BEIJING: China’s oil refinery throughput in October eased from last month’s highs amid weakening industrial fuel demand and narrowing refining margins.
Total refinery throughput in the world’s second-largest oil consumer was 63.93 million metric tons, data from the National Bureau of Statistics (NBS) showed on Wednesday.
That was equivalent to 15.05 million barrels per day (bpd), a slight slowdown on September’s record 15.48 million bpd.
Run rates were, however, 9.1% higher than last October, when widespread pandemic restrictions suppressed transport fuel consumption.
China’s crude imports were up 13.5% year-on-year in October at 11.53 million bpd, though growth from September was relatively muted at 3.6%.
China’s factory activity unexpectedly contracted in October, while the non-manufacturing PMI also indicated a slowdown in services and the vast construction sector, pointing to weakening domestic fuel demand.
“Chinese refiners started run cuts from 2H October amidst weakening margins and winter maintenance, with Shandong teapots seeing deepest cuts, as some are running out of crude import quotas,” said Emma Li, a China oil markets analyst at Vortexa in Singapore.
Private “teapot” refiners in Shandong province have faced particular pressure on their margins due to competition for limited Russian oil supply and higher prices for Venezuelan shipments following a US sanctions relief.
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Average refining margins at teapots narrowed to reach about 450 yuan ($61.50) a ton in October from a peak of nearly 1,200 yuan in March, Reuters previously reported.
Onshore crude inventories rose around 2 million barrels over the last two weeks of the month, reaching 958 million barrels as of Nov. 2, according to commodities consultancy Vortexa.
The NBS data also showed that domestic crude oil production in October was 17.33 million metric tons, or 4.1 million bpd, up from 17.2 million tons in 2022.
Natural gas production was up 2.6% from a year earlier at 19.0 billion cubic metres (bcm), from 18.5 bcm last year.
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