Chinese oil inventories hit 4-month low, signaling potential increase in fuel exports

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  • About 1 million barrels a day have left Chinese oil inventories in the past three weeks, according to Vortexa data cited by Bloomberg.
  • Inventories hit 909 million barrels as of September 15, the lowest since May.
  • Oil refiners and traders in China have requested an additional 15 million tonnes of export quotas.

Crude oil inventories in China are falling, a potential signal that the country is gearing up to export massive volumes of fuel.

About 1 million barrels a day have left Chinese stocks in the past three weeks, according to Vortexa data cited by Bloomberg. Inventories hit 909 million barrels as of September 15, the lowest since May.

Oil refiners and traders in China have requested an additional 15 million tonnes of export quotas. At this amount, the allocations since the beginning of the year would correspond to the levels of the year 2021.

It could mean Beijing is preparing to unload a swath of gas and diesel into the market to help boost the economy.

Yet exhaustion could also be a seasonal adjustment. JPMorgan analysts say the level of outbound crude inventories is too high for China to approve the export.

China has not fully tapped its crude stockpile as the country continues to recover from Covid-19 lockdowns and a struggling economy that has slowed domestic demand.

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