China's April oil imports fall 0.2% y/y as refining margins narrow

China's crude oil imports in April fell 0.2% from a year earlier as refiners curbed production to relieve a squeeze in profit margins brought about by rising crude oil prices and bulging inventories.

The world's biggest crude oil buyer brought in 40.36 million tonnes of crude oil in April, or 9.82 million barrels per day (bpd), data from the General Administration of Customs showed on Friday.

That was the lowest since December and was down from 11.69 million bpd of imports in March.

As crude oil prices hovered above $60 a barrel, versus historic lows a year earlier, refiners - in particular small, independent plants - faced shrinking margins as overall fuel supplies swelled due to increased operations at larger, more efficient private refiners.

Margins were also hurt as traders brought in a record amount of light cycle oil (LCO), a blending fuel for making diesel, pushing stocks of diesel to multi-year highs. LCO inflows are expected to slow due authorities' clampdown on illicit trading of the fuel.

However, analysts said robust domestic fuel demand and reviving refining margins in recent weeks are likely to prompt some refiners to shorten maintenance periods, bolstering crude trade in coming months.

"We expect imports over May-June to be higher than what the market previously anticipated. Crude imports should rise to 11.0-11.5 million bpd levels in August-September, with the ramp up of new refining capacities," said Chen Jiyao, head of China client advisory at energy consultancy FGE.

Friday's data also showed China's refined fuel exports fell 14.8% over April 2020 to 6.82 million tonnes, despite the bulging inventory at dominant state refiners.

Natural gas imports, including piped and liquefied natural gas, reached 10.15 million tonnes last month, up 31.5% from a year earlier. (Reporting by Muyu Xu in Beijing and Chen Aizhu in Singapore; Editing by Christopher Cushing)

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