Daily Management Review

China limits processing of imported oil


04/28/2017


The Chinese authorities are putting on hold refining of imported oil due to fears of a glut of the domestic fuel market. World oil prices fell by 1.9% after this news.



Minghong via flickr
Minghong via flickr
"The Commission for National Development and Reform of China has stopped accepting applications from private refineries to process imported oil since May 5", said a spokesman of the commission’s, which oversees private refineries that process imported oil. 

Restrictions, however, do not apply to large state oil refineries owned by companies such as PetroChina or Sinopec.

The ban on accepting applications for the processing of imported oil has been introduced against the backdrop of growing concerns of the Chinese authorities about the internal excess refining capacity, Reuters reports.

Since 2015, China has allowed 22 independent oil refiners to import crude oil with a quota of 81.93 million tons, or 1.64 million barrels per day, thus accounting for 12% of the total volume of imports of crude oil in the country, reported the China Petroleum and Chemical Industry Federation (CPCIF).

In a report published on the federation's website on Wednesday, CPCIF warned of an increase in surplus capacity in the oil refining industry, which led to an up-ward movement in net fuel exports from China by 40-50% per year over the past few years. 

Excess production capacity in the PRC is expected to grow to 110 million tons, or 2.2 million barrels per day, by 2020 in accordance with the baseline scenario. At that, net fuel exports will increase to 50 million tons, or up to 15% of the total volume of fuel produced in China. 

In the end, China will overtake South Korea and India and will become the largest exporter of fuel in Asia, the CPCIF said.

In September 2016, China imported record volumes of crude oil, overtaking the US and becoming the leading buyer. Import of oil increased by 18% compared with the year before to 33.06 million tons, or 8.04 million barrels per day.

In late September, the volume of US purchases in four weeks was 7.98 million barrels per day, according to the US Energy Information Administration.

For the second time in 2016, China's imports exceeded US imports, reflecting the contracts signed in July, when resumed sales brought down oil below $ 42 per barrel. After that, oil recovered to about $ 50 per barrel.

Deliveries were made after Chinese factories reached the final stretch of the annual maintenance season, which usually occurs in the third quarter.

source: reuters.com






Science & Technology

Fast Company: Apple isn't the most innovative anymore

U.S. Space Program Could Be Delayed Due To SpaceX, Boeing Design Risks: Reuters

What trends will be affecting the health sector in the coming years?

Deloitte identifies main cyber threats for power industry

Zenuity To Take Self Driving Car Road Test In Sweden With Permission

Researchers: Half of Facebook users is fake

Amazon’s Ring gets in a privacy scandal

Facebook Is Creating A Stablecoin For Its WhatsApp Users

IBM offers to use the first quantum computer

Passport Numbers Of 5 Million Customers Hacked: Concedes Marriott

World Politics

World & Politics

AirHelp expects up to 33 th of cancellations and flight delays per day all over the world in 2019

Far-right and Catalonia: New elections in Spain

Trump is losing rating because of shutdown

Hanoi, Vietnam Chosen As Place For 2nd Summit Between Trump And Kim Jong-Un

US, China to hold new negotiations in Beijing

Human Rights Not To Be Dissociated From Stability, Macron Tells Sisi

Brexit Hijack Is Not The Parliament’s Right

Macedonia ignites political crisis in Greece