Implied demand reached 13.22 mb/d in October, higher y/y by 0.64 mb/d from a weak base. Actual demand (adjusted for stock changes) was likely higher as stocks tend to draw seasonally by around 4 mb, and was up y/y by 0.80-0.90 mb/d.
Implied gasoline demand reached 3.67 mb/d, (+0.56 mb/d y/y), on increased driving during the week-long national holiday in early October. But refiners are increasingly concerned about demand due to declining car sales and the government’s growing support for electric vehicles.
Diesel demand reached 3.84 mb/d (+28 thousand b/d y/y) from an already high base, supported by a renewed government push to develop infrastructure projects, the start of the heating season, and higher marine gasoil demand following the shift to 0.5% sulphur bunkers for all vessels operating within the Yangtze River Delta Emissions Control Area (ECA) starting 1 October.
China’s crude imports surged to a record 9.63 mb/d (+2.31 mb/d y/y) from a low base, spurred by teapot buying, restocking and fears that the US will exercise zero tolerance and force refiners to cut imports from Iran. Crude imports will remain strong through year-end, easing in January.
China’s net product imports reached 0.76 mb/d in October, higher y/y by a strong 0.27 mb/d as imports surged to near-record highs—mainly driven by LPG restocking—but exports fell to their lowest levels since October 2017, led by gasoline, due to limited product export quotas.
Crude production in October reached 3.80 mb/d, higher y/y by 63 thousand b/d, a surprising reversal of y/y declines. Output also rose by a solid 0.10 mb/d from September levels, when typhoon Mangkhut curbed production.