Refinery run rates in China fell for the seventh month in a row in October, shedding 4.6% on an annual basis, data from the country’s statistics agency showed, as quoted by Reuters.
As a result of the series of monthly declines, average refinery run rates for the first ten months of the year booked a 2% annual decline, for a daily average of 14.14 million barrels.
The Reuters report cited a Chinese consultancy as saying the decline was related to maintenance shutdowns and bankruptcies at three refineries owned by Sinochem. What’s more, independent refiners, the so-called teapots, operated at much lower than average rates in October, at some 58.7% versus 77% a year ago.
The lower refinery runs could be connected to softer factory activity in the country last month. According to fresh data cited by Reuters, Chinese industrial output grew rather robustly in October, at a rate of 5.3% but that rate was a dip on September, when activity grew by 5.4%. Analysts polled by Reuters had expected growth of 5.6% for October.
On the flip side, retail sales in the country booked a 4.8% increase in October, up substantially from the 3.2% growth rate registered in the previous month.
None of this could stop the decline in oil prices, however, as it was fueled by fresh demand projections from two of the most closely followed forecasters—the IEA and OPEC—which both had bearish news for traders this week.
Even so, the outlook for China’s growth remains positive, with a spokesman for the national Bureau of Statistics saying that government stimulus was already having a positive impact on growth.
“Changes in economic operations in September and October have strengthened China's confidence in achieving its 2024 target for economic growth,” Fu Linghui told Chinese media as quoted by Reuters.
By Charles Kennedy for Oilprice.com