Oil up on Chinese economic data

China June crude oil throughput hits record


LONDON/ SINGAPORE/BEIJING: Oil prices rose slightly on Monday as Chinese industrial output and retail data topped expectations but gains were capped by overall figures showing the country’s slowest quarterly economic growth in decades. The positive Chinese data may indicate early success in the government’s stimulus efforts and potentially more oil demand in the world’s second biggest economy. Brent crude futures rose $0.29, or 0.43%, to $67.01 a barrel by 1125 GMT, while US crude was up $0.23, or 0.38%, at $60.44 a barrel.

 Both contracts last week made their biggest weekly gains in three weeks on cuts in US oil production and diplomatic tensions in the Middle East. Analysts at ANZ bank said China’s crude oil imports year-to-date still looked impressive, even as imports fell in June for a second straight month.

 China’s crude oil throughput rose to a record 13.07 million barrels per day in June, up 7.7% from a year earlier, following the start of two new, large refineries, official data showed on Monday.

Still, economic growth of just 6.2% in the second quarter of 2019 – the worst in 27 years – highlighted the impact of trade tensions with Washington and raised the possibility that more incentives might be needed to jump-start the economy.

 Despite a truce agreed between the Chinese and US presidents last month, the trade war remains unresolved. The Paris-based International Energy Agency’s monthly report on Friday said that abundant output and sluggish growth would leave oil markets increasingly over-supplied going into 2020.

 Meanwhile, Chinese crude oil throughput rose to a record level in June, up 7.7% from a year earlier, following the start-up of two large new refineries, official data showed on Monday. Crude processing volumes last month reached 53.7 million tonnes, or about 13.07 million barrels per day (bpd), beating the previous record in April of 12.68 mln bpd, according to figures from the National Bureau of Statistics (NBS).

 The hefty processing rates were supported by supply from two major new refineries after private firm Hengli Petrochemical ramped up its 400,000-bpd refinery in Dalian to full capacity in late May and Zhejiang Petrochemical began trial runs at a similar-sized east coast refinery.

 The data also showed that China’s crude oil output climbed 1% last month from a year earlier to 16.1 million tonnes, or about 3.92 million bpd, up from May’s 3.82 million bpd. First-half crude output rose 0.8% on a year ago to 95.39 million tonnes.

 The tepid growth highlighted the geological challenges mature fields and lack of new discoveries faced by state oil majors trying to boost domestic oil output. Natural gas production rose 13.1 percent in June from a year ago to 13.9 billion cubic meters (bcm). Output for the first half grew 10.3 percent on year to 86.4 bcm.

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