China Set To Raise Fuel Exports Amid Higher Demand And Margins - OilPrice.com
China Set To Raise Fuel Exports Amid Higher Demand And Margins | OilPrice.com
China is set to raise its fuel exports in October as refining margins and international jet fuel demand rise and refiners are expecting another batch of fuel export quotas, analysts and industry sources have told Reuters.
China’s exports of refined petroleum products are set to rise in October compared to September, with gasoline and jet fuel seeing the biggest increases month-over-month, according to industry estimates compiled by Reuters.
The third batch of fuel export quotas for refiners is also expected to lead to higher exports next month.
At the end of August, China issued a larger-than-expected fuel export quota in the third batch of allocations this year as authorities look to incentivize refiners to sustain economic growth and sell more product abroad at a time when China’s 2023 fuel demand may have peaked.
With these allocations, China signaled it looks to support refinery operations and sales overseas amid a faltering economic recovery domestically that weighed on fuel demand and economic growth.
High margins on the export markets and peak domestic summer demand prompted China’s refiners to boost crude oil processing to a record-high 15.23 million barrels per day (bpd) in August, official Chinese data showed earlier this month.
Refiners expect a possible fourth batch of export quotas to be issued this year, Sun Jianan, an analyst at Energy Aspects, told Reuters.
“Higher October export plans suggest refineries are not worried about using up existing quotas and they are expecting additional export quotas,” Sun said.
So far this year, Chinese refiners have tripled their exports of diesel as export quotas and rising refining margins in Asia proved incentives enough amid tepid domestic diesel demand.
Between January and August, China’s exports of diesel soared by 197.2% compared to the same eight months of 2022, according to data from the General Administration of Customs cited by Reuters.
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By Tsvetana Paraskova for Oilprice.com
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