China Crude Output Drops to 14-Month Low; Coal Mining SlowsBloomberg News
China oil production fell 5.6% to 16.59 million tons in April
Coal output declined 11% from year ago to 268 million tons
China’s domestic oil production slumped to the lowest in 14 months and coal output declined by the most in at least a year.
The world’s second-largest oil consumer reduced crude output in April by 5.6 percent from a year ago to 16.59 million metric tons, the lowest since February 2015, according to data from the National Bureau of Statistics. The biggest decline since November 2011 pushed daily average output down to 4.05 million barrels. Coal production fell 11 percent to 268 million tons. That’s the biggest slump in data going back to April 2015, when the bureau resumed releasing coal production figures.
The cut in domestic oil production comes as the nation continues to increase imports to meet record refining demand. China’s inbound crude shipments in April rose 3.2 percent from the previous month, and near the February high, and daily oil processing increased to a record during the month. The government’s efforts limiting coal output is gradually taking effect, which may boost coal prices, according to Deng Shun, an analyst with ICIS China, a commodity researcher.
“With cheaper imports and declining yields at domestic oil fields, we’re seeing an inevitable trend of falling output,” Amy Sun, analyst with ICIS-China said by phone. “Declining crude production is in line with the government’s forecasts.”
High costs, reduced capital expenditure and mounting decline rates in the mature fields that have supported China’s domestic production for decades have combined to pull output down, according to a Standard Chartered Plc report published earlier this month. PetroChina Co., the country’s biggest producer, sees oil and gas output falling the first time in 17 years as it shuts fields that have “no hope” of profits, Wang Dongjin, the company’s president, said in March.
Coal demand in China has slid as its economy slows and shifts toward consumer-led growth, while the government seeks to cut industrial oversupply and curb pollution. The nation aims to reduce coal’s share of its energy consumption to 62.6 percent this year, from 64.4 percent last year.
— With assistance by Sarah Chen, and Jing Yang