New Quotas Mean Crude Oil Imports will Fall

Based on the analysis of non-state crude import quotas, we estimate that crude oil imports by the non-stateowned sector could decline by 640,000 b/d from 3.4 million b/d in January-June to 2.7 million b/d in the second half of the year. This analysis also suggests that Hengli Petchem will reach high utilization rates in the next few months, while Zhejiang Petchem will not be commercial this year. Overall, this means total crude oil imports should average about 9.3 million b/d for the rest of 2019, having a significant impact on crude oil demand.

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G20 and OPEC Meetings Deliver

As predicted in our Global Crude Oil Outlook last week, both the G20 and OPEC meetings delivered results that are pertinent to the global oil balance. We expect crude oil prices to rise in 2019 as the global balance moves into deficit. The outlook for 2020 is not as rosy. The extension of the OPEC deal by 9 months is helpful, but the difficulties will really come later in 2020.

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