22 Dec 2021 | 08:06 UTC

CHINA DATA: Nov gasoil output hits record high to ensure domestic supply

Highlights

Gasoil yield hits 35-month high of 28%

High output leads to oversupply

Jet fuel output hits multiyear low

China's gasoil output from refinery hit a record high of 16.45 million mt, or 4.09 million b/d, in November in response to Beijing's call to ensure domestic supply, data from the National Bureau of Statistics showed on Dec. 22.

The previous record high was 16.21 million mt in October 2017, according to NBS data.

China's gasoil prices surged in September and H1 October as domestic supply fell short amid low output. Sinopec and PetroChina led the state-owned oil companies to lift throughput and boost fuel production.

Refineries' increased gasoil production yield to 35-month high of 27.6% while raising total throughput to a five-month high of 14.57 million b/d in November, NBS data showed.

In comparison, Chinese refineries lowered gasoil yield to an average of 22.2% in the first ten months due to slowing growth in domestic demand and while supplies were hefty from the barrels blended with light cycle oil in H1 2021.

The high gasoil output in November and weakening demand in winter resulted in oversupply in domestic market and forced oil giants to export the fuel by the end of the month, even though they initially planned to skip gasoil exports.

"Not only in November, oil firms may export more gasoil or gasoline this month to offset inventory pressure in some regions, while refiners will cut output in December," a trade source in East China said.

Jet fuel yield falls

High gasoil output was not only a result of raised crude throughput but also a fall in jet fuel production.

China produced 2.26 million mt of jet fuel in November, which was the lowest output since December 2013.

Jet fuel yield, meanwhile, dropped to 3.8% which was the lowest level since January 2011.

Domestic demand for the fuel remained weak as China's tight COVID-19 controls kept discouraging traveling.

As a result, China increased jet fuel exports by 13.3% month on month to a 19-month high of 940,000 mt in November despite output dropping to a multiyear low.

Jet fuel exports were last higher in April 2020 at 2.03 million mt.

"China increased jet fuel exports in November as Asian market was so strong ahead of the emergence of omicron, and as domestic demand remains sluggish," a Singapore-based trader said.

CHINA'S PETROLEUM OUTPUT (million mt)

Nov-21
Nov-20*
Change
Oct-21
Change
Crude oil
16.31
15.88
2.7%
16.83
-3.1%
Crude throughput
59.64
58.36
2.2%
58.40
2.1%
LPG
4.01
3.96
1.2%
3.96
1.3%
Naphtha
4.82
4.13
16.8%
4.53
6.4%
Gasoline
13.51
11.75
15.0%
13.13
2.9%
Jet/kerosene
2.26
3.68
-38.4%
3.09
-26.6%
Gasoil
16.45
12.99
26.7%
14.52
13.3%
Fuel oil
4.27
3.10
37.6%
3.80
12.3%
Jan-Nov 2021
Jan-Nov 2020*
Change
Crude oil
182.48
178.03
2.5%
Crude throughput
644.80
614.68
4.9%
LPG
43.87
40.66
7.9%
Naphtha
44.61
39.87
11.9%
Gasoline
141.04
120.03
17.5%
Jet/kerosene
37.55
36.74
2.2%
Gasoil
146.51
146.07
0.3%
Fuel oil
39.08
32.70
19.5%

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

Source: China's National Bureau of Statistics