Rise in Covid-19 leads to fall in China's refinery runs

We expect China to process about 1.5 million b/d less crude oil in February, versus January, due to measures to contain the Covid-19 outbreak. The cuts at refineries are in response to lower products demand and logistics and supply chain bottlenecks. Currently, we expect the restricted land movement and product offtake constraints to ease from mid-March. Jet fuel will be a main deciding factor for cuts in crude runs as it has been hit the hardest on the demand side and has the lowest refinery yields among all impacted products. We expect 1% of jet fuel yield to be shifted to gasoline and diesel/gasoil, resulting in lower exports. Gasoline will be the most affected export product, with exports forecast to fall by 250,000 b/d in February versus January. This could turn Asia’s gasoline market tight, supporting gasoline product cracks and imports from outside the region. We expect West African crudes to be the most impacted from this disruption while other sources will be less affected.