Third quarter oil supply stability

The National Development and Reform Commission disclosed data that since the beginning of this year, the production and operation of the domestic oil industry has been generally good and the market supply and demand have been stable overall. Crude oil production totaled 151.83 million tons, a year-on-year increase of 1.6%, while refined oil consumption reached 180.43 million tons in the first 9 months. The increase in the first three months gradually narrowed.

According to data from the National Development and Reform Commission, domestic production is basically stable in terms of crude oil supply. Since the beginning of this year, the high international oil prices have fluctuated widely, and domestic crude oil imports have been affected. The growth rate in the second quarter was down 5.6 percentage points from the first quarter. After the third quarter, imports increased, growing by 9.4%, which was 2.6 percentage points higher than that in the second quarter. However, on the whole, crude oil imports still showed a growth trend. According to the data, the import volume of crude oil in the previous September was 18897 tons, which was a year-on-year increase of 9.5%.

In terms of demand, the increase in refined oil consumption has narrowed. The National Development and Reform Commission explained that due to factors such as sustained economic growth and high level of automobile production and sales in the first quarter, demand for refined oil products was strong, but with the slowdown in automobile sales and other factors, the growth rate of refined oil consumption began to slow down.

It is worth noting that domestic refined oil inventories have significantly declined. The highest level of refined oil stocks at the end of February was 15.61 million tons, which fell back to 11.48 million tons at the end of September. Lin Boqiang, director of the China Energy Research Center at Xiamen University, pointed out that inventory has dropped significantly and the growth of refined oil consumption has narrowed. While the domestic crude oil production capacity and imports have been stable, the relationship between supply and demand has been analyzed. This means that domestic crude oil exports have increased significantly.

■ Linked to private oil companies in some areas appear to have “broken oil”

A few days ago, there were reports that some privately-run refined oil wholesale and retail companies in some parts of the country recently encountered the “oil cut” dilemma. Many domestic private oil companies are unable to obtain normal oil supply from PetroChina and Sinopec in the face of a time when refined oil prices have just been lowered.

Zhao Youshan, chairman of the China Circulation Trade Committee’s Oil Distribution Committee, said in an interview with reporters that oil circulation in some parts of the country has appeared to be “broken oil” and has affected the current autumn harvest. If the relevant state departments do not timely supervise, this severe situation will trigger the recurrence of large-scale oil shortages.

In response, Lin Boqiang, director of the China Energy Research Center at Xiamen University, said yesterday that "at present, with the stable domestic oil production capacity and relatively modest international oil prices, the two major oil giants should not tighten up the supply of refined oil to private enterprises."

As to whether there will be "oil shortage" problem, Lin Boqiang said that because private oil companies account for a small market share, the status of private oil companies alone will determine whether the "oil shortage" will appear, the persuasive power is not strong. Whether there will be "oil shortage" depends on the domestic electricity situation. “The lack of electricity will be a shortage. From the perspective of the domestic situation this year, there will be an 'electricity shortage' in the forced power cuts in many places. I am afraid that the refined oil supply this winter will still be less optimistic.”