Part of the crude Oil imports in recent months has also gone into stockpiling, Commerzbank's commodity analyst Carsten Fritsch notes.

China absorbs excess supply in the Oil market

"The chief strategist of a large commodity trading house expects China's reserve purchases to continue at an unchanged pace over the next year. He spoke of stockpiling of almost 1 million barrels per day since March."

"Based on available data from China on crude Oil imports, crude Oil production, and processing, the implied stockpiling between March and July even amounts to an average of 1.4 million barrels per day. China has thus played a significant role in absorbing the oversupply in the Oil market. This role is likely to continue in the coming months, which could prevent a sharper decline in Oil prices."