CHINA'S OIL IMPORTS UP TO 11%
PLATTS - Crude oil imports by China's independent refineries in eastern Shandong province, Xinhai Petrochemical in Hebei and Fengli Petrochemical in Henan rebounded 11% month on month to around 7.435 million mt in October, or 1.76 million b/d, according to a monthly survey by S&P Global Platts.
October imports rose from an 11-month low of 6.69 million mt in September as independent refineries were trying to use up their crude quota allocations by end October in order to secure a full allocation of quotas for 2018.
At end October, the remaining import quota volume for November and December stood at around 20.2 million mt, most of it held by the refineries that had received fresh quota allocations in recent months.
In October, 21 independent refineries -- 19 in Shandong, Xinhai and Fengli -- received a total 6.19 million mt of imported crude, Platts data showed. Some of this volume could be resold to other refineries, including non-quota holders, market sources said.
The balance of the import volume in the month was received by trading companies Vitol, BP, Trafigura, Mercuria, Gaida, Huayue, Taifeng Hairun and PetroChina's trading arms that supply to independent refineries.
The total for October crude imports included parcels that arrived at ports in Shandong and Tianjin and completed discharge operations in the month, as well as cargoes that arrived in late September and finished offloading in early October.
After a drop in September, ChemChina overtook Dongming to be the biggest buyer among the independent refineries in October, taking 1.28 million mt of crudes, up 108% from September.
The company received around 715,000 mt of Russian ESPO blend, accounting for 56% of total imports, with the balance being 307,000 mt of Malaysia's Nemina crude, 130,000 mt of Djeno and 130,000 mt of Mondo.
Dongming was the second-biggest importer at around 686,000 mt of crude, up 3% month on month. The refinery received VLCCs of Merey crude and Oman crude, with the balance being Napo crude from Ecuador. It was the first import of Napo by an independent refinery; it is a heavy, sour crude, with a 19 API and 2% sulfur content.
Qingyuan rose to be the third biggest buyer in October, importing around 487,000 mt of crude, surging from 167,0000 mt in September.
The refinery in October imported around 90,000 mt of Malaysia's Panera crude, the first by an independent refinery.
PetroChina's trading arm sold one similar cargo last month, but it could not be immediately confirmed if it was the supplier to Qingyuan.
Market sources said the refinery was in a rush to utilize its crude quotas as production at its facility in Zibo has not been stable in recent weeks.
Some refineries in Zibo were running at lower rates during the second half of October in order to cut emissions during the 19th National Congress of the Communist Party of China.
AVAILABLE QUOTAS AT 20 MIL MT FOR NOV, DEC
Over January-October, the 27 crude quota holders surveyed reported importing 60.3 million mt of crude, leaving 20.2 million mt, or 25% of the annual quota allocation, to be filled by year end, according to Platts calculations.
But most of those quotas are held by refineries that received quotas in the second half of the year, as those major regular importers were running low after aggressive imports in previous months.
Refineries holding fresh quotas will ramp up imports in the coming months in order to fully use up their quotas, with an eye on ensuring they received full allocations for next year. But it is unlikely overall crude imports will continue at the same pace for the last two months of the year.
For those that run on low quotas, buying Venezuelan Merey crude, Boscan crude and other light crudes from PetroChina Fuel Oil Company could be an option, as this would not require a refinery to use its own quota allocation.
Independent refineries can also choose to import fuel oil and bitumen blend in place of crude oil, as has been done by ChemChina.
In October, ChemChina imported about 83,000 mt of fuel oil, the only one to take fuel oil as feedstock.
In addition, about four cargoes of bitumen blend arrived in Shandong port last month, totaling around 392,000 mt. This was in line with the volume that arrived in August of around 410,000 mt.
"Demand for bitumen blend has increased a little bit due to low quota problems towards the end of the year," said a trader source in Shandong. But only a few refineries are willing to crack the grade as it is not the ideal feedstock for most refineries, sources said.
Domestic offshore crude will also be an alternative for those refineries with low quotas.
CRUDE IMPORTS IN NOV TO DROP
Crude imports in November are expected to slide from October as quotas will be a big issue for most independent refineries, according to market sources.
"The imports are likely to slow down as only those new quotas holders have sufficient quotas on hand," said a trader in Shandong.
But those quota holders are reluctant to sell their quotas, even though the fee of quota transactions has recently been raised to around Yuan 200 ($29)/mt from around Yuan 180/mt.
"Still no one is willing to sell, and few quota deals are made as all refineries would like to keep it for themselves," the trader said.
Due to the lack of quotas, trading companies have to slow their imports in November and December, which would contribute to a drop in overall imports.
Major independent refineries, on the other hand, will generally maintain their import pace according to their production schedules.
China's oil product demand typically strengthens towards the end of the year, and gasoil has been is in strong demand in recent weeks.
|November, 20, 09:35:00|
|November, 20, 09:30:00|
|November, 20, 09:25:00|
|November, 20, 09:20:00|
|November, 20, 09:15:00|
|November, 20, 09:10:00|
REUTERS - India’s natural gas consumption is expected to rise to 70 billion cubic metres (bcm) by 2022 and 100 bcm by 2030, according to a government think tank and the Oxford Institute of Energy Studies, up from 50 bcm now. India burns just 7 percent of what top user the United States consumes in a year with about a quarter of India’s population.
Norway, which relies on oil and gas for about a fifth of economic output, would be less vulnerable to declining crude prices without its fund investing in the industry, the central bank said Thursday. The divestment would mark the second major step in scrubbing the world’s biggest wealth fund of climate risk, after it sold most of its coal stocks.
WSJ - Light, sweet crude for December delivery rose $1.41, or 2.6%, to $56.55 a barrel on the New York Mercantile Exchange, snapping a three-session losing streak. Brent, the global benchmark, advanced $1.36, or 2.2%, to $62.72 a barrel.
U.S. Rig Count is up 327 rigs from last year's count of 588, with oil rigs up 267, gas rigs up 61, and miscellaneous rigs down 1 to 1. Canada Rig Count is up 24 rigs from last year's count of 184, with oil rigs up 9 and gas rigs up 15.