China Oil Stockpiles Reach Record High

China may be bolstering its emergency crude reserves as refiners in the world’s second-largest oil consumer expanded commercial stockpiles to a record high in May.

Crude inventories rose 4 percent from April, China Oil, Gas & Petrochemicals, published by the official Xinhua News Agency, said in an e-mailed report today. That’s about 33.59 million metric tons, or 246.2 million barrels, the most in records going back to January 2010. Gasoline supplies also swelled to a record, climbing 0.9 percent to an estimated 7.6 million tons.

China’s commercial oil stockpiles can be channeled for strategic use, according to industry consultants including ICIS-C1 Energy in Shanghai and FGE in Singapore. Refiners accelerated crude imports in April and May as the nation sought to increase its energy security with prices at a “fairly” high level, said Amy Sun, an oil analyst at ICIS-C1.

“We believe high commercial stocks may indicate refiners are potentially stocking feedstock for the government,” she said by phone from Guangzhou today. “China may be taking this opportunity to start filling strategic storage.”

OGP said its inventory data excludes supplies in national reserves, while the Chinese government doesn’t publicly release strategic stockpile figures.

via Bloomberg

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza