China Has Refined Taste for Oil -- Heard on the Street - WSJ - WSJ: ".... The bigger problem is that China has built more refineries than it needs. These processed 9% more volume in September than the year before, outstripping consumption growth. Though its state oil giants have somewhat curbed their expansion plans, eight refineries have added or will add capacity this year, with three more next year, notes Mr. Szpakowski.
This overcapacity is getting pushed onto the rest of Asia, just like in other commodities such as steel. That has hurt refiners especially near China, such as South Korea’s S-Oil and SK Innovation . And there is likely more pain, as refining margins temporarily buffered by cheaper crude get competed away.
Though China is inflicting pain on the products market, crude-oil bulls should also be worried. If the country cuts its refining capacity down the road, it won’t need that much crude. And while some of the imported crude may get gobbled up by China’s strategic petroleum reserve, there are constraints there, too...."
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