As the rest of the world temporarily clears bottlenecks, China takes advantage of the cheapest crude oil for years to source as demand begins to return at Bloomberg, the world’s largest oil importer reported Friday, citing tanker tracking data he compiled. Currently, 117 very large crude oil carriers (VLCCs) – each capable of shipping 2 million barrels of oil – travel to China to be unloaded at its ports between mid-May and mid-August. If these supertankers carry cargoes of standard-size crude oil, it could mean that China expects at least 230 million barrels of oil in the next three months, according to Bloomberg. The fleet en route to China may be the largest number of supertankers ever traveling to the world’s largest oil importer, said Firat Kayakiran of Bloomberg News.
Many crude oil shipments are expected to have been purchased in April, when prices were below current prices and when WTI crude futures even fell into negative territory for one day.
Last month, after the coronavirus shutdown, Chinese oil refiners were already buy ultra-cheap cash goods from Alaska, Canada and Brazil, taking advantage of the significant discounts to which many grades of crude were offered to China with little demand elsewhere.
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It is also believed that China has doubled the filling rate to its strategic and commercial stocks in the first quarter of 2020, taking advantage of low oil prices and somewhat supporting the oil market in a context of declining demand by diverting more imports to storage, rather than simply reducing crude imports.
Chinese crude oil imports surged in April at around 9.84 million bpd as fuel demand began to rebound and local refiners began to speed up the processing of crude, according to Chinese customs data cited by Reuters.
By Tsvetana Paraskova for Oilprice.com
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