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* Oil traders hunt for smarter ways to assess demand, supplyin China
* More boots on the ground for the trading edge
* Lack of data on China's crude stocks, refinery operations
By Manash Goswami
SINGAPORE, Nov 1 (Reuters) - What do the Chinese cities ofQingdao, Ningbo and Dalian have in common and what's thequickest way of getting from one to the other?
If you are an oil investor or trader and haven't figured itout yet, you may be giving your competitors a head start.
China's rising fuel demand saw it overtake the United Statesas the world's top net oil importer last month. As China'simportance for global oil markets grows, traders looking for anedge are hunting for smarter ways to assess demand and supply ina country that publishes relatively little energy sector data.
One way may just be to make frequent trips to count tankerarrivals in these three cities - which are home to China's topthree crude import terminals.
A diesel trader may have to count vessels in Zhanjiang,Kunming and Guangzhou ports, which ship in most of the fuel thatruns trains, trucks and power generators.
The problem for global oil investors is that China gives nodetailed data on refinery operations or commercial stockpiles ofcrude and oil products.
For decades, these traders have had access to all the datathey needed on the oil market in the United States, the world'sbiggest consumer of oil and the biggest importer until it wasovertaken by China. Every Wednesday, the U.S. Department ofEnergy announces crude imports, commercial stockpiles andrefinery utilisation rates, often setting off movement on crudeand products futures markets.
"With China, you just don't know," said Adi Imsirovic,general manager at Clearsource Trading London, which sells oilto China and Asia. "There is no reliable data on stockpiles,refinery operations - with China it is a black hole."
Companies and trading houses that sell crude to China'slicensed importing agencies include Trafigura, Glencore, Vitol S.A., Total and BP Plc.
The more savvy among those trading China oil already monitortanker arrivals in the country by tracking satellite images andcounting the number of vessels enroute to its top three or otherports. The satellite data provides the vessel's draft, whichgives a sense if it is fully or partially loaded.
It also often provides information on where the ship hasloaded from and which is its port of discharge.
If that fails, information may simply come from sources inthe port.
"There is no real alternative to having as many people aspossible on the ground," said a top executive from a majorenergy trading desk. "We have people in big cities and we willbe looking to hire more."
LACK OF QUALITY DATA
China publishes monthly customs data on crude imports, butit does not give details on stockpiles, making it difficult toassess real demand.
It also gives out monthly oil product export and importnumbers, but similarly there are no figures on stocks, whichmakes estimating actual demand an inexact science.
Knowledge like this is essential to trade in the market andset prices. Many investors may be reluctant to trade on whatthey can glean from the partial data that does exist.
And then there is the quality of the data itself. For years,economists have questioned China's macroeconomic data, includingGDP and trade figures, and whether they accurately tell the fullstory.
The biggest vacuum for oil traders is data on China's crudestocks and refinery operations.
Unlike in the United States, China has no regulatory filingfor its refining industry on outages, shutdowns or maintenance.The sector is dominated by China's state-owned energy giants.
Apart from these behemoth facilities, the country also hasscores of smaller, independent refineries, called teapots,scattered all across the country. Though small, they can play akey role supplying fuels such as diesel to landlocked regions,especially during peak season.
Data on these is even harder to procure.
AN EDGE IN THE MARKETPLACE
This dearth of energy sector data from China can put therest of the market at a disadvantage when it deals with Chinesetrading houses, which are increasingly playing a major role.
Without reliable information on Chinese consumption andinventories, other trading houses struggle to gauge whetherChinese traders are buying to ship fuel home or for trading,which can affect prices.
For example, Unipec, the trading arm of Chinese staterefiner Sinopec , usually buys crude forrefineries in China.
But last month, it sold a consignment of North Sea Fortiescrude to Thai Oil, a major surprise for the market. Atanker carrying the crude from the Hound Point terminal inScotland to Yangpu in China is to discharge the cargo inThailand.
"They have such a large system, it gives them a lot offlexibility to play around," said Imsirovic from ClearsourceTrading. "You can never tell what's going to go in to China andwhat will be sold en route. It puts the rest of us at a hugedisadvantage."
LONG EXPECTED
China becoming the world's top oil importer has been a longtime coming and many oil trading firms have positioned well forits growing influence on global markets.
Some have hired staff to gather on-the-ground intelligence,tapped local consultancies for information and monitored proxydemand data such as power output.
"They are not operating blind," said Harry Tchilinguirian,global head for commodity markets strategy at BNP Paribas. "Thistrade shift just continues an already existing phenomenon. Asthe balance shifts eastwards, these are issues the industry hasbeen aware of."
But the oil trading community expects China to open upeventually as its influence on global markets increases just asthe relevance of weekly stocks and refinery operations data fromthe United States diminishes.
"If you don't share data, you have volatility and that isnot a good thing for a big buyer like China," said RichardGorry, managing director for JBC Asia. "Once China understandsthis, they will open up."
