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China's Oil Output Hits 5 Year Lows - Oil Market Daily

Summary

China's oil production falls to the lowest level in 5 years.

Current production is 3.95 million b/d.

We estimate that it falls to 3.8-3.85 million b/d by year end.

While everyone has their sights on US production and rig counts, China's oil (NYSEARCA:USO) production just dropped 8.1% from a year ago to 3.95 million b/d.

Source

China is currently the 6 th largest oil producing country in the world. The large year-over-year decline we are seeing was broadcasted to the world earlier this year when all of the major oil companies in China forecasted a drastic drop in capex spending. Guidance for production was also down for the year, so this shouldn't come as a surprise. In turn, we are also seeing China oil imports spike to new highs earlier this year before leveling off recently.

What can we expect from China?

If oil prices persist at current prices to the end of the year, we should see another round of capex cuts announced from China's major oil companies. We see China's oil production ending around 3.8 - 3.85 million b/d by year end, and we estimate that production will drop another 10% to 3.5 million b/d next year.

If oil prices rally back to $60 by year end, we see China's oil...


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