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Market Chatter: China Taps Crude Oil Stockpiles as Imports Slump

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China is expected to dip deeper into its crude oil inventories, which are currently at record levels, as the country's refiners cut imports, while also curbing throughput to minimize refining losses, Reuters reported, citing analysts and industry officials.

The country's seaborne crude imports in May fell to their lowest in a decade, at 6.451 million barrels per day, from 8.1 million bpd in April, according to Kpler.

Vortexa, another ship-tracking firm, estimated May imports by sea at a much higher 7 million to 7.5 million bpd, while the country's overall crude imports, received by shipping and other means, slumped 20% year-over-year, to 9.3 million bpd.

To compensate for these lower imports, the country's refiners have been drawing from commercial inventories at the rate of 1 million bpd, with the stockpile having peaked at 1.25 billion barrels in early May, according to data from Vortexa and Kpler.

This comes amid widening losses for Chinese refiners, at 600 yuan ($88.69) to 1,300 yuan per metric ton of crude processed, amid the Chinese government's decision to cap retail fuel prices to shield consumers from global price spikes.

China's National Development and Reform Commission, or the NDRC, which oversees the country's fuel pricing mechanism, did not immediately respond to' request for a comment on this story.

(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)

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