11 September 2012 16:03 [Source: ICIS news]
By James Dennis
Chinese oil demand had been impacted by the slowdown in economic growth in
After hitting peaks above 5m bbl/day in the first half of 2012, China’s crude oil imports nose-dived in August, falling to a 22 month-low of around 3.5m bbl/day, C1 said.
Nevertheless, 2012 crude imports are forecast to rise 520,000-540,000 bbl/day, up 5% year on year and covering around 58% of domestic crude demand.
However, industrial demand for gasoil and fuel is expected to be weak as
Gasoline consumption is expected to rise by 1.6m bbl/day in 2012, up 8% year on year. C1 expects third party processing and export of gasoline to total around 60,000 bbl/day, or 4-5% of total domestic production. The rise in gasoline demand is supported by increased living standards for its large population, urbanisation and high levels of car sales.
However, there are obstacles to the growth in gasoline demand with government measures to control negative impacts on the environment and strain on the road system. There is also competition from substitutes such as electric vehicles.
C1 predicts that the fuel oil market in
Demand for gasoil in 2012 is expected to total around 3.4m bbl/day in 2012, with muted growth on the previous year. However, the supply of gasoil in 2012 is expected to be tight due to limitations in refinery capacity which are not expected to ease until sufficient new facilities are onstream towards the end of 2013.
A peak of refinery maintenance at facilities operated by the major state owned companies such as Sinopec and Petrochina in the second quarter of 2012 further tightened supplies of gasoil and other oil products in
C1 added that
However, the ability of independent refiners to cover lost production from outages at state-owned refineries was constrained by instability and limitations of feedstock supplies and low run rates, which averaged just 37%. Average operating rates for state owned Chinese refiners has been over 80%. The lowest operating rate was around 76%, C1 added.
State refiners benefit from secure and stable crude supply, predictable domestic refined product demand, and government guided pricing for key products such as gasoline, gasoil and naphtha. State refiners have enjoyed reasonable margins which were around 4.1% in the first half of 2012, C1 said.
The APPEC conference, an annual oil industry event, runs from 11-13 September.
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