Crude oil refining in China fell to the lowest in three months in September as more refineries closed for regular seasonal maintenance. Even so, oil prices will likely suffer a negative impact from the news, as it also revealed refining since the start of the year was down 1.6%.
Chinese refineries processed 58.73 million tons of crude oil last month, Bloomberg reported, adding that refiners are in a challenging situation with regard to gasoline demand because of the growing electrification of China’s transport system. In addition to this, demand for diesel from heavy-duty vehicles is on a dip as well, as Beijing subsidizes a shift to LNG-powered trucks.
In coal, however, China has boosted both domestic production and imports, with the latter hitting an all-time high in September, data showed earlier this week. The monthly total stood at 47.59 million tons, which was 13% higher on a year earlier amid a growing share for coal in China’s electricity generation.
In oil, however, imports dipped amid weaker refining activity. These stood at 45.5 million tons last month, down 7.4% on the previous month and representing an average daily rate of 11.1 million barrels.
“We expect Chinese crude imports to hold around 11 million barrels a day through the fourth quarter,” Energy aspects analyst Jianan Sun said, as quoted by Bloomberg. The publication said that a poll of industry insiders has suggested China’s oil demand is set to grow by a modest 300,000 barrels daily this year.
The prediction is in tune with the International Energy Agency’s, as detailed in the agency’s latest oil market report. In it, the IEA said it expected China’s contribution to global oil demand growth this year to decline from as much as 70% in the past two years to just 20%. That total, by the way, is seen at some 900,000 bpd, versus annual growth rates of over 2 million bpd for 2022 and 2023.
By Irina Slav for Oilprice.com
