China's crude Oil processing weak in April – Commerzbank

China's refineries appear to have used the recent low Oil prices primarily to increase their inventories, Commerzbank's commodity analyst Carsten Fritsch notes.

Second largest Oil consumption market remains a concern

"This is because the still high crude Oil imports in April were accompanied by rather weak crude Oil processing: It fell last month to 58 million tons or 14.1 million barrels per day, which was significantly below the March level and also 1.4% below the previous year's level."

"According to the Chinese consulting firm Sublime China, refinery capacity utilisation was at its lowest level since 2022 at just under 74%. Taking into account domestic Oil production, which was still 1.5% higher than the previous year, crude Oil inventories increased by just under 2 million barrels per day in April."

"Adjusted for net exports of refined products, which have now also been reported, China's apparent Oil demand in the same month was a good 5.5% below the previous year, according to Bloomberg calculations. This means that the second largest Oil consumption market remains a concern."