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China 2016 crude oil import growth may exceed 800,000 bpd: analyst
[SINGAPORE] China's crude oil imports may rise by more than 800,000 barrels per day this year, boosted by storage needs, robust gasoline demand and fuel exports, an executive from a Beijing-based consultancy said on Thursday.
The jump in imports, if realised, could see China overtaking the United States as the world's largest crude importer after China's average crude imports hit a record 6.71 million bpd in 2015, up 8.8 per cent from a year ago.
China is expected to import 860,000 bpd more crude this year, Yao Li, chief executive of SIA Energy said at a Platts conference.
Independent refiners who recently received import quotas, have become a driver of Chinese crude demand and their preference for low-sulphur oil could cause producers from Venezuela and the Middle East to lose market share, Li said. "China's crude oil slate will become sweeter and lighter because of production yield requirement and as independent refiners prefer low-sulphur crude due to cost advantage," she said. "Middle East producers will probably lose more market share. Russian ESPO is the biggest winner." China's domestic oil consumption is expected to grow by 410,000 bpd as strong car sales boost gasoline use in the world's second largest economy, Li said. The estimate is higher than that of the International Energy Agency which sees China's oil demand growing by 330,000 bpd to 11.51 million bpd in 2016.
SIA Energy's Li expects Chinese fuel exports to rise by 330,000 bpd this year as local refiners, driven by strong margins, have increased output, although this will be offset by incremental imports of 120,000 bpd, including mixed aromatics for gasoline blending.
Most of the exports will be from state refiners rather than private companies as they have weak trading capabilities, Li said. Private refiners are "more likely to compete in the domestic market", she added.
China is also expected to import 240,000 bpd more crude than last year to fill storage tanks for strategic and commercial purposes, Li said.
More imports are also needed to replace falling domestic crude production, she said.
Sinopec said in February it will shut four small oilfields this year at Shengli in the eastern province of Shandong as low global oil prices take a toll on output from the country's ageing fields.