Stockpile of crude hits high point

China's stockpiles of crude for commercial use rose to the highest level in at least 31 months in July, while diesel inventories shrank to their lowest this year, according to data from Xinhua News Agency.

Supplies of crude, excluding emergency reserves, climbed 3.1 percent at the end of July compared with June for a fifth monthly gain, according to Xinhua's China Oil, Gas & Petrochemicals newsletter on Monday.

That puts inventories at 32.28 million metric tons, the most since January 2010, when Bloomberg started compiling the data. Diesel stockpiles fell 8.1 percent to 9.29 million tons, the least since December, the data showed.

China's crude production rose 3.2 percent to 17.03 million tons in July, government data show. The country, the second-biggest oil consumer after the United States, cut fuel prices in the month to the lowest level since December 2010 after global crude costs dropped.

The daily demand for oil product increased 1.2 percent from June and 6 percent compared with the average in the first half of the year, the National Development and Reform Commission, China's top economic planning agency, said on Monday.

Gasoline inventories fell 1.8 percent and kerosene dropped 9 percent, according to the newsletter. It has published the monthly percentage changes for stockpiles since July 2010, when it stopped reporting volumes.

The country's crude oil production in the period from January to July reached 117.35 million tons, down 1.3 percent year-on-year.

Its crude oil imports increased 10.2 percent to 161.9 million tons in the first seven months, according to customs data, underlying the country's increasing dependence on imports to meet its domestic demand, according to the NDRC.

A fuel price cut on July 11 boosted sales of oil products and helped draw down fuel inventories.

To trim high domestic fuel inventories, the top Asian refinery Sinopec cut its crude throughput by more than 243,000 barrels per day in June from an earlier output target, and cut throughput by some 236,000 bpd below its target in July, industry sources have said.

Imports have been curbed in the last couple of months as refineries sank deeper into the red, processing pricey crude oil bought earlier at a higher cost and forced to sell at State-set pump rates that were reduced three times between May and July.

Meanwhile, China's natural gas imports increased 28.2 percent year-on-year to 3.5 billion cubic meters in July, the commission said.

Natural gas imports rose 38.6 percent to 23.3 billion cubic meters in the first seven months of this year, it added.

Bloomberg News