China's crude oil stocks rose by 525,000 b/d in July, half the build seen in the same month of last year due to lower crude supply and higher throughput, although the country is still on its way to raise its stockpiles, calculations by S&P Global Platts based on latest official data showed.
The stock increase was 8.5% faster than the 484,000 b/d registered in the previous month, and within the range of a relatively stable build level as June, which fell significantly from a sharp build-up of over 1 million b/d each in the months of May, April and March.
China does not release official data on stocks. Platts calculates China's net crude stock draw or build for the month by subtracting refinery throughput from the country's crude supply. The latter takes into account domestic crude production and net crude oil imports.
Crude supply in July stood at 11.24 million b/d, which was the lowest level since December and also 2.1% lower than that in last July, due to a slowdown in crude oil imports as well as lower domestic crude oil output.
Crude oil imports fell to a six-month low of 7.35 million b/d as independent refiners' buying cooled from the wave started in December last year.
Meanwhile, domestic crude oil output hit the lowest level of 3.95 million b/d since October 2011, when was recorded at 3.91 million b/d. Chinese producers have decided to cut domestic production in 2016 to reduce cost amid low crude prices. At the same time, crude oil throughput saw a 2.5% year-on-year increase, but fell 2.7% from June.
Looking forward, China is expected to continue building crude stocks, given that throughput would stay at the July level or lower because of weak oil products demand in August.
Moreover, the country is continuing to fill its strategic petroleum reserves, including new sites in northeastern China's Jinzhou (18.9 million barrels) and southern China's Yangpu (9.69 million barrels).
Analysts also expect the new Huizhou storage in southern China and Zhoushan Phase II in eastern China, each 31.45 million barrels in capacity, to start taking in crude oil next year.
Over January-July, the country's crude stocks grew by an average 778,000 b/d, equivalent to 165.80 million barrels over the period.
This was 80% higher than the 432,000 b/d, or 91.67 million-barrel build seen in the same period last year. China had built 186 million barrels of crude stocks over 2015, averaging 510,000 b/d.