China Crude Stockpiles Drop to One-Year Low; Diesel Supply Gains

China’s commercial crude inventories dropped to the lowest level in a year in February, while diesel stockpiles climbed to the highest in 10 months.

Crude supplies, excluding emergency reserves, fell 2.9 percent from a month earlier, according to the official Xinhua News Agency’s China Oil, Gas & Petrochemicals newsletter today. Inventories declined to 28.02 million metric tons, or 205 million barrels, the lowest since February 2012, according to calculations by Bloomberg based on the data. Diesel inventories rose 18 percent to 11.19 million tons, the highest since April.

China ran down its crude stockpiles in February as imports and production dropped. Net purchases from overseas slid to 20.7 million tons, the lowest level in five months, customs data showed March 8. Domestic crude output was 16 million tons, the least in two years, figures from the Beijing-based China Federation of Logistics and Purchasing showed March 12. Oil demand typically falls over the Lunar New Year holiday, which ran from Feb. 9 to Feb. 15 this year.

“The crude stock drawdown is mainly because both output and imports are down,” Jean Zou, an oil analyst at ICIS C1 Energy, a Shanghai-based commodities researcher, said in an e-mail today. “The increase in diesel stocks is mainly due to the holiday break when refiners don’t have many diesel orders.”

China’s gasoline stockpiles slid 7.8 percent to 6.82 million tons, while kerosene inventories climbed 2 percent to 1.48 million tons, today’s data showed.

The nation’s diesel exports more than tripled in February from a year earlier to 254,871 tons and imports fell 74 percent to 45,736 metric tons, according to customs figures yesterday.