• 4 minutes Energy Armageddon
  • 6 minutes How Far Have We Really Gotten With Alternative Energy
  • 10 minutes Russia Says Europe Will Struggle To Replace Its Oil Products
  • 2 hours GREEN NEW DEAL = BLIZZARD OF LIES
  • 4 hours Reality catching up with EV forecasts
  • 7 days "Natural Gas Price Fundamental Daily Forecast – Grinding Toward Summer Highs Despite Huge Short Interest" by James Hyerczyk & REUTERS on NatGas
  • 1 day 87,000 new IRS agents, higher taxes, and a massive green energy slush fund... "Here Are The Winners And Losers In The 'Inflation Reduction Act'"-ZeroHedge
  • 6 days A Somewhat Realistic View of the Near Future for Electric Vehicles Worldwide
  • 12 days The Federal Reserve and Money...Aspects which are not widely known
Oil Gains Momentum On Strong U.S. Economic Data

Oil Gains Momentum On Strong U.S. Economic Data

Oil continued to gain momentum…

A Long-Term Play On Diversity In Renewable Energy

A Long-Term Play On Diversity In Renewable Energy

The trick for long-term investors…

China’s No.2 Refiner Cuts Fuel Output, Could Defer Oil Cargoes

As the coronavirus continues to batter fuel demand in China, the country’s second-largest refiner, state-held PetroChina, is cutting refinery runs and is talking to key suppliers in the Middle East about possibly deferring some crude oil loadings or reducing volumes, a senior PetroChina official with direct knowledge of the plans told Reuters on Monday. 

The Chinese refiner doesn’t see fuel demand rebounding in March, the official told Reuters, adding that PetroChina is in discussions with its major suppliers in the Middle East—including Saudi Arabia, the United Arab Emirates (UAE), and Kuwait—about potentially deferring crude cargo loadings or cutting imports from those suppliers.

Should PetroChina, and other Chinese refiners for that matter, cut loading volumes or defer cargoes, the oil glut on the market in Q1 will swell even more than analysts and OPEC had predicted.  

ADVERTISEMENT

PetroChina will be reducing its crude oil throughput by 320,000 barrels per day (bpd) in February compared to its original refinery run plans, the official told Reuters. The February cut would be equal to around 10 percent of PetroChina’s average fuel production of some 3.32 million bpd, according to Reuters estimates.

Related: OPEC’s Oil Production Plunges, But It May Not Be Enough

PetroChina joins other refiners in the world’s top oil importer to have trimmed crude processing rates as the deadly virus outbreak is crippling demand with all the travel restrictions and thousands of canceled flights to, from, and within China. Due to weak fuel demand and depressed industrial activity, Chinese refiners—from the biggest refiner in Asia, Sinopec, to the independent refiners in Shandong—are cutting refinery runs, while commodity trading houses and oil majors are scrambling to find spot buyers for crude oil outside China.  

ADVERTISEMENT

According to estimates from IHS Markit, the virus outbreak is set to knock out at least 1.7 million barrels per day (bpd) of refinery runs in China in February, compared to an otherwise projected growth of 760,000 bpd. This would be “the sharpest single-month decline of 1 MMb/d in history,” Xiaonan Feng, Research Analyst at IHS Markit, said last week.  

The slowdown in China’s industrial activity and the shutdown of factories amid the coronavirus outbreak is causing the worst shock to oil demand in over a decade, Jeff Currie, global head of commodities research at Goldman Sachs, said last week.  

By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage

ADVERTISEMENT


ADVERTISEMENT


Leave a comment

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