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OIL DATA: China June Crude Runs Fall Amid Weak Economy

Pubdate:2012-07-16 11:09 Source:lijing Click:

China processed 35.98 million metric tons of crude oil in June, down 0.6% from a year earlier and the lowest level in 12 months, data from the National Bureau of Statistics showed Friday.

Refinery throughput was in line with weaker Chinese crude imports in June, which fell to their lowest level in seven months. China's oil demand has tracked the slowing Chinese economy; gross domestic product grew just 7.6% in the second quarter from a year earlier, the slowest rate of growth since the first quarter of 2009.

"It was a bad month," said Kang Wu, an analyst at FACTS Global Energy. "The overriding effect has been the slowing of China's economy. Everywhere is bad."

China's crude runs, equivalent to 8.8 million barrels a day, were 3% lower than May's 9.06 million barrels a day, according to Dow Jones Newswires calculations. In the January to June period, the country processed 229.5 million tons of crude, or 9.24 million barrels a day, up 3.7% compared with the same period a year earlier.

China Petroleum & Chemical Corp. (SNP), or Sinopec Corp., the country's largest refiner, will cut its crude throughput to 54.5 million metric tons, or 4.34 million barrels a day, in the third quarter, a decline of 1.6% from the same period a year earlier and down 0.2% from the second quarter, Shandong-based energy consultancy Oilchem.net said.

Sinopec's refineries in Tianjin and Anqing will reduce throughput in July because of weaker domestic demand, Oilchem said, while its refineries in Tianjin, Zhanjiang, Hainan and Wuhan will cut rates because of planned maintenance.

China's crude runs and imports may have hit a bottom in June as domestic refineries cut operating rates in response to weak economic data in April and May, Mr. Wu said.

Although Chinese refinery rates are expected to remain weak in the third quarter, they could recover in the fourth quarter as the effects of a government-directed economic stimulus start to kick in.

China's oil demand in the second half of 2012 is expected to grow by almost 5% on year, "amid cautious optimism that the Chinese authorities will provide sufficient stimulus measures to support such a growth rate," the International Energy Agency said Thursday in an oil-markets report.

"July's interest rate cut [the second successive monthly reduction], a large infrastructure spending program and massive injections of money into the financial markets tend to support this view," it said.