“Teapot” refineries… WSJ

The Wall Street Journal has a nice discussion on  “teapot” refineries in China here:

http://www.wsj.com/articles/teapot-refineries-shore-up-chinas-demand-for-crude-1464616123

“Already, the teapots are helping keep demand for oil high in the world’s second biggest crude-importing country, in turn supporting global oil prices. Last month, teapots imported 1.2 million barrels of oil a day, Energy Aspects estimates, around 15% of China’s total crude imports. Oil prices last week rose over $50 a barrel for the first time in six months.”

And this:

“For sure, analysts expect teapots to retain Beijing’s backing. While some have operated for around 30 years, their current prominence is partly the result of politics: Chinese President Xi Jinping has targeted major state-owned Chinese oil companies, purging their top leaders amid a crackdown on corruption.

“The [government]…sees competition from teapots as a way to impose discipline on the major national oil companies,” analysts at the Oxford Institute of Energy Studies said in a report.”

One takeaway is that trying to determine China’s oil demand will be even harder now as more crude run through teapots could be consumed domestically, exported as oil products (gasoline, diesel, etc.) or stored…