Crude oil processing in China reached a two-year high in September, as reported by the National Bureau of Statistics. Refineries processed 62.7 million tons of crude, equal to almost 15.3 million barrels per day, surpassing last year’s levels by nearly 1 million barrels per day. Oilchem noted a rise in refinery utilisation after maintenance work at several refineries.<\/p>\n
In the first nine months, crude oil processing totalled 550 million tons, averaging 14.75 million barrels per day. This reflects a 3.7% increase compared to the previous year, indicating a likely annual rise after a 3.6% decline last year. <\/p>\n
The article was written by FXStreet Insights Team, which compiles market insights from various experts, including commercial and internal analysts.<\/p>\n
The surge in China’s crude processing to a two-year high of 15.3 million barrels per day is a clear bullish signal for oil demand. This robust activity, coming from the world’s largest oil importer, suggests that underlying economic momentum in the region is stronger than many models have predicted. We see this as a primary indicator that global demand will remain firm into the final quarter of the year.<\/p>\n
This data is reinforced by recent U.S. inventory reports. The Energy Information Administration (EIA) last week reported a larger-than-expected draw of 2.8 million barrels from commercial crude stockpiles, bringing inventories to their lowest level in three months. This tightening supply in the West, coupled with surging demand in the East, has already helped push December WTI futures contracts firmly above $88 per barrel.<\/p>\n
Given these factors, we should consider positioning for further upside in oil prices over the next several weeks. Traders could look at buying call options with January 2026 expiry dates, targeting strike prices of $90 or $95 for WTI. This allows participation in a potential year-end rally while limiting downside risk.<\/p>\n
Looking back, we recall the market softness during the summer of 2025, when recessionary fears weighed on sentiment. However, this sustained demand from China is a powerful counterpoint, indicating industrial and transport fuel consumption is accelerating. This shift should provide a solid floor for prices, preventing a repeat of the volatility we saw earlier in the year.<\/p>\n
With OPEC+ signaling it will hold production levels steady through its next meeting, the supply side of the equation appears stable. Therefore, any price movement in the near term will be highly sensitive to demand-side news. This Chinese refinery data is the most significant demand signal we have received this quarter, suggesting a bullish bias is warranted.<\/p>\n
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