China Refiners Reduce Run Rate but Increase Diesel Output

China refiners have reduced run rates as new covid outbreaks and lockdown measures are impacting China’s domestic oil demand.

• The run rate at Shandong independent refiners fell 3% for the week to Nov 18 falling below historical seasonal averages according to Bloomberg.
• The additional fuel export quotas of 15m tons, released at the end of September, has supported diesel production, but weak domestic oil demand has pushed refiners to reduce overall output.
• Diesel output however increase by 10% to a record high of 18.8m tons in October.
• Refinery margins for diesel remain relatively healthy compared to other products, with weaker demand for fuels such as gasoline and jet fuel.

Source: Bloomberg / National Bureau of Statistics of China