China Weekly Oil Summary: Second Batch of Fuel Quotas Released

China issued fuel exporters a second batch of quotas of 14mn tons of diesel, gasoline, and jet fuel according to OilChem and JLC. It increases this year’s allocation to 33mn tons – 18% higher than the first two batches last year.

• China’s Shandong refiners are bringing forward planned maintenance due to bearish margins - curtailing imports of discounted crude. The country’s peak refinery maintenance is also boosting its naphtha imports according to Vortexa.
• Chinese refiners are set to pull lower volumes of Saudi crude in June vs May according to Reuters sources, down by 5.8 million barrels in June from 45 million barrels in May.
• CDU capacity utilisation rates at China’s domestic refineries will average 68.58% in May, down 1.3 percentage points on the month, and 3.05 percentage points on the year, OilChem said.
• China’s refined oil production in June is expected to rise both on the month and on the year, according to OilChem.
• China’s Independent Refiners are likely to cut their fuel oil imports in May amid weak cracking margins and higher import costs, according to Platts.
• China's exports rose 1.5% y/y in April, beating the market consensus for a 1.3% y/y rise and far ahead of the 7.5% y/y decline seen in March, data released by Customs showed.
• EXCLUSIVE: China’s trade should recover to pre-pandemic trends of single digit growth in 2024 driven by export demand for new manufactured goods, following flat results last year, a senior policy advisor to the National Development and Reform Commission told MNI.
• China’s retail sector steadily recovered in May with the retail sentiment index (CRPI) reaching 50.9%, up 0.5pp from April, according to the China Federation of Commerce.