Crude imports drop to 5-month low

The mainland's crude oil imports fell to a five-month low last month, official data showed, dropping to less than 6 million barrels per day (bpd) after three months of high imports and gains in fuel product inventories.

Crude imports rose 2 per cent year on year last month as state-owned oil firms started up larger term contracts with suppliers such as Iraq and Russia to feed new refineries that came online in January.

The world's top energy consumer took in 23.52 million tonnes, or 5.54 million bpd, of oil last month, down 7.8 per cent on a daily basis from 6.01 million bpd in February, the General Administration of Customs said.

Crude imports had held at more than 6 million bpd between December and February, hitting a record 6.63 million bpd in January. But oil product inventories surged over the same period, indicating softer real demand.

"Despite a recovery in implied demand in February, product demand in China was softer than expected as inventories built," Barclays analyst Sijin Cheng wrote in a report last week.

Mainland exports unexpectedly fell for the second straight month in March and overall import growth dropped sharply, intensifying concerns about weak manufacturing and slowing growth in the world's second-largest economy.

"We are seeing a further pull-back in oil because China's trade numbers fell short of expectations," said Ben Le Brun, a markets analyst at OptionsXpress in Sydney. "Overall, crude import numbers seem healthy and it shows that oil demand is still there, but oil is just one side of the story."

In the first quarter of this year, crude imports rose 8.3 per cent year on year to 74.72 million tonnes, or 6.06 million bpd, the customs data showed.

Petrol stocks surged 10.4 per cent from the end of January to the end of February, while diesel stocks jumped 20.5 per cent as demand fell, Xinhua reported.

Higher oil prices last month, with Brent crude futures hitting a two-month high of more than US$112 a barrel on the escalating tensions between Russia and Ukraine, also curbed buyers' appetite.

China's crude intake last month was the lowest since October, when imports dropped to a 13-month low of 4.81 million bpd.