Published 11:56 IST, January 30th 2020
Asian rivals face gloom as China is set to expand oil refining capacity
China is reportedly going to expand its crude oil refining output in 2020, giving support to oil prices on a global level, specifically the United States
China is reportedly going to expand its crude oil refining output in the year 2020, giving support to oil prices on a global level, specifically the United States. According to reports, China's decision may result in a problem for Asia's troubled oil refining industry. According to reports, China added a total of 800,000 oil barrels per day in the year 2018 and may add an additional 460,000 barrels per day in the year 2020.
Chinese imports could result in pressure on Asian markets
Chinese exports of things such as diesel, gasoline and fuel used in jets soared to an increase of 20% in the year 2019, with far-reaching effects on countries such as Italy, Nigeria and Mexico. According to reports, the Asian benchmark of oil refining margins for diesel and fuel used in jets are at a low and an increase in Chinese exports could result in more pressure on the Asian market.
An oil consultant with Facts Global Energy Group (FGE), Chen Jiyao reportedly said that an increase in supplies of products will leave behind the demand growth of fuel used in transportation and added more pressure on the already weak areas. Experts think that jet fuel and gasoline will be at the forefront of China's export growth in the year 2020 due to increase in supplies and sluggish domestic consumption, with the viral outbreak of the coronavirus that has claimed the lives of 170 people.
China is Asia's top gasoline exporter
According to reports, China is Asia's top exporter of gasoline and aviation fuel and is at the third spot in terms of diesel after India and South Korea. Experts are of the opinion that combined Chinese exports of diesel, gasoline and aviation fuel will most likely maintain the growth in double digits in the year 2020.
According to reports, jet fuel is set to be at the top in terms of exports with a 20 per cent increase. The 20% increase will be due to a rapid expansion in production on a domestic front vs a declining demand growth. The travel ban in order to curb the coronavirus outbreak will result in a decline in consumption of jet fuel. Although, exports of gasoline and diesel will be capped as refiners plan to shift production to make clear fuels in order to meet the new international standards that came recently came into effect.
Updated 11:56 IST, January 30th 2020