SINGAPORE/BEIJING, June 14 (Reuters) – China has issued a third batch of 2023 crude oil import quotas, raising the total volume in the first half of this year to 194.1 million tonnes, up 20% from the same period last year, according to six people and documents on Wednesday. Thirty-three companies, mostly independent refiners, are receiving 62.28 million tonnes of allotments in this round, the six sources with knowledge of the matter said and documents reviewed by Reuters showed. That compares to 52.69 million tonnes issued by Beijing in June last year and a total released quota of 161.72 million tonnes over the first half of 2022. Zhejiang Petroleum & Chemical Co，a subsidiary of Rongsheng Petrochemical (002493.SZ), was granted 20.0 million tonnes in the new round of issuance. Hengli Petrochemical (600346.SS) and Shenghong Petrochemical received 3.0 million tonnes and 8.0 million tonnes, respectively. The rest of quotas were allotted to smaller-sized independent refiners, known as teapots, in the eastern Chinese province Shandong. Chinese independent refineries have been boosting imports of discounted crude oil essentially from Russia, Iran and Venezuela over the past months to improve refining margins amid lacklustre fuel and petrochemical demand in the country. Analysts estimate that refining margins at teapot refineries are more than double the level than at their state-backed counterparts. The flood of discounted feedstock prompted Chinese authorities to toughen scrutiny of crude oil quotas.
IEA warns markets could tighten significantly
The IEA in its latest report stated “that markets could tighten significantly in the near term as OPEC+ production cuts dampen the rebound in global oil supply.” however, forecasts improve over the 2024-28 period.
Global oil demand will grow by 2.4 million barrels per day (bpd) in 2023 to a record 102.3 million bpd, the IEA said in its monthly report on Wednesday.
At the same time, exploration and production investments are projected to reach their highest levels since 2015 in 2023. “Our projections assume major oil producers maintain their plans to build up capacity even as demand growth slows…the text added. “As always, there are a number of risks to our forecasts that could affect market balances over the medium term. Uncertain global economic conditions, the direction of OPEC+ decisions, and Beijing’s refining industry policy will play a crucial role in the balancing of crude oil and product markets.” NN: Oil is up $4.00 from its latest sucker plunge. As i documented this was a technical trade triple bottom. And fundamentally will be driven by record global oil consumption exceeding production. So i am going to sit back and enjoy the fun.