CHINA DATA: Oct gasoil output hits 15-month high after supply boost call

Chinese refineries raised gasoil output 12.4% month on month to a 15-month high of 14.52 million mt (3.49 million b/d) in October by both lifting production yields and increasing crude throughput, National Bureau of Statistics data released Nov. 18 showed, after Beijing called for action in the month to stem surging domestic gasoil prices.

The country's gasoil output was last higher at 15.1 million mt in July 2020, NBS data showed.

Production of the middle distillate was likely to continue rising in November, which was expected to shift availability from shortage to oversupply before year end, analysts said.

Beijing in October urged state-owned oil companies to boost gasoil supply as domestic prices surged.

In response, Sinopec announced it had raised gasoil production in October by about 20% from its monthly average over January-September, while PetroChina said it had lifted gasoil supply in the month by 23% year on year, and by 28.6% from its monthly average over July-September.

Gasoil production by the two oil giants accounts for about 67% of China's total output, company results and NBS data showed.

Moreover, gasoil output by Shandong's independent refineries rose 3.1% month on month in October despite tight feedstock supply, data from local information provider JLC showed.

China's gasoil production yield also hit a 15-month high in October at 24.9%, up from 23% in September, NBS data showed.

Meanwhile, the country's fuel oil output fell 12.5% month on month to 3.8 million mt in October, while gasoline and jet fuel output edged up 1.4% and 0.5%, respectively, despite crude throughput rising 4.2% over the same period to 58.4 million mt in October.

Supply flips to surplus

Sinopec said it will run its refineries at full capacity in November while adjusting yield to lift gasoil supply by 29% year on year and by 18% from October.

PetroChina expected its gasoil supply in November and December would jump 50% from its average monthly volume over January-August.

"This will lead to surplus in the domestic market in the rest of the year as demand is cooling down," an analyst with an international trading firm said.

Analysts expected gasoil demand from the transportation sector to ease after a Nov. 11 cyber shopping festival, and as the onset of winter weather in northern China reduces construction activity.

S&P Global Platts Analytics on Nov. 5 estimated that China's gasoil demand in November and December will fall from around 4.3 million b/d in October to about 4.1 million-4.2 million b/d.

Sources at Sinopec refineries have said they will resume gasoil exports in December as a result, Platts has reported.

China's petroleum output, throughput:

(Unit: million mt )

*Figures for 2020 differ from volumes reported earlier due to NBS revisions

Source: China's National Bureau of Statistics