Chinese oil demand is forecast to reach record levels this year.
The state-owned China National Petroleum Corporation (CNPC) predict the nation’s requirements will grow 3.4% to reach almost 12 million barrels a day.
Combined with surging automotive sales and efforts to fill Strategic Petroleum Reserves with 90 days of forward cover, this has led refineries to ramp up production despite cautions from the CNPC that demand growth for these fuels will begin to slow, potentially resulting in a supply glut.
According to Reuters, demand slowing will be partially due to renewables becoming increasingly popular.
Total refinery throughput will rise by 3.3% to 11.2 million barrels a day, with refiners adding 702,000 barrels a day of net capacity. That’s likely to increase to 11.8 million by 2020.
The rising refinery demand will also lift crude imports by 5.3% to 7.95 million barrels a day, possibly reaching 8.2 million each day by 2020.
These rising refinery runs will maintain the domestic supply glut that has forced refiners to export into a saturated Asian market in recent years.
CNPC predict that net exports of diesel will surge by 55% this year to about 450,000 barrels per day.