Refiners and analysts said a record high of a volume of floating crude cargoes in Chinese waters has dampened Chinese refiners' buying interest in August-onward deliveries.
For 15 or more days in the week beginning June 29, there were 42.98 million barrels of crude on tankers idled in Chinese waters. The volume was 41.6 percent higher than the previous record of 30.36 million barrels set just the week before.
Over 15 days, the volume of cargoes in Chinese waters has been consistently setting fresh highs since May 18-24's 11.58 million barrels. Before 2020, the highest volume left afloat for more than 15 days in Chinese waters was 9.78 million barrels in the week beginning April 2, 2019.
China is more likely to keep destocking the cheap crudes in the coming months instead of buying more when the crude price is rising, a Hong Kong-based analyst said. More and more European and West African crudes, which had been China's favorites, have been fixed to head to Europe. Customs data showed crude imports by China jumped 19.2 percent on the year to an all-time high of 11.34 million b/d in May.
