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The big fill – China’s oil inventories to record largest six-month increase ever
China’s crude oil inventories will increase by 440mn barrels over the first six months of 2020, according to the latest analysis by IHS Markit. This ‘big fill’ dwarfs the largest ever six-month increase in US crude stocks to date which was during late 2014 and early 2015 when stocks increased 111mn barrels – just 25% the size of the inventory build currently underway in China.
The peak of China’s stockbuild, on a daily average basis, was 4.8mn b/d in February 2020, when Chinese oil demand was at a low point, reports the market analyst. The size of China’s inventory build has been a source of support for an otherwise exceptionally weak crude oil market which has faced record-level falls in crude demand and, briefly in April, negative oil prices due to the impact of COVID-19.
‘The world has never seen an increase of this magnitude in such a short period of time. Crude oil in storage has increased around the world as demand has fallen this year. But no geography – not even floating storage – matches the scale of China’s inventory increase,’ comments Jim Burkhard, Vice President and Head of Oil Markets, IHS Markit.