with Agency Report
09 December 2017, Sweetcrude, Lagos — China has further strengthened trade ties with the United States after it boosted importation of shale oil to 289,000 barrels per day in November, according to data obtained from ClipperData.
While China keeps importing limited quantities of crude oil from the Organisation of the Petroleum Exporting Countries, OPEC members, including Nigeria, the country’s oil imports hit the second highest last month.
China imported a total of 9.01 million barrels per day last month.
Reports say the U.S. has been able to capture OPEC’s share because the group and its oil producers are limiting their output.
Another reason is that the U.S keeps discounting its crude at over $5 per barrel on the Brent-West Texas Intermediate spread.
China’s crude oil imports are up about 900, 000 barrels a day to an average of nearly 8.5 million barrels a day through November, according to figures from Energy Aspects.
Next year, the firm sees growth slowing but still expects China’s demand to increase to about 500, 000 barrels per day.
Nigeria’s crude oil flow into China is just one percent.
Brent futures were at $63.43 per barrel at 0744 GMT, down 26 cents, or 0.4 percent Friday. The decline follows Brent rising to an over two-year high of $64.65 earlier this week.
US West Texas Intermediate (WTI) crude was at $56.90 per barrel, down 30 cents, or 0.5 percent, from its last settlement. WTI also marked its highest in over two years earlier this week, at $57.69.
China’s October oil imports fell sharply from a near record-high of about 9 million barrels per day (bpd) in September to just 7.3 million bpd, data from the General Administration of Customs showed on Wednesday. That is the lowest level since October 2016, though imports were up 7.8 percent from a year ago.
For next year, however, independent refiners are likely to boost their imports again as authorities on Wednesday raised the 2018 crude oil import quota by 55 percent over 2017 to 2.85 million bpd, Li Yan, an oil analyst with Zibo Longzhong Information Group told CNBC.
Countries like Nigeria will also feel the pinch of China’s cut on OPEC, as the country plans to use bioethanol gasoline nationwide by 2020, the National Development and Reform Commission, and National Energy Administration, NEA said.
China is the world’s third-largest bioethanol producer and uses nearly 2.6 million tonnes a year. Gasoline blended with ethanol accounts for one-fifth of its annual gasoline consumption.
According to the plan, China aims to build an advanced liquid biofuel system and put into operation a demonstration facility that will be able to produce 50,000 tonnes of cellulosic ethanol per annum by 2020.
China launched corn-to-ethanol pilot programmes in 2004 as part of efforts to cut emissions and advance new energy.
China banned the use of grain for ethanol production in 2007 to ensure sufficient food supply, and biofuel manufacturers have since turned to sweet potatoes, sorghum and straw stalks instead.
In August, India’s Hindustan Petroleum Corporation said it was considering dumping Nigeria’s sweet crude for that of the U.S.
This is coming less than three years after the U.S. stopped importing Nigeria’s oil. After the US stopped the purchase of Nigeria’s oil under former President Barack Obama, Nigeria turned to Asia, particularly India and China for oil sale.
India is the biggest buyer of Nigeria’s crude oil, importing as much as 745,000 barrels in May 2015. In 2015-16, India imported nearly 23.7 MMT of crude (nearly 12% of India’s overall imports) and over 2 MMTPA of LNG from Nigeria, according to Nigerian National Petroleum Corporation (NNPC).