Crude imports reached record in Jan

Updated: 2007-02-13 13:55

China imported a near-record average of 3.22 million barrels of crude oil per day in January, taking advantage of a 19-month low in global oil prices and stocking up for an expected spike in demand during the Lunar New Year holiday.

The 3.5 percent rise in imports from January 2006 underlines China's growing importance to world markets, which now provide nearly half the country's crude and where China trails only Japan and the United States as a buyer.

China's effort to build up its national strategic oil reserves may also have increased shipments and helped support resurgent prices.

China imported 13.69 million tons of crude oil in January, the General Administration of Customs said. It was a record monthly total but less on a daily basis than November's 3.29 million barrels a day.

Global oil prices tumbled at the start of the year after a warm spell, at one point dipping briefly below $50 per barrel for the first time since May 2005. Prices have since rebounded since to nearly $60 per barrel.

Chinese temperatures were above normal for the beginning of the year, which curbed heating demand. But demand at home was bolstered by refiners stockpiling in preparation for the Lunar New Year, the country's most important celebration.

Business and industry largely grind to a halt for the festival, but tens of millions of people take to the roads and railways to return home for large family dinners, pushing up consumption of transport and cooking fuel. Refiners are under government orders to keep the market well-supplied.

"We thought the rise was connected to the fall in crude prices," said Wu Jun, an analyst at Cifco, a futures firm in Beijing. "Also in January people are stocking up," he said. "Importers prefer not to have boats arriving over Spring Festival as it tends to be more expensive and complicated."

Lower prices and cuts in import tariffs have encouraged a pickup in the flow of fuel into China, despite a mid-January cut in the state-set price of gasoline.

Beijing left prices for the much larger diesel market unchanged, however, as global price falls helped protect the bottom lines of refiners who have endured years of losses.

Net imports of refined oil products, excluding liquefied petroleum gas, soared 88 percent from the previous month to 1.84 million tons and were up a 10 percent from the previous year.

OPEC sees stable market

OPEC may have no need to cut or raise output when it meets in a month's time because the world oil market is in "much, much better health," The Wall Street Journal quoted the Saudi oil minister as saying, Reuters reported from Singapore.

"Most probably, if the trend is like what it is like today, with the market getting in much, much better health and balance, there may not be any reason to change," Ali al-Naimi told the paper in an interview in Riyadh on Sunday.

Naimi, in his first direct comments on the condition of the market since prices rebounded to nearly $60 a barrel from a 20-month low of under $50 in mid-January, also said the kingdom was producing about 8.5 million to 8.6 million barrels per day, confirming a cut of about a million barrels per day from six months ago, the paper reported.

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