Second-quarter oil production forecast healthy

13:53, April 26, 2010      

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Refined oil output is expected to continue to grow steadily in the second quarter, reserves will remain high and the market supply will generally be ample, according to a report released by the National Energy Administration (NEA) on April 24 reviewing the first-quarter energy situation.

The NEA estimated that China's apparent refined oil consumption will stand somewhere between 54.7 to 55.7 million tons in the second quarter of 2010, an increase of about 5 percent from the previous year. As the domestic refining capacity will expand and the operating rate will remain at a high level, the second-quarter refined oil output will continue to grow steadily.

Although the refined oil consumption rose steadily in the first quarter, the refined oil supply apparently exceeded refined oil demand, according to the analysis by the NEA. Statistics show that the domestic refined oil sales volume was up by over 24 percent in the first quarter.

China's auto output and sales totaled up to 4.6 million units and a little over 4.6 million units, an increase of 77 percent and 72 percent, respectively. This has resulted in strong gasoline sales. In January, the monthly sales volume for gas was the highest it has been since the start of 2009.

However, China's three major oil companies, PetroChina, Sinopec and CNOOC, increased refined oil capacity by 33 million tons per year in 2009. The increase in refined oil consumption has been lower than the growth of crude oil processing capacity and refined oil output, so refined oil reserves, particularly diesel reserves, will remain at a high level.

The NEA expects diesel demand to enter a peak season in the second quarter as a result of continued economic recovery, accelerated industrial production, a sustained rally in the traffic and transportation industries and the coastal fishery industry's entry into the busy season.

Furthermore, with the weather warming up, the proportion of car trips will gradually rebound. The fast growth in auto sales in early 2010 will sustain the oil demand in the future.

By People's Daily Online


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