Sinopec expects China’s oil demand to recover in second quarter, positive growth in 2022 By Reuters

© Reuters. FILE PHOTO: The logo of Chinese company Sinopec Corp is displayed during a news conference in Hong Kong, China March 26, 2018. REUTERS/Bobby Yip/

BEIJING (Reuters) – China’s Sinopec (NYSE:) Corp expects demand for refined petroleum products to pick up in the second quarter as the country’s COVID-19 outbreaks are gradually brought under control, and sees the oil consumption over the whole year achieve positive growth.

Asia’s largest oil refiner has cut refining cycles since the second half of March and is maintaining an “optimal” refining operating rate of around 85%, down from 92.6% earlier in the year , Sinopec officials said at a briefing on Thursday.

Cities across China, including the financial hub of Shanghai, have been placed on lockdown following a spike in COVID-19 cases, leading to road freight bottlenecks and port congestion.

“Anti-COVID measures have limited the consumption of refined petroleum products. But we expect oil demand to pick up gradually in the second quarter with the pandemic outbreak under control,” said Li Li, deputy head of the department. management of Sinopec’s operations.

“Right now, we’re confident about fuel consumption in China in 2022…Even if the recovery in the second quarter is moderate, growth for the full year will remain positive.”

Sinopec also expects its total liquefied liquid (LNG) imports to remain stable in 2022.

The company suffered a loss of 1.6 billion yuan ($243.58 million) on its 4.8 million tonnes of LNG imports in the first quarter, 1.2 billion yuan more than a year earlier due to high import costs.

Sinopec officials said the company is reducing its purchases of spot LNG cargoes and will focus more on futures contracts in the coming months.

($1 = 6.5686 renminbi)

Steve R. Hansen