China cut crude oil processing volume in August an

2022-08-21
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China cut crude oil processing in August; September may hold steady

China's crude oil processing volume in August is expected to fall from the record high set last month, due to the continuous growth of oil inventories in state-owned refineries

however, analysts predict that the processing volume in August will be the recent low, because the domestic fuel demand in September will drive the processing volume higher

Dow Jones newswires calculated according to the data provided by China's energy information portal jcache, the average operating rate of China's largest 16 refineries will be reduced to 88.6% this month from 90.4% in July

the largest decline in operating rate is Sinopec Shanghai Petrochemical Co., Ltd. (hereinafter referred to as s Shanghai Petrochemical). As China's fourth largest refinery by refining capacity, s Shanghai Petrochemical plans to shut down and overhaul an atmospheric and vacuum distillation unit that processes 50210 barrels of crude oil a day and a catalytic unit that processes 20100 barrels a day

the decline in crude oil processing volume is also a reflection of the decision of the national development and Reform Commission (NDRC) to lower the domestic gasoline and diesel prices by 220 yuan per ton at the end of July

as China's largest oil refiner, China Petroleum Chemical Corp. (SNP, referred to as Sinopec) is expected to process 15.37 million tons of crude oil in August, equivalent to 3.63 million barrels per day. This is about 1% less than the company's daily processing volume of 3.67 million barrels in July

as China's second largest oil refiner, PetroChina Co., PTR (PetroChina for short) may process 10.22 million tons of crude oil this month, equivalent to 2.42 million barrels per day. This is 4.3% lower than the company's daily processing volume of 2.53 million barrels in July

according to the data of the National Bureau of statistics, China's crude oil processing volume increased for the sixth consecutive month in July, reaching a record of 33.11 million tons, or 7.83 million barrels per day, an increase of 3.7% over the previous month and 8.3% over the same period last year

in other parts of Asia, Taiwan's refiners plan to slightly reduce crude oil processing volume in August compared with last month, while South Korea's crude oil processing volume will rise slightly compared with July to meet the demand of the local marine oil market

China's oil inventories remain high

Sinopec said on its station that the seasonal fishing moratorium implemented in some sea areas, the humid weather in southern China and the continuing economic recession led to sluggish fuel demand in July, especially weaker diesel demand

also said that the oil inventory of Sinopec and PetroChina at the end of July was therefore higher than that of the previous month

if the data released at the end of this month confirms this, this will be the third consecutive month of continuous growth in oil inventory

at the end of June, the diesel inventory of Sinopec and PetroChina was 37.5 million barrels, and the gasoline inventory was the main body of the safety compliance of food contact materials, with 23.7 million barrels, an increase of 7%-8% over the previous month

a senior analyst from China Petroleum and Petrochemical Engineering Institute, a subsidiary of PetroChina, said that PetroChina's gasoline inventory has continued to rise since August

he said that although diesel sales have strengthened, PetroChina's total oil inventory remained high in August

he also said that in addition to the weak demand for downstream fuel, another factor was the high output of Guangdong refinery of China National Offshore Oil Corp. and local small refineries

he said that CNOOC and didi will also attract users' complaints. The oil products sold by Fang refinery are much discounted compared with the quotation of PetroChina. Coupled with the oil smuggling in southern China, PetroChina faces a lot of competition

however, the analyst, who declined to be named, said that PetroChina and Sinopec would likely maintain the processing volume in September at least equal to that in August, because fuel demand was expected to grow

Sinopec also said at its station that due to the economic recovery and the end of the fishing moratorium, the demand for fuel oil will rise in September, especially the demand for diesel oil

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