PetroChina cuts crude runs as coronavirus hits demand

Chinese state-run energy giant Sinopec, Asia’s largest refiner, is cutting its throughput by 600,000 bpd, or 12 percent of its average crude runs, its deepest reduction in more than a decade. (AFP)
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Updated 11 February 2020

PetroChina cuts crude runs as coronavirus hits demand

  • State refiner in talks with suppliers such as Saudi Arabia and UAE about deferring cargo loadings

SINGAPORE: PetroChina, China’s second-biggest state refiner, plans to reduce its crude throughput by 320,000 barrels per day (bpd) this month versus its original plan as the coronavirus hits fuel demand, a company official told Reuters on Monday.

PetroChina’s planned February cut is equivalent to about 10 percent of the refiner’s average production rate of about 3.32 million bpd.
This would bring total production scalebacks by state refiners, include Sinopec Corp. and China National Offshore Oil Company, to about 940,000 bpd for this month.

The cuts from PetroChina are likely to be deepened to 377,000 bpd in March, said the senior company official with direct knowledge of the matter. He declined to be named as he is not authorized to speak to the press.

Reuters reported last week that Sinopec Corp, Asia’s largest refiner, is cutting its throughput this month by 600,000 bpd, or 12 percent of its average crude runs, its deepest reduction in morer than a decade. Independent Chinese refiners in Shandong, meanwhile, have slashed output to below half their capacity.

“The production cuts are mostly on refineries in northeast and north China, where demand is hit harder than in the western parts of the country,” said the PetroChina official.

PetroChina started the production cuts at the beginning of the month, but deepened them on Monday, the official said.

PetroChina did not immediately respond to a request for comment.

PetroChina is talking with its key long-term suppliers such as Saudi Arabia, Kuwait and the UAE about possibly deferring cargo loadings or trimming loading volumes, the official said, without giving further details.

“We’re monitoring the market on a daily basis. But from what we’ve observed now, there seems little chance for a fuel demand recovery in March,” the official said.


S&P downgrades trio of Dubai developers as pandemic hits property and retail

Updated 51 min 11 sec ago

S&P downgrades trio of Dubai developers as pandemic hits property and retail

  • Gulf states are being hit hard by the coronavirus pandemic that has come at a time of weak oil prices

RIYADH: The credit ratings of three Dubai property companies were downgraded by S&P as the coronavirus pandemic hits confidence in the retail and real estate sectors.
S&P Global Ratings reduced the credit ratings for the real estate developer Emaar Properties as well as Emaar Malls to +BB from -BBB with a negative forward outlook, adding that it sees a “weakening across all its business segments” in 2020. S&P also cut its rating for DIFC Investments to +BB from -BBB, while keeping a stable outlook.
Gulf states are being hit hard by the coronavirus pandemic that has come at a time of weak oil prices, heaping pressure on governments, companies and employees.
The ratings agency expects the emirate’s economy to shrink by 11 percent this year
“The supply-demand imbalance in the realty sector appears to have been exacerbated by the pandemic. We now expect to see international demand for Dubai’s property to be subdued, and the fall in residential prices to be steeper than we had expected, lingering well into 2021” S&P reported.
Despite easing restrictions and the opening of the economy, S&P said that overall macroeconomic conditions remained challenging.
Global travel restrictions and social distancing constraints “significantly weigh on Dubai’s tourism and hospitality sectors” the rating agency reported.
Still, Dubai’s tourism chief was upbeat on the emirate’s prospects when international tourism resumes.
“Once we do get to the other side, as we start to talk about next year and later on, we see very much a quick uptick. Because once things normalize, people will go back to travel again,” Helal Al-Marri, director general of Dubai’s Department of Tourism and Commerce Marketing told AFP in an interview.