Market Insights > First Look

First Look - Chinese refineries increase run rates

Oil is down more than $1 and heading for a weekly loss
- Oil traded in a wide range this week as the market braced for a potential Iranian attack on Israel
- Weak economic data from China weighed on prices this week, countering strong data from the US
Chinese independent refineries raise throughput
- Refiners in Shandong, also known as teapots, have boosted run rates to 50% of capacity, the highest level in four weeks
- State-owned refineries have kept throughput unchanged at 76.99% of capacity
- Oil demand in China is an ongoing concern for the market, as recent data showed consumption has weakened this year amid an economic slowdown in the Chinese economy

Natural gas is trading lower as prices head for a small weekly loss
- Weather forecasts indicate temperatures will be average to slightly below average over the next two weeks, which should keep power sector gas demand somewhat depressed
- Gas production has averaged 99.3 Bcf/d this week, well below summer highs of 101.4 Bcf/d
US gas drillers focus on volume cuts in Q2 earnings calls (S&P)
- Most shale drillers' Q2 reports showed production curtailments amid a sharp downturn in gas prices
- EQT and Chesapeake will continue to keep some volumes offline, while CNX confirmed a 16% increase in gas sales
- Prices for 2024 remain weak, potentially incentivizing producers to keep output lower through the end of the year