WRAPUP-China refiners to lift April crude runs on demand hopes

By Jim Bai and Eadie Chen

BEIJING, April 7 (Reuters) - China's top refineries will
increase production rates in April for the second time in six
months, with more signs appearing that a bottoming economy may
soon revive oil demand and alleviate high stocks.

Twelve major plants, accounting for over a third of China's
capacity and most of them on the eastern and southern
seaboards, plan to process 2.43 million barrels per day (bpd)
of crude in April, about 3 percent more than the 2.36 bpd in
March, a Reuters poll showed.

The April level would represent 86 percent of total
refining capacity, much higher than December's 80 percent,
though still far below the nearly full-throttle operations in
last summer when Beijing was readying itself for the Olympics.

For a history of crude runs by these plants, click:
here

"On the macro economic front, there are increasing signs
that the economy might have bottomed out, which will surely
boost fuel consumption," said Jiang Xuefeng, a senior analyst
at CNPC Research Institute of Economic and Technology.

One of China's major producing indicators, the official
purchasing managers' index (PMI), crossed back into
expansionary territory in March for the first time since last
September while bank loans extension far exceeded market
expectations.

Senior officials took these as positive signs that the
economy may have started to warm up and that China's economic
stimulus measures had created demand. [ID:nPEK25397]

CNPC's Jiang said that thanks to a pick up in producing
activity, diesel demand increased greatly in March while
kerosene sales expanded by a double-digit pace last month.

"March's inventory for oil majors should have dropped a lot
from February's level," he added.

Gasoline inventories held by CNPC and Sinopec fell 2.7
percent at the end of February to 31.9 million barrels while
diesel stocks dipped 0.2 percent to 53.7 million barrels, the
first decline in months, according to a publication by the
official Xinhua news agency. [ID:nPEK363036]

Jiang also cited recent booming auto sales as a potential
contributor to gasoline consumption in the coming months.

China's car sales in February surged by 24 percent from a
year earlier after it took over the United States as the
world's No.1 auto market in January as Beijing rolled out a
series of incentives to stimulate the industry. [ID:nSHA334556]

Su Shulin, Sinopec's chairman, said last week that the
firm's daily fuel sales have increased some 13 percent from
December to around 317,000 tonnes in March.

Analysts said China's recent pump price hikes gave refiners
a higher profit margin, giving them an incentive to produce
more.

Sinopec (600028.SS) (0386.HK) has said it planned to
process 10 percent or 300,000 bpd more crude this year than
2008.

"The price rise is tipping wholesalers to stock more
products to avoid excessive cost in the future when prices rise
further, which is good for refiners to deplete stocks," said
Yang Wei, an oil analyst at Guotai Junan Securities.
=======================================================
PLANT APR RUNS MARCH RUNS REFINING CAPACITY

(bpd)
=======================================================
Zhenhai 415,000 415,000 400,000
Maoming 267,700 229,600 270,000
Qilu 163,000 209,600 200,000
Gaoqiao 209,300 204,400 230,000
Guangzhou 219,000 223,700 270,000
Jinling 253,100 228,700 270,000
Dalian 255,500 243,000 410,000
Lanzhou 214,000 211,900 200,000
Fujian 73,000 73,000 80,000
Jinzhou 107,100 92,000 140,000
Jinxi 70,600 70,600 150,000
WEPEC 182,500 155,400 200,000
======================================================
TOTAL* 2.43 2.36 2.82
*in million bpd.
(Editing by Ben Tan)
(eadie.chen@reuters.com; +8610 6627 1268; Reuters Messaging:
eadie.chen.reuters.com@reuters.net))