Business

Crude oil imports decline on refiners' high inventories

By Wan Zhihong (China Daily)
Updated: 2010-08-11 13:28

BEIJING - China imported 14.7 percent less crude oil in July from a month earlier, which analysts described as a normal fluctuation.

The country imported 19 million tons of crude oil in July, down from a record high of 22.27 million tons in June, according to the General Administration of Customs on Tuesday.

Domestic refiners' high inventories may be one reason for the decline, said Qiu Xiaofeng, an analyst with China Merchants Securities. "But it is just a normal fluctuation," he added.

A Reuters poll showed that China's leading refineries were expected to have reduced crude throughput in July and August from a record high in June.

Echoing Qiu's views, Dong Xiucheng, deputy director of the Business and Management School at China University of Petroleum, said that monthly crude imports would continue to fluctuate for the rest of this year.

July's crude imports were 3.2 percent lower than the same period last year. Some analysts have expressed doubts that China's robust oil demand can be sustained in the second half of this year as the economy has showed signs of moderation.

But Dong said the country's crude imports will continue to see solid growth in the long term, as the nation needs more energy to fuel its growing economy.

Becoming a net oil importer 15 years ago, China's imports of the fuel have grown rapidly in recent years. The figure surpassed 100 million tons in 2004, up 35 percent from a year earlier.

In 2007 China imported nearly 200 million tons of oil, a more than 10 percent increase from 2006. At the time, imported oil accounted for 46 percent of the country's total consumption.

According to a report from the Chinese Academy of Social Sciences (CASS), 64.5 percent of China's oil consumption is likely to be met by imports in 2020, due to the gap in domestic consumption and production.

CASS statistics show that China's oil production is expected to be between 177 and 198 million tons in 2010, reaching 182 to 200 million tons by 2015.

Oil output is expected to gradually decline after 2020, according to CASS.

The nation's oil dependency reached alarming levels last year with imports accounting for 52 percent of total consumption, Customs figures showed. Imports of more than 50 percent are globally considered to indicate an energy security alert.

Analysts said China should further diversify its oil import sources for sustainable supplies. At present the Middle East, Africa and the Asia-Pacific are the three main regions that supply crude oil to the country.

China Daily