WRAPUP 1-China's top refiners cut Dec runs to 20-month low

* Top dozen China refiners to cut output by 5 pct vs Nov

* At 2.31 mln bpd, refinery runs lowest since April 2007

* Run cuts show demand impact on world's No. 2 oil consumer

*
here

By Jim Bai

BEIJING, Dec 3 (Reuters) - China's biggest refineries are
set to cut production to the lowest in 20 months due to
brimming fuel stocks and weak demand, underscoring the impact
of the global economic downturn on the world's No. 2 fuel
consumer.

Twelve major plants accounting for over a third of China's
capacity, most of them on the eastern and southern seaboards,
plan to process 2.31 million barrels per day (bpd) of crude in
December, down nearly 5 percent from November, a Reuters survey
of company pfficials and industry sources showed on Wednesday.

It was the second monthly decline since the runs survey hit
a record high in October, when refiners were still running hard
after the Olympics. Throughput dipped 6.2 percent last month,
according to revised estimates from industry sources.

While official data on November runs will only be released
in about two weeks, the figures are a strong signal of the
unexpectedly sharp deterioration of demand in China, despite
hopes that it might weather the global economic turmoil better
than Western nations, where oil use is already contracting.

"There is no denying that the double whammy of slower GDP
growth in the third quarter and the untimely June 20th domestic
price increase had a dramatic effect on the demand destruction
in China," independent analyst Paul Ting wrote in a Dec 3
report.

"The rate of demand destruction in this period actually
surpassed the US decline rate."

NOT WHOLLY A SURPRISE

But the lower refinery runs aren't entirely a surprise, as
Asia's top refiner Sinopec Corp (SNP.N) had warned back in
September that it would cut crude imports by 10 percent in the
fourth quarter and reduce operations at its plants, despite
improving profit margins as global crude price dived.

Sinopec and other refiners have also pushed back the
start-up of major new refineries until next year, although
PetroChina (0857.HK)(601857.SS)(PTR.N) commissioned new
facilities at Dalian, China's largest refinery, in October.

Even after the expansion, however, Dalian will cut December
crude throughput by around 5 percent to 294,400 bpd, deepening
curbs it began last month on concerns about declining demand
and falling prices in petrochemical products.

Sinopec (0386.HK)(600028.SS)(SNP.N), Asia's top refiner,
intends to slash December crude runs at its largest plant,
Zhenhai, by around 16 percent after a sizable reduction in
November, partly due to planned maintenance. [nPEK282161]

It will also trim processing at its Jinling plant by 14
percent and rates at its second largest refinery, Maoming, by
about 5 percent this month.

"Insufficient fuel consumption and slumping petrochemical
prices were also behind the cut," a Jinling company source told
Reuters.

Refinery officials said fuel stocks were mounting despite
reduced operating rates because the slowing local economy and
worsening global outlook had dampened demand.

Gasoline and diesel stockpiles held by China's two oil
giants, Sinopec Group and CNPC, rose to record highs of 33
million and nearly 47 million barrels at the end of October,
the official Xinhua news agency reported on Tuesday.
[ID:nHKG260324]

And China's big refiners have swiftly reversed the flow of
imports that reached record levels in anticipation of healthy
Olympics demand, and will instead export 150,000 tonnes of
diesel in December, its highest since May 2007. 1[nSP257153].

On top of that, some refiners are hedging their bets ahead
of an expected overhaul of the country's regulated fuel pricing
and tax structure that could affect their bottom lines.

"We desperately want to know how things are going to look
after the reform. For now there hasn't been much change in
activity because people don't have any idea what's going to
happen with the new pricing and tax," one industry source
said.
=======================================================
PLANT DEC RUNS NOV RUNS REFINING CAPACITY

(bpd)
=======================================================
Zhenhai 301,400 360,100 400,000
Maoming 249,600 262,800 270,000
Qilu 200,200 199,500 200,000
Gaoqiao 186,000 182,500 230,000
Guangzhou 214,300 211,700 270,000
Jinling 195,500 226,300 270,000
Dalian 294,400 309,000 410,000
Lanzhou 204,800 206,800 200,000
Fujian 65,700 65,700 80,000
Jinzhou 113,000 119,200 140,000
Jinxi 117,700 119,200 150,000
WEPEC 164,800 164,800 200,000
========================================================
TOTAL* 2.31 2.43 2.82

*in million bpd.

(Editing by Jonathan Leff)