China Could Cut Fuel Exports in October as Inventories Plunge
China could lower its fuel exports again in October, potentially tightening the global fuel market further, as domestic gasoline and diesel inventories have slumped to multi-year lows. China’s fuel exports recovered in August as refiners exported 6.01 million tons of petroleum products, up by 12.7% from a year earlier, after Beijing removed in mid-July restrictions on fuel exports that were in…
China may reduce fuel exports in October, potentially exacerbating global fuel scarcity, as domestic gasoline and diesel inventories hit multi-year lows, according to GL Consulting, a consultancy based in MySteel. In August, fuel exports rebounded by 12.7% from the previous year, reaching pre-war levels, after Beijing lifted export restrictions following the Strait of Hormuz blockage.
Jet fuel exports reached an all-time high in the month. However, October exports could decline due to the seven-year-low gasoline and diesel inventories in China, the consultancy reported. With domestic supply already scarce and domestic demand growing, refiners are expected to prioritize the domestic market, redirecting barrels that would otherwise have been exported back to China.
This shift is driven by recent fuel exports surges and strong domestic fuel demand. The tight inventories are expected to persist through the end of October, as demand is bolstered by the increased exports and robust domestic consumption. The reduction in Chinese fuel exports could further tighten already strained global fuel markets, exacerbated by constraints in the Middle East and Russia.
The tightening markets have driven refining margins and retail fuel prices to record highs, particularly in the United States.
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