China's oil sector is modest growth in domestic output, but this is nowhere near enough to offset the decline in crude imports.
PRICE-LED RECOVERY?
The question for OPEC, and the broader oil market, is whether China's imports are likely to accelerate in the fourth quarter.
It's likely that the answer lies largely with prices, as evidence suggests that China has become a price-sensitive buyer in recent years, importing surplus volumes when the cost is low, but trimming arrivals and using stockpiles when prices are deemed to have risen too high, or too quickly.
It's perhaps no surprise that China's imports were soft in September, given that global crude prices were rising during the period when September-arriving cargoes would have been arranged.
Benchmark Brent futures LCOc1 rose from a four-month low of $76.76 a barrel on June 4 to a high of $87.85 on July 5, the time period when much of the September-arriving cargoes would have been bought.
Since then Brent has trended weaker, dropping to a 34-month low of $68.68 a barrel on Sept. 10, after which it has recovered to end at $75.19 on Monday, largely as a result of rising tensions in the Middle East amid the threat of an Israeli strike against Iran.
However, the declining price trend from July to mid-September may have encouraged Chinese refiners to boost imports, especially against the backdrop of the Middle East conflict.
If this is the case, China's crude imports may stage something of a recovery in the fourth quarter, but this is still unlikely to be enough to meet OPEC's optimistic view of the country's demand growth for 2024.
The opinions expressed here are those of the author, a columnist for Reuters.
GRAPHIC-Brent crude oil price in USD per barrel https://reut.rs/3NqvDRo
Editing by Stephen Coates
免责声明: XM Group仅提供在线交易平台的执行服务和访问权限，并允许个人查看和/或使用网站或网站所提供的内容，但无意进行任何更改或扩展，也不会更改或扩展其服务和访问权限。所有访问和使用权限，将受下列条款与条例约束：(i) 条款与条例；(ii) 风险提示；以及(iii) 完整免责声明。请注意，网站所提供的所有讯息，仅限一般资讯用途。此外，XM所有在线交易平台的内容并不构成，也不能被用于任何未经授权的金融市场交易邀约和/或邀请。金融市场交易对于您的投资资本含有重大风险。
所有在线交易平台所发布的资料，仅适用于教育/资讯类用途，不包含也不应被视为用于金融、投资税或交易相关咨询和建议，或是交易价格纪录，或是任何金融商品或非应邀途径的金融相关优惠的交易邀约或邀请。
本网站上由XM和第三方供应商所提供的所有内容，包括意见、新闻、研究、分析、价格、其他资讯和第三方网站链接，皆保持不变，并作为一般市场评论所提供，而非投资性建议。所有在线交易平台所发布的资料，仅适用于教育/资讯类用途，不包含也不应被视为适用于金融、投资税或交易相关咨询和建议，或是交易价格纪录，或是任何金融商品或非应邀途径的金融相关优惠的交易邀约或邀请。请确保您已阅读并完全理解，XM非独立投资研究提示和风险提示相关资讯，更多详情请点击 这里。
