China’s crude oil production fell to its lowest on record in May, even as refineries in the world’s top buyer of crude churned out product at their fastest pace in nearly two years, data showed on Wednesday.
Crude output fell 3.7 percent in May from a year earlier to 16.26 million tonnes, or 3.83 million barrels per day (bpd), data from the National Bureau of Statistics showed on Wednesday. The figure is the lowest since the bureau began publishing records in 2011.
The drop in China’s crude oil output has slowed as major oil producers raised spending to boost production as oil prices have stabilized in a range between $48 to $55 per barrel. Analysts are forecasting flat or positive production growth for calendar 2017.
“Declining output this year comes as China’s major oil fields Daqing and Shengli announced production cuts at the beginning of the year. The pace of decline in production will ease this year due to higher crude prices,” said Gao Jian, a crude oil analyst with China Sublime Information Group.
PetroChina, the owner of China’s largest oilfield Daqing, said in December that it would slash capital spending on the field this year by 20 percent from a year earlier.
Crude runs, meanwhile, rose in May by 5.4 percent from a year ago to 46.62 million tonnes, or 10.98 million bpd. Overall throughput was down from a record reached in March, but May recorded the fastest rate of year-on-year growth since May 2015.
The refinery data highlights the concerns of a growing glut of gasoline and diesel in the domestic and Asian market even as demand slows. Sinopec Group, Asia’s biggest refiner, is considering cutting refinery runs in the third-quarter because of the excess fuel supply in the country.
Natural gas output in May dipped to its lowest since October, dropping by one-quarter from April to 12 billion cubic meters. However, compared to a year ago, production rose 10.5 percent.