China’s crude oil demand rises as refineries ramp up production

At least three Chinese state-owned refineries and large private refineries are considering increasing production by up to 10% in October compared with September. Stronger demand is expected and fuel exports may increase in the fourth quarter.

Chinese refiners expect Beijing to release up to 15 million tons of oil product export quotas for the rest of the year to support oil refining.

Following the recent drop in Brent crude oil prices to below $100 per barrel, Chinese refiners have taken the opportunity to speculate in order to increase their inventories.

An official at the state-owned refinery said his operation was targeting a 10% increase to 240,000 barrels per day starting in September.

Another state-owned refiner said its facility plans to increase throughput by about 8% next month and expects to have a 60,000-barrel-per-day crude plant up and running next month after maintenance.

Zhejiang Petrochemical Corp, China’s largest oil refinery, can process 800,000 barrels of crude oil per day. Production capacity is expected to increase in the coming months from the current 700,000-750,000 barrels per day.

According to Chinese brokerage SHZQ Futures, the average refining rate at China’s state-owned refineries rose to 73.74% last week, up 2.56% from the end of August.

The operating rate of independent refineries in Shandong, whose total refining capacity accounts for one-fifth of China’s total refining capacity, also rebounded last week after falling for five weeks since mid-July.

Leave a Reply

Change Language
%d bloggers like this: