OIL: MNI Commodity Analysis: Slipping China Refinery Runs Rattling Oil Markets

(MNI London)

• Latest China customs data shows a crude import gain m/m in October. They arrived at pace despite a weaker refinery run backdrop into the tail end of the year, which has been supportive of China stock builds in late October.
• As eased Venezuelan sanctions increases competition for its crude barrels, Shandong refiners face pressure to maintain their supply – a mainstay cheap feedstock source this year.
• China oil product export quotas near their limits, while domestic travel demand faces seasonal unwinding, prompting refiners to cut runs due to weaker margins and more costly feedstock. Crude import quotas are also tightening.
• China may have imported record levels of Iranian crude in October (+1.8mn bpd) but substantial volumes came out of floating storage and went into China stockpiles. Meanwhile, Iranian crude exports slipped to a three-month low of 1.43mn bpd in October on weaker teapot demand.

MNI Commodity Analysis - Slipping China Refinery Runs Rattling Oil Markets.pdf