Weekly China Oil Summary: Refined Product Export Margins Sink

MNI (London) - China’s refined oil export profits have moved into negative territory in Dec, according to OilChem, driven by declining Asian gasoline prices and rising US inventories.

• As of Dec. 15, exporting gasoline from China averaged a 15.3 y/t loss, with gasoil an even larger 50.3 y/t loss. Profits are down 102.7% and 122.5% respectively compared to Dec. 1.
• China is allowing crude oil import quotas for 2024 to be used by independent refineries in December according to S&P Global, with any volumes used deducted from the 2024 allowance.
• Few refiners are interested to apply for the advance despite the tight availability in 2023 suggesting it is too late to boost imports in Dec according to sources. Five out of six quota holders said they will not be applying, and one did not comment.
• Chinese independent refineries’ crude imports increment in Jan 2024 are likely to be limited as demand has softened and delivered prices rise, sources told Platts.
• MNI (Beijing) EXCLUSIVE: China will implement more moderate and targeted fiscal and monetary policy in 2024 as it aims to keep GDP expanding at 5%, while limiting risk and cultivating new drivers of high-quality growth, policy advisors told MNI.
• DATA: Consumption continued to accelerate, hitting a six-month high in November, data released by the National Bureau of Statistics (NBS) showed. Industrial production rose 6.6% y/y, the quickest expansion since June 2021 (8.3%), up from October's 4.6% and beating the 5.8% forecast.
• POLICY: China will not experience deflation as the government expects demand and the economy to improve gradually, according to NBS spokesperson Liu Aihua.