BEIJING: China’s imports of crude oil rose 5.1% in the first two months of 2024 from a year earlier, data showed on Thursday, as refiners ramped up purchases to meet fuel sales during the Lunar New Year holiday.

Imports during January and February amounted to 88.31 million metric tons, or about 10.74 million barrels per day (bpd), according to the General Administration of Customs.

That compared to 10.4 million bpd in the corresponding period last year.

China releases combined import data for January and February to smooth out the impact of the week-long Lunar New Year holiday that typically falls at the start of the year.

Demand for gasoline and aviation fuel spiked in late January through much of February as tens of millions of people travelled at home and abroad for the holiday break.

“China is expected to release more demand momentum in the later months of the year, with stronger diesel demand to materialise out of winter and stronger gasoline and jet fuel demand in the holidays and summer travel season,” said Lin Ye, a Beijing-based analyst at consultancy Rystad Energy.

To meet higher fuel demand, state-run refiners maintained stable or slightly higher operations during these two months versus December, industry sources said.

Oil prices edge higher after US stocks build less than expected

Independent refiners, however, cut throughput, especially in February, amid thinning margins.

Chinese commodities consultancy JLC estimated independent plants in the refining hub of Shandong province ran crude units at an average of 58.27% of capacity in February, down 4.91 percentage points from January and down 9.6 percentage points from a year earlier.

In its annual industry outlook briefing last week, state energy group CNPC forecast China’s crude oil imports this year to stay largely flat, up only 0.1% to about 11.3 million bpd.

That may suggest China’s only greenfield refinery under construction, the 400,000-bpd Yulong Petrochemical complex, could enter production only towards late 2024, as earlier predicted.

Customs data also showed exports of refined oil products, which included diesel, gasoline, aviation fuel and marine fuel, were down 30.6% from a year earlier, at 8.82 million tons.

“Chinese refineries need to export their products more cautiously with the quota allocated, which means export margins matter more,” said Rystad’s Ye.

“We expect gasoline and diesel exports to have increased from February and are likely to further expand in March.”

Natural gas imports for January-February, including piped gas and liquefied natural gas (LNG), jumped 23.6% from a year earlier to 22.10 million tons, the data showed.

That was the highest year to date total on record, Reuters records showed.

LSEG tanker tracking assessment showed about 13.7 million tons of LNG was delivered to Chinese ports during the first two months of 2024, up from the figure of 11.12 million tons a year earlier.

Lower spot LNG prices may have spurred Chinese firms to bring more shipments under long-term contracts to the domestic market and also step up some sporadic spot buying, traders said.