Refinery throughput rates in China rose to a record high last month, reflecting strong demand for fuels from overseas and the need to build inventories before maintenance season.
At some14.9 million bpd, according to data released this week and cited by Reuters, China's March refinery runs could add upside potential to oil prices as indicative of the country's continued recovery from pandemic lockdowns.
The average for January and February stood at 14.36 million barrels daily, which compared with 13.98 million bpd for the first two months of 2022 and 14.1 million bpd for December 2022.
Over the first three months of the year, refinery throughput rates were 5.2% higher than a year earlier, the data also showed.
Meanwhile, fresh economic data out of Beijing showed the country's economy had expanded by 4.5% in the first quarter, which pushed oil prices higher earlier today.
This rate of growth was higher than expected and a lot higher than the 2.9% growth rate booked for the final quarter of 2022.
The increase in refinery throughput rates is a direct result of this rebound, which features a strong increase in travel, both domestic and international. According to the latest data, Chinese refined product exports last month rose by 35.1% from March last year.
What's more, the European Union's embargo on Russian oil and fuels is benefiting other large fuel exporters, such as China, which also has the advantage of having access to discount Russian crude it can use to produce fuels it then sells to the European Union.
Throughput rates will likely decline before long as refineries enter regularly scheduled maintenance but until then they will stay high as refiners stock up on refined products, Reuters noted in its report.
Economists expect China to account for the biggest portion of oil demand growth this year, although their expectations differ in the part about the actual size of the increase. It varies between 500,000 and 1 million bpd.
By Charles Kennedy for Oilprice.com
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