A general view of storage tanks at a PetroChina commercial crude oil depot on February 8, 2012 in Tianjin, China.
Photograph by ChinaFotoPress via Getty Images

Even as the oil overhang eases, big oil is feeling the squeeze.

By Reuters
May 14, 2016

China, the world’s fourth-largest oil producer, pumped 5.6% less crude year-on-year in April, official data showed, as oil firms struggled with cost pressures with crude prices hovering around $40 a barrel.

Data from the National Bureau of Statistics released on Saturday showed China produced 16.59 million tons of crude oil last month, or about 4.04 million barrels per day (bpd), the lowest rate since July 2013 on a daily basis.

A global oil supply overhang has eased this month thanks to unplanned outages caused by wildfires in Canada and further losses in Nigeria and Libya.

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Deeper production cuts in China may give the market another boost.

Production in the first four months was down 2.7% over the same year-ago period to 68.14 million tons, or about 4.11 million bpd.

PetroChina, the country’s top producer, recorded a 0.2% drop in oil and gas production in the first quarter and Sinopec scaled back domestic crude production by 10.35% in the same period, companies said in April.

Offshore specialist CNOOC, however, delivered a 5.1% rise in total net oil and gas production in the first quarter over a year ago, thanks to new Chinese offshore fields.

Natural gas output last month rose 5.6% on the year to 10.6 billion cubic meters, with production up 5.3% in the first four months, the data showed.

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Consumption of the cleaner fuel has regained some pace after the government cut wholesale city-gate prices last November.

National crude throughput gained 2.4% in April versus a year earlier at 44.75 million tons, or 10.89 million bpd.

That compared to March’s runs at 10.58 million bpd.

Throughput in the first four months rose 2.9% on year to about 10.69 million bpd, according to the data.

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