China Crude Inventory Shrinking

The great oil glut of 2020 may have already peaked in the world’s biggest crude importer.
Crude inventories in China have shrunk in recent weeks after rising to record levels, according to analysts and satellite observations. Supplies have been drawn out of storage as refineries ramp up operations to meet rising demand from an economy emerging from lockdown.
Inventories drawing in the world’s biggest importer is an early sign that rebalancing may have begun in the global oil market after an epic collapse in demand, according to Morgan Stanley, Bloomberg reported. 
Stockpiles dwindled even as oil imports in April increased from the previous month, according to customs data.
“The combination of inventories falling and strong imports implies really solid refining activity,” said Geoffrey Craig, an analyst with Ursa Space Systems Inc., which uses synthetic aperture radar to track storage tank fills. 
“You saw them build aggressively in late February and into the end of March, and since then they’ve absolutely plateaued and have come off a bit.”
Refiners are drawing oil out of inventory to process into gasoline and diesel as traffic once again snarls China’s cities following the lockdown earlier this year to halt the spread of the coronavirus. 
Even as driving demand dries up in the rest of the world, rush hours from Beijing to Shenzhen at the end of last month are busier than they were in the same period last year.
Meanwhile subway ridership remained about 50% below pre-virus levels in Beijing and about 30% below in Shanghai, according to data compiled by Bloomberg.