China’s October Refinery Runs Fell on Demand, Margins

Chinese oil refinery throughput in October eased to 63.93mn tons, or 15.05mbpd, from September record levels of 15.48mbpd amid weakening industrial fuel demand and narrowing refining margins, data from the National Bureau of Statistics (NBS) showed.

• Refinery run rates were 9.1% higher on the year in October.
• October crude oil imports stood at 11.53mmbpd, up by 13.5% year on year and up by 3.6% on the month.
• 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," Emma Li, Vortexa analyst, said.
• Teapot refiners in Shandong also faced pressure on margins due to competition for limited Russian oil supply and higher prices for Venezuelan shipments following a US sanctions relief.
• Average refining margins at teapots narrowed to reach about 450 yuan/ton in October from a peak of nearly 1,200 yuan/t in March according to Reuters.
• Onshore crude inventories rose around 2mn barrels over the last two weeks of October to 958mn barrels as of 2 November, according to Vortexa.
• Domestic crude oil production last month stood at 17.33mn tons, or 4.1mbpd, up from 17.2mn tons last year, NBS data showed.