The information provided on EL7.AI is for educational and informational purposes only and does not constitute financial advice.
The information provided on EL7.AI is for educational and informational purposes only and does not constitute financial advice.
Sign in to access this content
Sign InIn a move reflecting a sharp slowdown in the world's second-largest economy, China's oil refining activity saw a significant decline during June. According to reports, refinery throughput slumped by 17.7% year-on-year to 12.47 million barrels per day, the lowest processing volumes recorded since the onset of the Covid pandemic in March 2020. This collapse is driven by a combination of crude import disruptions caused by the Hormuz crisis and a significant slowdown in domestic fuel consumption.
This decline comes as China faces mounting deflationary pressures, with recent trade balance data showing mixed economic performance. Compared to last year, analysts suggest that weak Chinese demand represents a bearish headwind for global energy markets, especially following Chinese inflation data (CPI) which printed at 1% year-on-year on July 9, 2024, missing expectations of 1.1% per market data, further fueling concerns about the pace of economic recovery.
Investors should monitor upcoming economic releases to assess the sustainability of this drop in energy demand. In the absence of real-time instrument price data, focus shifts to the next International Energy Agency report and additional Chinese industrial output figures. Traders will also be watching the FOMC Minutes scheduled for release later today for signals on global monetary policy and its subsequent impact on commodity prices.