China’s implied oil demand in September hit 13.90 mb/d, up by 0.81 mb/d (6.2%) y/y, despite weakening economic indicators. Actual demand (adjusted for stock changes) was broadly in line with implied data, due to a relatively small change in product stocks.
Apparent gasoline demand rose by 0.13 mb/d m/m to 3.45 mb/d, lower by 41 thousand b/d y/y, with the m/m rise due to an uptick in travel during local holidays. Declines in car sales capped consumption growth, while higher runs weighed on domestic gasoline prices.
Apparent diesel demand reached 4.09 mb/d in September,42 thousand b/d higher y/y, as the decline in manufacturing PMI stabilised. Diesel demand will remain strong until December on rising infrastructure and factory activities.
China’s crude imports rose by 0.10 mb/d m/m to 10.06 mb/d in September (+ 0.98 mb/d y/y) despite a reduction in arrivals from the US and Iran. Arrivals will increase in October on low refinery works and higher margins. New import licences will support teapot buying for December cargoes.
China was a net importer of products in September at 0.12 mb/d. Net imports were lower y/y by 0.50 mb/d as exports rose, particularly for gasoline.
Chinese implied crude stocks fell by 0.13 mb/d in September, the first decline since March. Cargo-tracking and pipeline flow data peg total September Chinese arrivals at 9.42 mb/d, suggesting crude held in bonded storage tanks has cleared customs and made up the difference. The majors are estimated to have drawn around a record 35 mb of crude from their inventories in September.