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OECD
According to preliminary estimated data, OECD crude oil imports remained steady in August compared to the previous month. Despite the decline in crude oil imports in the US, Japan, and South Korea due to the backwardation circumstances as well as refinery glitches, Europe’s crude oil imports increased due to a rise in refinery throughput to take advantage of the high prices. Europe’s increase in crude oil imports offset the decline in other regions and OECD crude oil imports closed the month of August steady with the previous month. On an annual basis, OECD crude oil imports indicated a y-o-y decline of more than 5%. OECD product imports experienced a minor increase in August of less than 1% from a month earlier. The increase in fuel oil imports in Japan to cover thermal power generation requirements after the earthquake, supported OECD product imports in addition to increased Europe’s product imports such as jet and gasoil. However, the decline of US product imports, on the back of closed gasoline arbitrage, undermining any gains in OECD product imports. Despite the minor increase in August, OECD product imports indicated an annual drop of more than 7%.
Total OECD oil exports edged up by 10,000 b/d driven mainly due to the rise in product exports which showed an increase of less than 2% in August compared to the previous month. On the other hand, crude oil imports declined in August by 2% from a month earlier. Compared to same month last year, crude oil and product exports indicated a decline of 7% and 6%, respectively. Hence, OECD net oil imports remained steady with a minor increase registered compared to the previous month. The slight increase came only from net crude oil imports which increased as a result of the decline in exports. OECD net oil imports experienced an annual decline of around 6% in August.
In terms of crude oil suppliers, Saudi Arabia and Russia came on top in August with more than 26% for both. Canada, Mexico and Norway came next with around 6% each. On the product side, Russia and the Netherlands were first with a combined 19%.
USA
US crude oil imports decreased in September by 1.4% compared to the previous month to mark the lowest level since March, according to preliminary data. The decline in US crude oil imports was noticeable in the first half of the month on the back of weather-related issues. In the first half of the month, crude oil stocks fell in line with the decline in imports before increasing in the second half as imports rose and refinery throughput decreased.
Similarly, product imports declined in the US, according to preliminary data, by around 3% to reach the second-lowest level after February so far this year. The drop in US product imports consisted mainly of gasoline, distillates, and kerosene. US gasoline imports in September are estimated to be around 7% lower than in August. However, the drop in demand offset the decrease in imports which resulted in a steady level of stocks at the end of September compared to a month earlier. Similarly, kerosene imports showed a decline of around 18% in September compared to the previous month, with stocks declining accordingly. Demand for distillates also declined in September which was in line with the drop in imports, although stocks showed an increase attributable to the rise in production in preparation for the winter season. Fuel oil imports increased in September compared to August while demand decreased; as a result, stocks increased at the end of September according to preliminary data. However, the increase in fuel oil imports was not enough to offset the decline in imports of other products. On an annual basis, US product imports indicated a y-o-y decrease of around 2%.
On the export side, total US exports remained relatively steady in September compared to the previous month with a 25% annual decline. Accordingly, US net oil imports declined in September by around 2% driven by a 1.4% decline in net crude oil imports and a 4% loss in net product imports. On an annual basis, US net oil imports showed a decrease of around 3% in September.
Canada with 18% and Mexico 15% were the main suppliers of US crude oil in July. Saudi Arabia came next with 14% followed by Venezuela with 12%. Nigeria and Algeria followed with 9% and 5%, respectively. OPEC Member Countries supplied around 53% of the US crude oil. On the product side, Canada was the top supplier to the US with 15% followed by Russia with 11%. It is worth to highlight that Russia’s share of US product imports increased in July by around 5%. The Virgin Islands came third with around 10%.
Japan
According to preliminary estimates, Japan’s crude oil imports decreased in September from the previous month. The drop of around 3% occurred despite the extra volume required for power generation after the shut-down of a nuclear facility following the earthquake. However, refinery maintenance planned over the coming period influenced Japan’s crude oil imports. Compared to the same period last year, Japan’s crude oil imports indicated growth of around 5%.
On the product side, Japan’s product imports remained steady in September compared to a month earlier. A minor increase experienced in product imports amounted to around 5%. During the first nine months of this year, Japan imported around 15% less products compared to the same period last year. However, September product imports indicated an annual increase of around 4%. On the export side, Japan exported slightly more products in September compared to the previous month. Japan exported more gasoline, jet and fuel oil in September, while exports of gasoil declined slightly.
Accordingly, Japan’s total net oil imports declined more than 3% in September from the previous month. Net imports of both crude oil and products drove the decline with net product imports indicating a monthly fall of around 70%. However, Japan’s net oil imports showed an annual increase of more than 5% in September.
For the sources of imports, Saudi Arabia and the UAE shared the top spot with around 24% each, supplying around 50% of Japan’s crude oil in August. Iran, Qatar and Kuwait followed with 8-12% each. OPEC Member Countries supplied around 84% of Japan’s crude oil in August. Both the UAE and Saudi Arabia remained Japan’s top product suppliers with 17% and 13% respectively. Qatar followed at the third place with 11%, and Kuwait came next with 10%.
China
In August, China’s crude oil imports and declined breaking the increase of the previous two months. The reduced demand from domestic state-owned refineries during the peak of the turnaround season contributed strongly to the drop in crude oil imports. Additionally, high international prices contributed to the decline in China’s crude oil imports, which fell more than 5% in August compared to the previous month. However, on an annual basis, China’s crude oil imports experienced an increase of around 19%.
Similarly, China’s product imports dropped in August compared to the previous month. Despite the small increase in gasoline, gasoil, and naphtha imports, the sharp decline in fuel oil imports created negative product imports for August with a decrease of around 32% compared to the previous month. Jet fuel imports remained steady in August with continuing high demand in the peak traveling season. China’s naphtha imports increased in August on the back of strong domestic demand. Similarly, gasoil demand driven by the agricultural sector supported the increase in imports in August, with Japan as the top source for China’s gasoil imports. Fuel oil imports, which in July had an 83% share of China’s total product imports, declined significantly in August, by more than 40%, mainly on the back of high international prices. However, the drop in China’s fuel oil imports in August — with South Korea as the top supplier — led to stock-draws in various areas. On an annual basis, China’s product imports indicated a y-o-y decline of more than 30% which is an indicator of growth in China’s refining sector.
On the export side, China’s crude oil exports surged more than 300% in August from the previous month; the high percentage is attributed to the small volume exported in July. China’s total crude oil exports reached 70,000 b/d in August where improved weather conditions allowed crude oil production to increase supporting export volume. On the product side, China exported 20% more in August than in the previous month. Exports of jet fuel increased in August on the back of higher production as well as exports of naphtha with the majority done through third-party processing agreements. Gasoil exports remained steady in August on the back of strong local demand, while exports of fuel oil slightly increased on the back of higher international prices as well as increased production supported by heavy crude oil runs as well as a weak bitumen market. China’s gasoline exports declined in August compared to the previous month and production fell mainly due to higher output of gasoil and fuel oil.
As a result, China’s net crude oil imports decreased by around 7% in August compared to the previous month. Net product imports also declined yet at a much higher level of more than 53% due to the increase in exports and the decrease in imports as described above. Net imports of both crude oil and products led to a drop of China’s total net oil imports of around 15% in August compared to the previous moth. On an annual basis, China’s net oil imports indicated an increase of 6% in August driven by crude oil imports.
Saudi Arabia maintained its position as China’s main crude oil supplier in August with 18%, up from 11% in the previous month. Angola came next with 13% followed by Iran and Russia with 11% and 8% respectively. Oman’s share in China’s crude oil imports declined in August to 7% from 10% in the previous month. OPEC Member Countries supplied around 60% of China’s crude oil in August.
India
India’s total oil imports were 2.8 mb/d in August, according to preliminary data, around 5% less than total imports in July. Crude oil imports declined in India by around 5.5% in August compared to the previous month, mainly on the back of refinery shutdowns and slightly lower domestic sales. August product imports remained steady in India compared to the previous month. Imports of naphtha and fuel oil increased offsetting the decrease in diesel and kerosene imports in August. The decline in diesel imports in August came in line with the drop of domestic sales on the back of floods and heavy rains which curbed consumption.
Imports of naphtha increased as well in August due to higher domestic sales as a result of some petrochemical and fertilizer plants shifting back to naphtha from natural gas due to economical reasons. On an annual basis, India’s crude oil imports indicated a y-o-y growth of 10% while product imports experienced a y-o-y decline of 6%.
In August, India exported around 6% less products compared to the previous month. While diesel exports increased in August due to the decline in domestic sales and gasoline outflows were also higher compared to the previous month, naphtha and fuel oil exports fell on the back of local demand. On an annual basis, India’s August product exports indicated a y-o-y growth of around 8% despite the monthly decline. One of the main reasons for the annual increase in export is that many private refiners prefer to export their products to international markets to take advantage of high prices as well as the lack of a compensation mechanism by means of which the government would reimburse private refiners for local prices.
Accordingly, India’s net oil imports declined in August by around 4% compared to the previous month. Net imports of both crude oil and products drove the decline in net oil imports with the net product imports decreasing 11% while net crude oil imports fell 5.5%. However, on an annual basis, India’s net oil imports in August showed growth of around 7% supported by net imports of both products and crude oil.
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