Deteriorating fuel demand drives Sinopec to mull 10% reduction in run rates

Driven by an economic slowdown that has depressed fuel demand, Asia's biggest oil refiner China Petroleum & Chemical Corp. (Sinopec) will bring down by 10%, its crude processing rates in November from peak levels of July. Total processing capacity will be toned down to about 15 mln tpa (3.65 mln bpd) from this month. This may not be the end of the reduction, as the company mulls further production cuts. Production cuts have been initiated this month despite an improvement in refining margins, because of dismal demand. China currently faces an economic slowdown, with the rate of growth in Q3 ebbing to its slowest pace since 2003. This news will surely put further downward pressure on global oil prices. Total oil-refining volume in China, at Sinopec, PetroChina Co. and privately owned plants, reached a record 30.3 mln tons in July and sank to 29.8 mln tons in October. China's diesel and gasoline imports shrank to a 7 month low in September.
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