China’s crude oil output dropped to the lowest in more than six years as the country’s state-run energy giants continued to pump less from aging, high-cost fields.
Production during August in the world’s largest energy consumer dropped 9.9% from a year ago to 16.45 million tons, according to data from the National Bureau of Statistics on Tuesday, Bloomberg reported.
The volume is about 3.89 million barrels a day, the lowest since December 2009. Output is down 5.7% during the first eight months of the year.
“As crude prices fluctuate at a relatively lower level, there is no incentive for China’s high-cost producers to raise output any time soon,” Tian Miao, an analyst with policy researcher North Square Blue Oak Ltd., said before the data were released. Production will continue to decline through the rest of the year, he said.
Output from China has been sliding as state-run companies shut fields too expensive to operate after prices fell earlier this year to the lowest since 2003.
The country is forecast to lead production declines across Asia, helping tighten the global market as the world’s largest-consuming region relies more on overseas supplies.
China’s crude oil imports increased to the highest in four months in August to about 7.77 million barrels a day, according to data by the General Administration of Customs released last week.
The country’s biggest producer, PetroChina Co. cut its 2016 domestic crude output target to 103 million tons (about 2.06 million barrels a day), a drop of about 6% from the previous year, as it shuts some high-cost fields.
Production from China Chemical & Petroleum Corp., known as Sinopec, is on track to shrink by a similar amount to about 763,000 barrels a day, company forecasts show.
