China saw its oil refining output decline in May compared to the same month last year amid falling refining margins and planned seasonal maintenance, according to official Chinese data out on Monday.
Refiners in China processed 14.25 million barrels per day (bpd) last month, down by 1.8% year-over-year, according to data in tons from the National Bureau of Statistics (NBS) converted into barrels by Reuters.
The refining output fell from the May 2023 level of 14.6 million bpd and from 14.3 million bpd of refinery output in April 2024.
Between January and May, China's refinery throughput averaged 14.49 million bpd, which was just 0.3% higher compared to the same period last year.
The latest data on crude oil processing rates in China isn't encouraging for the oil market, which has been fearing weaker-than-expected demand in the world's top crude oil importer amid an ongoing property crisis and mixed economic signals.
Last year, total refining output in China hit 14.76 million bpd. It was a record but this year may not see another one, because of the real estate crunch, which has affected demand, according to a Bloomberg survey of six market consultants and analysts. The Bloomberg survey points to flat refining output this year in China or even a decline. It would be the first decline since 2004.
Chinese refinery runs were low in both April and May due to the seasonal maintenance at some large state and privately-held refineries.
"Chinese refinery runs slumped to Covid-era levels in April and an 8.7% y-o-y decline in Chinese crude oil imports in May suggest subdued runs again last month," the International Energy Agency (IEA) said in its monthly report last week.
"The latest bout of demand weakness shows up in refining margins in Asia and the United States, which retreated to three-year lows in May. Singapore margins are close to, if not already in, run cut territory, with gasoline cracks particularly weak," the agency said.
Market observers will be watching Chinese refining output from June onwards, after the April-May seasonal maintenance ends, for a look into China's run rates and apparent oil demand.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More
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