China seems to have made history amid the crumbling oil market. For the first time ever, the country’s refinery has surpassed refinery crude processing in the United States as the country emerges from lockdown, even as U.S. fuel demand continues to plummet amid lockdowns.
Chinese refiners are cranking up runs as the country emerges from the two-month-long lockdown. In contrast, refinery runs in the U.S.
This is happening at a time when the global oil market is facing an unprecedented situation.
Meanwhile, refinery runs at U.S. refineries are plummeting, to the point that China is currently processing more crude oil at its refineries than the world’s top oil consumer, the United States.
According to the Oil Price, China’s independent refiners, commonly known as teapots, began to restore some curtailed production in March, taking advantage of the cheap oil amid the oil price war as the country started to lift lockdowns and ease travel restriction measures gradually.
At the same time, U.S. refineries are lowering utilization rates as demand for gasoline is at its lowest in decades while people work from home and practice social distancing.
In the week to April 10, refineries in the U.S. processed an average of 12.7 million bpd of crude. This compares with 13.6 million bpd a week earlier and 14.9 million bpd three weeks ago, the EIA said in its weekly inventory report last week, which showed a record crude oil inventory build of 19.2 million barrels.
“We are seeing fast and furious gasoline demand destruction. The latest data reveals demand levels not seen since spring of 1968,” AAA spokesperson Jeanette Casselano said at the beginning of last week.