China's crude oil supply in March lagged refinery throughput by an average 87,000 b/d, implying a net drawdown of crude oil inventory, according to Platts' analysis of recent data.

This is the fifth consecutive month that China has seen a drawdown in crude oil stocks, though the average volume is lower. The crude oil drawdown averaged 277,500 b/d in February and 99,300 b/d in January.

The relatively lower drawdown last month was largely due to lower crude runs in March compared with February.

Platts calculates China's net crude stock drawdown or build by subtracting refinery throughput from the country's crude oil supply, which takes into account net imports and domestic production of crude. The level of stocks held by refiners are not disclosed.

Refinery throughput last month had expanded by 5.5% year on year to 9.65 million b/d, according to data from the National Bureau of Statistics released April 15. But this was still lower than the 9.89 million b/d seen in February.

March crude oil imports dipped 2.1% year on year to an average 5.45 million b/d, according to data released April 10 by the General Administration of Customs. This was similar to crude oil imports in February that had stood at 5.44 million b/d.

Discounting crude oil exports of 64,000 b/d, March imports edged down 0.6% month on month to 5.39 million b/d.

Domestic crude oil output in March was 4.18 million b/d in March, down slightly from 4.19 million b/d in February, according to National Bureau of Statistics data.

LOWER CRUDE OIL IMPORTS LED TO DRAWDOWN IN Q1

In the first quarter of the year, China's average net crude oil drawdown by refineries was 151,000 b/d compared with a build of 211,000 b/d in Q1 2012, according to Platts' calculations, largely due to higher refinery throughput and lower crude oil imports.

The drawdown earlier this year matches data published by the Xinhua-published China Oil, Gas and Petrochemical newsletter, which reported that commercial crude oil inventories fell 1% month on month end January while end-February inventories fell a further 2.9% month on month. End-March stock data will be released next week.

In a research note on Friday, Bernstein Research estimated that China's commercial crude inventories as of the end of February could cover 18.8 days of forward oil demand, "which was below the historical range of the last three years."

China's crude oil imports have been relatively muted so far this year, with overall volumes in the first quarter falling 1.2% year on year to 5.62 million b/d. This is largely because of high stocks of oil products that refiners had started to build since late last year ahead of the Lunar New Year holiday in February. The start of seasonal refinery maintenance in March also reduced the need for crude oil feedstock.

In comparison, there had been a 10% year-on-year surge in crude oil imports in Q1 last year, some of which were used to fill a portion of China's second phase of building strategic petroleum reserves. Stockpiling of crude oil also picked up pace on the back of fears of supply shortages from Iran because of sanctions as well as pricing disputes between state-owned Sinopec's trading arm Unipec and National Iranian Oil Corp. over term contracts.

Overall refinery runs in the first quarter rose 5% year on year to 9.89 million b/d. The pace of growth was slightly higher compared with the 4% seen in Q1 last year.