• 3 minutes e-car sales collapse
  • 6 minutes America Is Exceptional in Its Political Divide
  • 11 minutes Perovskites, a ‘dirt cheap’ alternative to silicon, just got a lot more efficient
  • 4 hours GREEN NEW DEAL = BLIZZARD OF LIES
  • 4 days The United States produced more crude oil than any nation, at any time.
  • 3 days How Far Have We Really Gotten With Alternative Energy
  • 1 day Bad news for e-cars keeps coming
  • 3 days China deletes leaked stats showing plunging birth rate for 2023
  • 4 days The European Union is exceptional in its political divide. Examples are apparent in Hungary, Slovakia, Sweden, Netherlands, Belarus, Ireland, etc.
Bank Sees U.S. Shale Growing for Another 4 Years

Bank Sees U.S. Shale Growing for Another 4 Years

U.S. shale oil production has…

76% of Small Offshore Oil Companies at Risk

76% of Small Offshore Oil Companies at Risk

The Biden administration's new financial…

U.S. Crude Is Dominating Global Oil Markets

U.S. Crude Is Dominating Global Oil Markets

Surging U.S. crude exports, particularly…

Zainab Calcuttawala

Zainab Calcuttawala

Zainab Calcuttawala is an American journalist based in Morocco. She completed her undergraduate coursework at the University of Texas at Austin (Hook’em) and reports on…

More Info

Premium Content

Asian Refiners Reduce Production Rates As Demand Stagnates

North Dakota Refining

Slow economic growth in Asia has led local downstream firms to turn down refining production as energy products flood the regional market, according to a recent report by Reuters.

Typical seasonal patterns require energy producers to increase output before and during the summer months to meet demand caused by the increased use of cooling devices.

However, many Asian refiners have decided to cut output capacity in July and August after several countries in the region binge-purchased oil and gas after the oil price drop earlier this year.

"Falling refining margins are prompting refiners to consider economical run cuts," said Sri Paravaikkarasu, a senior analyst at Facts Global Energy.

"This will help to clear some surplus in the second half of 2016.”

Increased crude oil prices have also pushed refiners to decrease margins on processing services.

PetroChina and Chevron Corp.’s joint venture, Singapore Refining Company, will operate at 80 percent capacity over the next three months, according to anonymous sources cited by Reuters. The move represents a 10 percent decrease from production rates in May, the source added.

The South Korean refiner SK Energy will cut crude output through August, and the country’s second largest refiner, GS Caltex, experienced run rates that were ten points lower in Q2 than Q1. Since then, GS Caltex’s rates have not shown signs of improvement. Related: U.S. Oil Rig Count Higher, Sees Biggest 2-Week Rise In A Year

Both firms declined Reuters’ requests to comment on the downturn.

Analysts predict that a full six months of production reductions could lead Asian energy demand to rebound as 2016 closes up. Jet fuel, used for heating purposes, typically peaks in the wintertime.

"Fuel inventories and crude prices are starting to come off in third quarter and we're going into maintenance season again," said an inside source from a North Asian refinery. "Q4 will be better than Q3."

ADVERTISEMENT

By Zainab Calcuttawala for Oilprice.com

More Top Reads From Oilprice.com:


Download The Free Oilprice App Today

Back to homepage





Leave a comment
  • Gregory Foreman on July 20 2016 said:
    I can’t help but wonder and question: is the “stagnation” in demand more attributable to a decline in demand or to an increase in production.

Leave a comment




EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News