China reduces oil product export quotas in Q2
Source: www.chinamining.org Citation: Reuters Date: May 15, 2015
China has cut the pace at which it is allowing Chinese refiners to ship out oil products this year by more than 40 percent, traders familiar with China`s oil markets said Wednesday.
China controls oil product exports through quotas for State-run refiners, which it issues after assessing domestic needs. Authorities made the latest change after their second quarter review of annual export volumes.
Sinopec Corp, CNOOC Ltd and China National Petroleum Corp were given an additional oil product export quota of 5.6 million tons for the year, down from the 9.75 million tons initially awarded for the year in the first quarter.
The State refiners could not be reached for official comment on the matter.
The refiners can usually apply for more allowances once initial quotas are used up. The quotas are typically given every quarter after a review of domestic supply and demand balances.
The drop in the volumes issued this quarter are likely due to expectations of lower operating rates, high domestic prices and high inventory, traders said.
"Stronger domestic gasoline prices, which had tripled in the last two months, and a cut in refining capacities could have prompted the quotas to be revised down," one of the traders said.
Through April, Chinese refineries have been running at near-record levels of around 10.5 million barrels per day, according to data from the National Bureau of Statistics, but traders are expecting a heavy refinery maintenance season this month.
The largest drop in the quarterly quota issue was in gasoline, with the allowance cut by nearly half to 1.4 million tons.
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