China’s refinery throughput reportedly reached a record 41.61mmt, or 10.1mmb/d, in November according to sources citing China’s National Bureau of Statistics. Under the refinery side methodology (refinery throughput plus net product imports), that would imply demand of 10.4mmb/d which would mark an all-time high. Also, according to preliminary customs data published yesterday, crude oil imports for November reached 5.6mmb/d (+0.1mmb/d, +2% MoM), the highest in six months. Assuming flat MoM domestic crude oil production, China’s implied demand for oil under the crude side methodology (domestic production plus net crude and product imports) would have reached 10.2mmb/d, which would also make it the highest in six months.
Meanwhile, last Friday the US deemed India, Malaysia, Republic of Korea, South Africa, Sri Lanka, Turkey, Taiwan, Singapore and, notably, China, to have qualified for exceptions to sanctions on the basis of reduced volumes of crude oil purchases from Iran. As a result, the US has now effectively exempted all major importers of Iranian crude, extending the emasculation of the potential direct impact of US sanctions enacted last December, in our view. We note that the US chose to grant exceptions to Singapore and China weeks ahead of the 25 December expiry of their previous exception, while Chinese imports of Iranian crude have picked up since their August low.
Managed Money net positions were up in the week to 4 December. In the US, the CFTC reported US Managed Money net longs in futures and options (F&O) in WTI sharply up 13,434 positions (+11.6%) WoW to close at 129,530 positions. In Europe, the ICE reported Managed Money net longs in F&O in Brent up 3,477 positions (+3.2%) to 111,589 positions, a seven week high. Brent was flat WoW at USD 109.84/bbl while WTI closed 1.5% up WoW USD 88.50/bbl.
OPEC and the EIA publish their monthly reports on oil markets today, while OPEC members hold their ordinary meeting in Vienna tomorrow.