CHINA DATA: Crude throughput rises 1.3% on year in Q1 as GDP expands 5.3%

China's crude throughput rose 1.3% on the year to 14.7 million b/d in the first quarter of 2024, when its gross domestic product expanded 5.3%, National Bureau of Statistics data released April 16 showed.

This came as China's crude throughput edged 0.5% higher in Q1 from 14.63 million b/d in Q4 2023, while the economy grew 1.6% over the same period.

"China's shift toward a more service-oriented economy, the development of alternative energy and efficiency gains are weakening the correlations between GDP expansion and oil demand growth," said Sijia Sun, associate director at S&P Global Commodity Insights' downstream research and analysis.

S&P Global forecasts China's real GDP growth at 4.7% and 4.5% in 2024 and 2025, respectively, while China's oil demand growth in 2024 is anticipated to reach 530,000 b/d, or 3.2% -- slower than the 6.6% in 2023.

In March, the government set a 5% economic growth target for 2024. However, S&P Global considers the property market to be a significant challenge for growth.

The NBS releases data in metric tons, which S&P Global converts to barrels using a conversion factor of 7.33. In metric tons, the throughput over January-March was 2.4% higher on the year at 182.46 million mt.

China processed a five-month high of 15.08 million b/d of crude in March, rising 1.3% on the year, NBS data showed.

Chinese refineries boosted throughput in March after the Lunar New Year holiday due to a rise in domestic demand. They also opted to increase production ahead of the maintenance season in Q2 to secure domestic supplies.

Average utilization rates at 51 state-owned refining plants covered by S&P Global rose by one percentage point to a six-month high of 83.4% in March, compared with 82.4% in February, while the private refining complex kept run rates at high levels ahead of scheduled maintenance at two mega refineries.

S&P Global expects crude runs to decline in April, driven by concentrated maintenance activities in both state-owned and mega-independent refineries, and the average runs in Q2 to increase slightly by 48,000 b/d from the previous quarter.

Two state-owned refineries, as well as two private mega refineries, will enter maintenance in April.

March crude output hits eight-year high

In the upstream sector, China's oil giants continued their investment efforts to boost production for the country's energy security, leading production in March to hit an eight-year high of 4.34 million b/d.

The previous high, according to NBS data, stood at 4.36 million b/d in September 2015.

China's crude production averaged 4.31 million b/d in the first three months, rising 1.3% on the year, NBS data showed.

"We will continue to see China's crude production growth as oil companies keep [the] majority of their capital expenditures upstream to lift reserves and increase output," a Beijing-based analyst said.

PetroChina targets spending Yuan 213 billion ($29.43 billion) upstream, accounting for 82.6% of its capex in 2024, while top refiner Sinopec has set 45% of its 2024 budget, or Yuan 77.8 billion, for exploration and production.

CNOOC, the offshore oil giant and the main contributor to China's crude output growth, targets spending Yuan 125 billion-135 billion in 2024, up from Yuan 129.6 billion in 2023 and Yuan 102.5 billion in 2022.

S&P Global projects China's crude oil output to rise 2.8% to 4.3 million b/d in 2024.

China's crude output, throughput (million mt):

Source: China's National Bureau of Statistics