China has been the global oil market’s lifeline this year to increasing purchases from major oil producing countries in recent weeks, said Reuters in its Nov 19 story Global Crude Market Finds Support Mainly from China Demand.
In the first three quarters of this year, China imported 416 million tons of crude oil, a surge of 12.7 percent over same period of last year, according to official data. Reuters predicted that the country’s imports will reach 12 million barrels per day next year.
China was on track to be the only major country to boost its demand for oil year-on-year, said Reuters, citing the International Energy Agency.
Two traders were quoted in the story as saying that China’s crude oil demand would be increasing recently as the country has raised its quotas and (storage) capacity.
The global refining industry is shifting to China and the rest of Asia due to how the economies are quickly rebounding from the pandemic, and their demand for plastics and fuels grows, Bloomberg reported on Nov 22 in an article titled China to Take Oil-Refining Crown Held by US Since 19th Century.
Bloomberg cited the IEA as saying China will dethrone the US of its position at the top of the refining pack as early as next year.
“The rise of China’s refining industry, combined with several large new plants in India and the Middle East, is reverberating through the global energy system,” said the Bloomberg report.
China would put another million barrels a day or more on the table in the next few years, said the Bloomberg report, citing Steve Sawyer, director of refining at industry consultant Facts Global Energy.
China National Petroleum Corp’s Economics & Technology Research Institute was quoted in the press as saying China’s crude processing capacity is expected to climb to 1 billion tons a year, or 20 million barrels per day, by 2025 from 17.5 million barrels at the end of this year.
Moreover, India is also boosting its processing capability by more than half to 8 million barrels a day by 2025, including a new 1.2 million barrels per day mega project. Middle Eastern producers are adding to the spree, building new units with at least two projects totaling more than a million barrels a day that are set to start operations next year, Bloomberg said.
The Asian counties will have added more than half of the refining capacity during 2019 to 2027, with 70 percent to 80 percent of the capacity being plastics-focused, according to Bloomberg, citing data from consultancy Wood Mackenzie.
On Tuesday, the oil prices moved noticeably higher with the West Texas Intermediate and Brent crude for January both having increased.
Xinhua citied an energy analyst at Commerzbank Research as saying the positive sentiment came from vaccine news, which was making the market increasingly confident that the economy would gradually normalize, and that an agreement at next week’s meeting of OPEC and its allies (OPEC+) will be reached.