China Sept crude oil, gas imports jump ahead of winter fuel demand

BEIJING (Reuters) — China’s September crude oil imports climbed to the second highest level on record, while natural gas imports rose nearly 5%, official customs data showed on Friday, as the world’s top energy consumer shored up fuel supplies for winter.

For the year to date, gas imports were 48.38 MMt, up 22.3%, data from the General Administration of Customs showed.

Gas arrivals last month reached 5.94 MMt, up 3.7% from a year ago and up 4.9% from August.

China is preparing to heat millions of homes with gas for the first time, which has stoked demand for LNG imports, as they are cheaper than domestic supplies.

“More demand for the clean fuel from winter heating and massive gasification projects, especially in provinces such as Hebei and Henan, will push imports to a fresh record in the fourth quarter,” said Liang Jin, an analyst with commodities consultancy JLC said.

Asian LNG spot prices LNG-AS have soared 57% since March to $8.50/MMBtu on growing demand for gas in the world’s second-biggest economy.

Crude oil imports C-CNIMP-PRM rose 12% in September to 37 MMt, or around 9 MMbpd, up from an eight-month month low in August, boosted by buying from China National Offshore Oil Corp’s new refinery and a fleet of independent refiners.

Year-to-date, crude buying rose 12% from a year ago to 318 MMt, or 8.5 MMbpd, a record high.

“September imports were higher than expected. The support mainly comes from CNOOC’s Huizhou refinery which just started and some teapot plants returning from maintenance,” said Harry Liu, downstream expert with consultancy IHS Markit.

Liu expects imports through the fourth quarter to average about 8.6 MMbpd, with import growth to ease due to a domestic surplus of refined fuel.

“The government’s fuel export quotas are having an impact on refinery throughput and subsequently on crude oil imports,” he said.

Total oil product exports in September fell 11% to 3.82 MMt from a year ago and dropped 17% from August.

The Commerce Ministry issued a fourth batch of refined product export quotas in late September to ease oversupply in the domestic market.

Major refiner Sinopec and PetroChina have applied for extra quotas to export more gasoline, diesel and jet fuel before the end of the year, sources told Reuters.

Reporting by Meng Meng, Aizhu Chen and Josephine Mason; Editing by Kenneth Maxwell and Sonali Paul

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