Seen from space, China’s oil demand looks strong

Bloomberg

The crude market may be underestimating China’s oil demand. Storage data gathered by satellite implies the amount of crude China is putting into storage is below what can be extrapolated from the nation’s customs and production data, Barclays Plc analysts wrote in a note. That means it may be consuming more oil than official data indicate and that the global supply-demand balance is tighter than estimated.
“If satellite data are accurate and reflective of broader activity in the Chinese oil sector, this is bullish for oil fundamentals,” analysts Michael Cohen and Warren Russell wrote in the report. “It implies that China’s refinery runs and end-use consumption may be understated, and that global balances are tighter than consensus and our own forecasts.”
Data from Ursa Space Systems Inc. implies inventories in the world’s largest importer expanded by about 360,000 barrels a day from April through August, equating to a year-to-date stockpile build of 87mn barrels, said the note.