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State-run PetroChina, Asia’s largest oil and gas producer and China’s second-largest refiner, is reporting $16.66 billion in profits from January to September, for a 60% jump year-on-year, Reuters reports.
The significant jump in profits comes despite zero-COVID policies that have chipped away at domestic demand for fuel, according to PetroChina.
Despite pandemic lockdowns across the nations, PetroChina saw its domestic crude oil output rise by 2.7% and its domestic gas output rise by 5.1% from January to September.
Numbers for refining, however, were lower than the same period in 2021, with PetroChina crude oil refining down 1.8%, reflecting consumption stifled by the ongoing zero-COVID policy.
PetroChina’s reporting goes only to September, keeping in mind that September and October have seen Chinese crude processing pick up pace, with the end of seasonal maintenance. According to Bloomberg data, China’s crude processing increased 9% in September, month-on-month, which represents the biggest increase since February. As of the end of September, China was processing 13.88 million barrels a day, according to Bloomberg.
Further out, Blooming says that markets could see even higher refining numbers in Q4, with a potential 500,000 bpd for October, November and December, while at the same time, new refineries are set to come online, potentially adding more volume.
China’s zero-COVID policy could get in the way of Q4’s profits, with lockdowns gaining even more traction this week.
On Thursday–and for the third consecutive day–China reported over 1,000 new coronavirus cases and moved to intensify restrictions across major cities, including Wuhan and Xining. People are being forced to remain at home and certain streets and entire neighborhoods in China’s Guangzhou, a manufacturing center. In Wuhan, where the COVID pandemic originated, despite low numbers of confirmed COVID cases, strict measures have been put in place to keep people from leaving their homes.
By Charles Kennedy for Oilprice.com
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Charles is a writer for Oilprice.com