China’s crude oil imports in November hit 12.4 million barrels per day, the highest rate since August 2023. This amount exceeded domestic needs, with customs data showing total imports at 50.89 million tonnes. This was a 5% increase from last year and a 9% rise from the previous month. November’s import volume was the highest for a single month since August 2023. From January to November, total imports reached 522 million tonnes, marking a 3% increase compared to the same period last year. If December’s imports match last year’s figures, the total for the year could exceed the record from two years ago.

Stockpiling Efforts

Much of the increase in imports for November was aimed at stockpiling. Kpler estimated stockpiling at 21 million barrels, similar to the buildup in October. This estimate is based on data from crude oil processing, production, and imports. The National Statistics Office will release processing and production data next week. This analysis is part of the insights from the FXStreet Insights Team, based on expert reports and market observations. Given that China’s November crude oil imports reached 12.4 million barrels per day— the highest since August 2023— caution is warranted. A significant portion of these imports appears to be stockpiling, with estimates of a 21 million barrel increase. This suggests that the reported import numbers may not accurately reflect true demand. This stockpiling occurs as OPEC+ recently decided to maintain its production cuts of 2.2 million barrels per day through the first quarter of 2026, citing worries over a global economic slowdown. Recent reports from the World Bank have lowered global GDP growth forecasts for next year, increasing the likelihood of softer energy demand. Thus, China’s actions may be more about opportunistic buying during stable prices rather than a sign of strong economic growth.

Market Focus on Upcoming Data

The market is now awaiting next week’s processing and production data from China, which could confirm or refute the stockpiling trend. Last week, the unexpected increase of 1.8 million barrels in U.S. crude inventories capped prices, highlighting the market’s sensitivity to signs of weak consumption. If Chinese data indicates weak demand, it could undermine the support from OPEC+ cuts. For derivative traders, this suggests a potential rise in volatility in the coming weeks. Options strategies that benefit from significant price movements, like straddles on January Brent contracts, may be suitable before the Chinese data release. Traders who believe that stockpiling indicates underlying weakness may consider buying puts to hedge against a sharp price drop. We have seen this pattern before, especially during the post-pandemic recovery, when China used periods of low prices to build its strategic reserves. In 2023 and 2024, we observed that similarly high import figures were often followed by demand that did not meet expectations, leading to price corrections. Therefore, it’s wise to approach the current high import numbers with skepticism until clearer consumption data emerges. Create your live VT Markets account and start trading now.

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