Posted on 01/14/2016 7:05:05 AM PST by thackney
China’s oil demand is less than it seems, as the country sucks in more oil only to export it as refined products
Oil bulls continue to grimace at all the supply emanating from the Middle East and North America. They should spare a pained look for the continued weakness from the center of demand: China.
China said Wednesday that it wouldn’t adjust its local diesel or gasoline prices when crude oil fetches less than $40 a barrel. Beijing is afraid of too much consumption at cheap prices causing pollution. But at today’s $30 oil, that leaves the oil market fearful of how demand is suddenly capped at the world’s biggest marginal buyer of the commodity.
Trade figures also out Wednesday confirm another ill trend, this one mostly a matter of too much capacity. China keeps importing lots of crude oil, with total imports for 2015 rising 8.8%, barely less than 9.3% in 2014, according to data from CEIC.
Yet China’s refineries, which guzzle most of this crude, are turning around and exporting the final product. According to CEIC’s data, 2015 marked the first full year since 1994 that China likely exported more refined products such as diesel than it imported....
(Excerpt) Read more at wsj.com ...
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