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BEIJING / Reuters
Chinese oil refineries operated in July at their lowest daily rates since September 2016, official data showed on Monday, to ease brimming inventories as state-owned oil giants faced off independents in a retail petrol price war. China, the world’s second-largest oil consumer, processed 45.5 million tonnes of crude in July, or 10.71 million barrels per day (bpd), National Bureau of Statistics (NBS) data showed. This is 0.4 percent higher than a year ago but down about 500,000 bpd from June.
The drop in China’s refinery runs and further indications of ample fuel supplies raised concerns about its oil demand in months ahead, knocking back global crude benchmark Brent on Monday and holding it just over $52 a barrel.
“Runs were slightly below our expectation, as fuel demand growth remained tepid and stocks were brimming,†said Harry Liu, a downstream consultant with IHS Markit.
Faced with fierce competition from independent oil processors, who added to the product overhang, the biggest state refiner, Sinopec, lowered its runs in the third quarter after running at hefty rates in the first half of the year, Reuters has reported.
Sinopec also reduced its third-party purchases from the independents from June, leading the smaller operators to scale back production as well, Liu said. Sinopec and state-owned rival PetroChina have been waging a retail price war against the independents known as “teapots†at the nation’s petrol stations.