Rory Johnston

So again, had to be made up somewhere.

So we're just kind of feeling around the shadows for the Occam's razor here is that they have been releasing silently additional crude inventories.

But above and beyond that, we know that crude refining run rates also fell dramatically by three to three and a half million barrels a day.

So where's the implied demand destruction?

Now, this is where we either get one of two things.

We either get a very large release of refined product stocks.

Now, we know that China has large stocks of refined products like gasoline, diesel, jet fuel, et cetera.

We have virtually no firm information on those stock levels or can track them very closely day to day or week to week because unlike crude, they don't have floating roofs.

So we have to kind of, again, infer.

Those stockpiles upwards of a billion barrels, but the implication is that they're drawing them down very, very, very rapidly.

That could, again, have a switch on the margin.

And then the other thing that you hear is that like, well, China has massive penetration of electric vehicles.

So maybe that was making part of it as well.

The challenge is that it's not the sales penetration, the sales composition that drives fuel demand.

It's the fleet composition.

And while new energy vehicles in China are like 60 plus percent of new vehicle sales, the overall stock of vehicles in China is still 10 to 1 internal combustion engines to EVs.

So the implication would have to be that Beijing had this massive fleet of EVs that are like waiting to roll off the line.

And that just doesn't seem plausible on the timeline we're talking about.

Yeah, so let's work in reverse there.

And I think, so back in 2023, I wrote a piece called Chinese Oil Demand Doubts, which was about how in 2023 with this massive growth in Chinese apparent demand, again, remember, China doesn't publish official demand stats.