China’s commercial oil stockpiling sector, which emerged as a key swing buyer of crude as prices plunged earlier this year, is setting plans to grow again in 2021, supporting a further boost in imports.
Private tank farm operators, refiners and traders pumped an extra 310-600 million barrels of oil into storage in China this year, according to a survey of five analysts, more than a month’s usage in the world’s second-largest oil consumer.
The buying helped prop up global oil markets as the coronavirus slashed demand, and delivered big profits for operators, traders and refiners who were able to stock up cheaply. While oil prices have partly recovered, they remain below historical levels.
Private refiners and storage operators will put about another 100 million barrels of new tanks to use in 2021, according to interviews with six top storage operators and data from company and Chinese media reports.
With Chinese demand a key factor for crude markets -- along with output curbs by major producers and how quickly global fuel demand can recover from the pandemic -- more storage can potentially boost flows into the country.