A Glance of China Oil Market 20260706

Weekly News

China natural gas market to face rising supply in Jul

China's natural gas market is set for a notable shift toward a looser supply-demand balance in July, with steady supply growth and persistent demand weakness. Supply is expanding from both pipeline natural gas (PNG) and LNG imports. PetroChina added 50 million cubic meters of supply beyond contracted volumes, while auction prices in multiple regions remained below Yuan 3.50/cubic meter. Meanwhile, the partial reopening of the Strait of Hormuz has allowed Qatari and other LNG cargoes to arrive, boosting terminal send-out capacity and effectively plugging supply gaps. 

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Supply-demand dynamics reverse, China low-sulfur residual fuel oil/bitumen prices on a rollercoaster ride

China's low-sulfur residual fuel oil/bitumen market experienced a sharp inverted "v"-shaped price swing in June. Prices surged by Yuan 312/t to Yuan 5,037/t in the first half on geopolitical premiums and supply tightness, before plunging Yuan 330/t to Yuan 4,707/t in the second half as geopolitical risks faded and downstream demand collapsed. Monthly sales volume fell 22.50% to 203,500 tonnes, a new low for the year.   

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China's butadiene industry to eye 560 kt/y new capacity in H2 2026

China's butadiene capacity is poised for significant expansion in the second half of 2026, with three new projects totaling 560,000 t/y scheduled to come on stream. This would lift the national nameplate capacity by 7.38% year-on-year. The total butadiene capacity is expected to exceed 3.30 million t/y by the end of the year. In the second half of the year, PetroChina Dushanzi Petrochemical will bring online its phase-II 120,000 t/y butadiene unit in the third quarter, and it's 100,000 t/y supporting polybutadiene unit will come online simultaneously.

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