China's demand for crude oil is rebounding, with independent refiners pushing to buy before prices rise again from last year's low levels, restocking with stocks coming in. in March and April, commercial sources said.
The appetite of these refiners, often known as "teapots", has pushed up cash premiums for oil from Africa, Europe, Russia and Oman, with prices for certain grades reaching summits reaching several months.
This comes after the teapots slowed crude purchases for deliveries during the first two months of 2019, the demand for fuel that they emit generally fading during the Lunar New Year holidays, which fall this year in early February.
"It's as if someone were lighting a match and the market was catching fire," said one of the sources. All sources refused to be named because they were not allowed to talk to the media.
Brent's global reference price had fallen more than 30 percent to just over $ 50 a barrel by the end of 2018, but May's crude futures prices rebounded quickly to over $ 60 a barrel. this month.
Teapots tend to time their purchases of crude depending on fluctuations in oil prices, and will often follow when you buy others, sources said.
Cash premiums for raw grades popular with Chinese buyers range from 50 cents to more than a dollar a barrel more than the prices observed at the beginning of the month, they said.
For example, Oman's cash premium almost doubled last week to $ 1 a barrel since the beginning of the month, while Russian crude supply offers for delivery to China in March increased from 50 cents to around 3 cents a barrel. $ 20 a barrel until May, according to the ICE Brent futures contract. to Reuters sources and data.
However, demand is expected to cool by the end of the week as potential buyers leave the office for the Lunar New Year holiday week, sources said.
Consumption of refined products in China is expected to grow only 0.5% in 2019 compared to last year, while demand for gasoline would slow down with an expected decline of 5% sales of passenger cars, while diesel use would continue to contract with lower industrial output, said Lin Chen, Nomura group leader. Greater research on global energy markets in China, said in a note.
Nevertheless, the world's largest oil importer could see its crude imports reach 9.5 million barrels a day in 2019, up more than 4 percent from the previous year, Chen said.
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Refinery throughput in China is expected to reach a new record of 12.7 million bpd in 2019, 600,000 bpd more than last year, driven by the new Hengli Petrochemical and Zhejiang Petrochemical refineries. he adds.
The competition from these new factories means that it is unlikely that other independent refiners will increase their flow this year, said Chen.
In addition, it is unlikely that oil imports into the Shandong Refining Area in the east of the country will increase until Dongjiakou City ends the port expansion. Here at the end of the year, he said.