China Refinery Throughput Falls For First Time In 10 Years
Chinese refineries’ throughput fell for the first time in more than a decade during the first half of the year, by 6 percent to 13.4 million bpd.
In June alone, processing rates were higher than in May, but some 10 percent lower than the all-time high reached last year in June, Reuters said in a report citing official data.
Oil imports also fell in June, according to data from energy analytics firm OilX—by 1.6 million bpd to 9.2 million bpd.
On an annual basis, OilX analysts noted, the June average was about 1 million bpd lower than what China imported in crude oil in June 2021. They noted, however, that despite the recent series of lockdowns because of Covid flare-ups, China’s oil imports were remarkably stable over the past few months.
Chinese oil production rose during the first half of the year, by 4 percent from a year ago, with the daily average at 4.15 million bpd. In June, domestic output hit an all-time high of 4.18 million bpd.
Refinery runs have suffered from Covid restrictions since the start of the year as Beijing maintained its zero-Covid policy and by fuel export restrictions the government has imposed on refiners.
The Covid restrictions have also dampened domestic demand for fuels, but analysts expect a pick-up in refinery runs in the current quarter as the government considers making amendments to its Covid policy and steps up infrastructure spending to boost economic growth. Gasoline and jet fuel demand were the worst affected by the Covid restrictions.
According to an earlier Reuters report, Beijing plans to set up a $75-billion infrastructure spending fund to stimulate growth. China booked GDP growth of 0.4 percent for the second quarter of the year, far below analyst expectations because of the worst outbreak of Covid since 2020 in the country.
Oilprice.com by Charles Kennedy, July 27, 2022