China plays a significant role in the global balance of demand-and-supply for petroleum. China is the world’s second largest crude oil consumer and the fourth largest petroleum producer.

Statistics released by the National Bureau of Statistics show that China produced 51.55 million tons of crude oil in the first three months of 2016, with a year-on-year decrease of 1.78 percent. The production volume in April slumped to the lowest point since February 2015. Meanwhile, the number of oil refineries that started business in April increased by 2.4 percent from last month. The demand for crude oil reached a new record high of 10.93 billion barrels per day.

According to Neil Beveridge, a Hong Kong-based analyst at Sanford C. Bernstein & Co. in an interview with Bloomberg, the production decline “will help rebalance the market and will be positive for prices.”

"We expect faster-than-expected declines, which will increase imports and heighten long-term energy-security concerns," Beveridge added.

China has to increase oil importation to meet the demand of oil refineries as the country experiences a plunge in oil output. Statistics indicate that the import volume of crude oil in April increased 3.2 percent compared with March, close to the highest point in February.

Apart from China’s influence, wildfires in oil harvesting sites in Canada and riots in Nigeria have also had a negative impact on global oil prices. The average price worldwide is now $45 per barrel.

In a report by Bloomberg, Gordon Kwan, head of Asia oil and gas research at Nomura Holdings Inc. in Hong Kong, said that China’s production decline, together with that of the U.S. shale patch, will help to rebalance the oil market in late 2016, as global demand continues to hit all-time highs.

China’s production decline is mostly driven by PetroChina Co.’s flagship Daqing field and China Petrochemical Corp.’s mature oil fields, Kwan said.

High costs, reduced capital expenditure and declining rates in mature fields are conspiring to pull output down, Standard Chartered Plc. said in a report earlier this month.