Chinese refineries processed 11.21 million bpd of crude oil last month, up 2.3 percent on the year and the second-highest daily processing rate on record, Reuters reported, citing data from the country’s National Bureau of Statistics. The highest daily rate was hit last December, when refineries processed 11.26 million bpd.
The increase came on the back of new import quotas that Beijing awarded to independent refineries, commonly known as teapots. The throughput of state-owned refineries in June stayed relatively unchanged from last year. An Energy Aspects analyst, Nevyn Nah, commented that the June throughput figures were impressive in the context of continuing maintenance.
Now China’s refiners are preparing for a cut in fuel and other oil products output in the third quarter, which is also part of the reason for the increase. Over the first half of the year, Chinese refiners processed about 11.1 million bpd of crude, up 3 percent on the first six months of 2016.
China imported 8.79 million barrels of crude daily last month, up 17.9 percent on an annual basis, though 2.9 percent less than the May daily import rate. The strong figures provided much needed support for international prices, as domestic oil production continued declining while demand remained healthy thanks to oil prices remaining below US$50 a barrel, and according to one analyst from Sanford C. Bernstein, to an increase in the sales of SUVs.
The latest refinery throughput figures pushed international prices up today, aiding a smaller than expected number of new rig additions in the U.S., as reported by Baker Hughes on Friday, and a substantial inventory draw reported by the Energy Information Administration last Wednesday. U.S. inventories fell by 7.6 million barrels in the week to July 7, with the total slipping below 500 million barrels for the first time in quite a while.
At 11:30 AM CST, WTI was trading at US$46.19 a barrel, with Brent crude at US$48.64 a barrel.
By Irina Slav for Oilprice.com
