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China's top refiners to run at record in Nov

(Agencies)
Updated: 2009-11-06 16:41

China's leading refineries will raise their crude processing mildly in November to a record high as signs of recovering demand are piling up while a widely-expected fuel price hike nears.

Twelve major plants accounting for more than a third of China's capacity, most of them on the country's eastern and southern seaboards, plans to process 2.70 million barrels per day of crude oil in November, 1.1 percent higher than October, a Reuters poll showed.

The volume would represent around 90 percent of their total refining capacity.

Fujian Refining & Petrochemical Co Ltd, a joint venture between Sinopec Corp, Exxon Mobil and Saudi Aramco, is expected to continue to rev up operations this month. It will hold a formal launching ceremony next week.

Crude throughput at PetroChina's Jinxi will tilt up after a sharp increase of more than 60 percent in October, but the level would still be far below its capacity due to insufficient complementary downstream facilities.

Senior Sinopec officials have said the top refiner in Asia suffered a refining loss in October but sales were expected to improve continuously. One of the officials forecast a profitable fourth quarter because of confidence in China's fuel pricing scheme that guarantees a profit margin if oil prices are below $80 a barrel.

Analysts said last week that China may raise retail fuel prices by 5-6 percent after benchmark crude prices rose more than 6 percent since Beijing's last price move in September.

The moving average of international crude oil prices, on which China's fuel prices are based, climbed further this week.

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"An increase was certain, but the timing was uncertain and the government would not explain," one Shanghai-based oil analyst said.

China's apparent oil demand rose 12.5 percent in September from a year earlier, the sixth rise in a row and the fastest rate since June 2006, Reuters calculation showed.

China's energy authorities also forecast a double-digit growth rate of apparent demand for refined oil products, mainly gasoline, diesel and kerosene, in the fourth quarter on the back of an improving economy.

Fuel stocks held by Sinopec Group and CNPC, which operate a majority of their businesses via listed Sinopec Corp and PetroChina respectively, fell for the second month in a row in September, despite record crude throughput, partly indicating healthier fuel demand.