China’s refinery output falls for a fifth month as fuel demand disappoints
China’s oil refinery output in August fell 6.2% from a year earlier, official data showed on Saturday, declining for the fifth month as disappointing fuel demand and weak export margins curbed production.
Refiners processed 59.07 million metric tons of crude oil last month, data from the National Bureau of Statistics (NBS) showed, equivalent to 13.91 million barrels per day (bpd).
The August level inched up from July’s 13.908 million bpd, which was the lowest since October 2022, and off a hefty rate of 15.23 million bpd a year earlier.
Output for the first eight months of the year was 472.53 million tons, or 14.14 million bpd, down 1.2% from the corresponding period last year, the data showed.
While Chinese diesel fuel demand has been weighed down by a broad economic slowdown and greater replacement by cheaper liquefied natural gas as a truck fuel, gasoline consumption has been below expectations despite a seasonal demand uptick.
“Although gasoline use hits a peak season as more people take to the roads, overall use of the motor fuel is below year-ago levels,” Sublime China Information, a local commodities consultancy, wrote in a market summary early this week.
China’s gasoline demand is expected to peak in 2025, a China oil researcher told an industry gathering in Singapore earlier this week, as EV penetration has exceeded the government’s target and is set to reach 40% of new car sales this year.
Planned maintenance at Sinopec’s Jinling and Tianjin refineries and PetroChina’s Ningxia and Jilin plants capped throughputs at state majors, according to consultancy Oilchem.
Softening export margins for gasoline and middle distillates also discouraged state refiners to process more.
Throughput at independent refiners, however, saw a modest rebound last month thanks to a small improvement in refining margins.
Shandong-based plants operated at an average of 56.4% of their capacity in August, up 2.2 percentage points versus July, but remained 10 percentage points below year-ago levels, according to Sublime China Information.
Saturday’s NBS data also showed China’s crude oil production in August rose 2.1% from a year earlier to 17.83 million tons, or about 4.2 million bpd. Year-to-date output grew 2.1% on the year to 142.79 million tons, or 4.27 million bpd.
Natural gas production maintained healthy growth, rising last month by 9.4% from a year earlier to 20 billion cubic metres (bcm), and output between January and August grew 6.6% at 163.7 bcm.
Fifth of US Gulf of Mexico crude oil and 28% of gas offline, regulator says
Nearly a fifth of crude oil production and 28% of natural gas output in U.S. Gulf of Mexico federal waters remains offline in the aftermath of Hurricane Francine, the U.S. offshore energy regulator said on Sunday.
Francine marched through prime offshore oil and natural gas producing areas and hit Louisiana as a Category 2 hurricane on Wednesday. The storm toppled trees, flooded coastal areas, and cut power in four southern states.
Energy producers on Sunday had 338,690 barrels per day of oil production and nearly 515 million cubic feet of natural gas offline in Gulf waters, the Bureau of Safety and Environmental Enforcement estimated from producer reports.
Cumulative offshore production losses due to Francine total 2.16 million barrels of crude oil and 4.635 billion cubic feet of natural gas, according to a Reuters tally of BSEE daily estimates.
There were 37 oil and gas platforms still evacuated on Sunday, about 10% of the Gulf of Mexico total, down from 171 evacuated offshore platforms at peak last week, the offshore regulator said citing reports from producers.
NOPA Aug US soybean crush seen at 171.325 million bushels
The monthly U.S. soybean crush likely fell by more than 6% in August as processors idled plants for seasonal maintenance and repairs ahead of the 2024 harvest, analysts said ahead of a National Oilseed Processors Association (NOPA) report due on Monday.
NOPA members, who handle about 95% of all U.S. processed soybeans, were estimated to have crushed 171.325 million bushels last month, according to the average of estimates from nine analysts surveyed by Reuters.
If realized, it would be down 6.3% from the July crush of 182.881 million bushels but up 6.1% from the 161.453 million bushels in August 2023. It would also be the largest August crush on record, besting the prior mark of 168.085 million bushels set in 2019.
August is normally among the lightest crush months on the calendar because many processors idle facilities ahead of the fall harvest. The average estimate implies a daily crush rate in August of 5.527 million bushels a day, which would be the slowest since last September.
India sharply raises import tax on edible oils to support farmers
India has raised the basic import tax on crude and refined edible oils by 20 percentage points, the government said on Friday, as the world’s biggest edible oil importer tries to help protect farmers reeling from lower oilseed prices.
The move could lift edible oil prices and dampen demand and subsequently reduce overseas purchases of palm oil, soyoil, and sunflower oil.
After the duty hike announcement, Chicago Board of Trade soyoil extended losses and fell more than 2%.
New Delhi on Friday imposed a 20% basic customs duty on crude palm oil, crude soyoil, and crude sunflower oil from Sept. 14, the notification said.
It will effectively increase the total import duty on the three oils to 27.5% from 5.5% as they are also subject to India’s Agriculture Infrastructure and Development Cess and Social Welfare Surcharge.
Imports of refined palm oil, refined soyoil, and refined sunflower oil will attract 35.75% import duty against the earlier duty of 13.75%.
China’s aluminium output rises in August as profit spurs smelters
China’s August aluminium output rose from a year earlier to its highest since 2002, as higher prices and the prospect of steady profits kept smelters going strong.
The world’s biggest aluminium producer churned out 3.73 million metric tons of primary aluminium, 2.5% higher year-on-year, data from the National Bureau of Statistics (NBS) showed on Saturday.
The amount was the highest monthly output on NBS data since 2002.
Daily output in August averaged 120,322 tons, less than the average of 122,333 tons in June, based on Reuters’ calculation.
The strong output this year was due to increased operation by smelters in the main producing regions triggered by a rally in aluminium prices which reached an almost two-year high in late May.
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