Oil Updates – Oil Down; July Chinese Refinery Output Falls to 2-Year Low; Rebound in marine fuel sales in Singapore
RIYADH: Oil prices fell on Monday as weak economic data from China raised concerns about demand from the world’s biggest crude importer while the head of the world’s top exporter Saudi Aramco said he was ready to increase its production.
Brent crude futures fell 1.78% to $96.37 a barrel as of 11:10 a.m. KST.
U.S. West Texas Intermediate crude futures fell 1.74% to $90.35.
China’s July refinery output drops to more than 2 years due to plant outages
Crude throughput at Chinese refineries fell last month to its lowest level since March 2020, as several state refiners suffered unscheduled shutdowns and their independent counterparts cut output in response to thinning margins.
Refiners processed 53.21 million tonnes of crude oil in July, down 8.8% from a year earlier, according to data from the National Bureau of Statistics.
That equates to 12.53 million bpd, the lowest daily rate since March 2020, and down from 13.37 million bpd in June.
The weaker throughput in July extended a rare decline in refinery processing in China seen in the first half of 2022, as strict COVID-19 lockdowns and fuel export controls curbed their output.
In the first seven months, refineries processed 380.27 million tonnes, down 6.3% from a year earlier and equivalent to around 13.09 million bpd.
Prolonged outages at major state-run refineries such as Sinopec Shanghai Petrochemical Corp’s 320,000 bpd crude oil facility and PetroChina Wepec’s 200,000 bpd plant weighed on domestic output.
Sinopec only resumed refining at some of the units at the Shanghai plant last week, while northeast Liaoning-based Wepec is not expected to resume operations until the end of August after nearly three months of shutdown, an industry source said.
Singapore marine fuel sales rebound to 7-month high in July
Marine fuel sales in Singapore, the world’s largest bunker hub, rose 10% month-on-month to a seven-month high of 4.12 million tonnes in July, according to the latest data from the Maritime and Port Authority of Singapore.
The rise came amid a rise in ship arrivals for bunkering, which climbed 8% month-on-month to 3,181 ship calls in July. Bunker fuel prices were also lower in July compared to June, amid falling crude prices upstream.
Sales of low sulfur fuel oil and high sulfur fuel oil increased from the previous month, according to MPA data.
LSFO supplied to ships rose 7% month-on-month to 2.51 million tonnes in July, although sales fell 7% year-on-year.
Low sulfur bunker premiums were still high in the first half of July, at a time when freight premiums reached record highs, before falling towards the end of the month.
Meanwhile, HSFO supplied to ships rose 16% month-on-month to 1.27 million tonnes in July, and was up 20% year-on-year.
(Contributed by Reuters)