China's fluctuating crude oil imports & refined fuel exports

SHANGHAI (Reuters) -December's crude oil imports hit 7.94 MMbpd. That was down 12 percent from November's 9.01 MMbpd, the second-highest level on record. Buying eased in December as refiners and fuel distributors drew on inventories after hefty stockpiling in the previous month, said Seng-Yick Tee, analyst with SIA Energy.

Imports of crude oil for 2017 were up 10.1 percent over the previous year at a record 8.39 MMbpd, up 770,000 bpd, according to Reuters calculations. The import growth was fuelled for the second year in a row by independent refineries as the government allowed more firms to import crude, although some of them were forced to scale back operations as authorities stepped up environmental checks.

SIA Energy's Tee said the 770,000 bpd increases in last year's imports exceeded his forecasts, suggesting China's domestic fuel demand may be stronger than official data showed. "Given no big surge in fuel exports and mild stock builds in strategic (crude oil) reserves, the crude data points to under-estimates in domestic fuel productions," Tee said. Refiners churned out a sizeable amount of blending components, such as mixed aromatics and diesel substitute "raw white oil", that are not captured in official output data.

Declining oil output at home also contributed to the demand for overseas purchases. Daqing oilfield, the country's largest, recorded a 7 percent fall in 2017 output versus the previous year, as operator PetroChina scaled back high-cost production at the aging field.

Meanwhile China in December exported a record high 6.17 million tonnes of refined fuel, beating the previous peak of 5.79 million tonnes set in November. Total annual oil product exports last year hit 52.2 million tonnes, up 8 percent over 2016. The rush to export over the last two months of 2017 was spurred by additional quotas from the government.

Fuel imports last year rose 6.4 percent to 29.64 million tonnes.

(Reporting by Chen Aizhu; Editing by Richard Pullin and Kenneth Maxwell)

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