Improved fuel margins and the end of spring maintenance boosted China’s oil refinery throughput in June to the highest level since September 2023.
Chinese refiners processed a total of 15.2 million barrels per day (bpd) of crude oil into fuels last month, up by 8.5% from a year earlier, and up from the lows seen in April and May, according to Bloomberg calculations based on official Chinese data released on Tuesday.
Amid heavy planned seasonal maintenance, crude oil processing at China’s refineries dipped by 1.8% in May from a year earlier, to the lowest level in nine months.
In May, Chinese refiners processed a total of about 13.92 million bpd—the lowest level since August last year as several major state-run and private refiners underwent scheduled maintenance ahead of the peak driving season.
The processing rates in May were also lower than the 14.12 million bpd of crude Chinese refiners processed in April.
China accelerated crude oil imports in March and April, but the increased purchases this spring weren’t necessarily a sign of recovering fuel demand in the world’s biggest crude importer. It’s more likely that Chinese refiners were aggressively stockpiling cheaper crude amid uncertainties about sanctioned barrels going forward.
In June, refiners returned from maintenance, while China’s crude oil imports jumped by 7.4% on the year to 12.14 million bpd, driven by a sharp rise in crude deliveries from Saudi Arabia and Iran.
Chinese refiners began raising processing rates ahead of the expected peak demand in the third quarter despite generally slowing consumption of gasoline and diesel.
Refiners sought to capture the higher margins, especially for diesel, in June.
Analysts expect strong Chinese imports and refining output to continue into July amid peak travel season and state-held refiners rebuilding fuel stocks.
Strong Chinese demand would be a bullish driver for oil prices in the coming weeks in a summer global market that’s tighter than previously expected.
By Tsvetana Paraskova for Oilprice.com
