China, the world’s biggest energy user, cut net crude oil imports to the lowest level in 18 months as refiners drew on inventories because of higher global prices.
Net purchases reached 16.1 million metric tons last month, or 3.8 million barrels a day, according to customs data released in Beijing today. That’s the lowest since May 2009 and down from the all-time high of 22.9 million tons in September.
Shipments in October were also below the monthly average in the January to September period, according to Bloomberg calculations based on government data. The drop came as the cost of each barrel of crude that China purchased from overseas increased an average of 2 percent compared with September.
“The low import volumes made up for the excess in September,” said Brynjar Eirik Bustnes, a Hong Kong-based analyst at JPMorgan Chase & Co. “Refineries absolutely need to draw on stockpiles.”
In the first nine months, refiners processed 310.64 million tons of crude to make fuels. With domestic crude production at 151.04 million tons during the period, China had to import about 160 million tons without having to draw on inventories. That’s imports of 17.7 million tons on average each month.
“Assuming similar throughput levels to September, the draw on stockpiles last month would be over 2 million tons,” according to Bustnes.
Fuel Imports Rise
China overtook the U.S. last year as the biggest automobile market and Germany as the largest exporter. Domestic automobile sales may exceed 17 million units this year, increasing fuel requirements, the National Energy Administration said last month.
Net imports of oil products, including gasoline and diesel, gained for a third month in October, rising 18 percent to 840,000 tons, according to customs, which doesn’t provide a breakdown by fuel type in its preliminary data.
In October, China paid an average $76.12 for each barrel of overseas crude compared with $74.63 in September, according to Bloomberg calculations based on the customs data.
Crude prices in New York have risen 17 percent since Sept. 1. Futures were at $86.74 a barrel in electronic trading at 3:57 p.m. Singapore time.