China Weekly Oil Summary: Modest Product Demand Rebound in 2023

China has seen a rebound in oil product demand this year as the economy recovers from lockdowns but has fallen short of some expectations.

• The recovery in Chinese economic activity has helped to lift demand for core clean products, with combined consumption across jet, gasoline, and diesel set to finish higher at 850 kbd y/y according to Kpler.
• China’s biggest oil and gas producer, Petrochina, said it expects the country’s oil product demand to rise more that 10% in Q4 from a year earlier. It cites government stimulus as a supportive factor.
• China’s crude throughput is set to decline this month and for the rest of Q4 due to maintenance, softer domestic demand, narrowing oil product exports access and feedstock shortage, traders and analysts told S&P Commodity Insights.
• China’s independent refineries will have to cut runs further in November because of limited crude import quotas – a trend expected to continue until import quotas are issues for 2024 according to Platts sources.
• PetroChina is proposing to buy up to 8m bbl per month of Venezuelan crude from PDVSA, according to Reuters sources, hoping to resume trade flows with the South American country after being cut off by US sanctions for four years.
• DATA: China's manufacturing Purchasing Managers' Index fell by 0.7 points to 49.5 in October, falling back to the contractionary zone below the breakeven 50 mark, indicating that the foundation for continued recovery requires further consolidation, data from the National Bureau of Statistics showed. Non-manufacturing PMI registered 50.6, declining from last month's 51.7.
• DATA: China's Caixin manufacturing PMI declined by 1.1 points to register 49.5 in October from September, falling into the contraction zone below the breakeven 50 mark, as demand expanded slowly while supply contracted, the financial publisher said.
• EXCLUSIVE: China will bring forward part of its roughly CNY3 trillion 2024 quota for issuance of infrastructure-backed local-government “special bonds” to the beginning of next year to ensure investment retains momentum, policy advisors and market analysts told MNI.