Optimistic outlook: People walk in the Avenues Mall, the largest shopping centre in the capital. The state-owned oil company is optimistic about consumption in China, where it says there’s a sustainable and stable growth pattern for the longer term. — AFP
KUWAIT CITY: The start of the third section of Kuwait’s Al-Zour refinery was pushed back to the end of the summer after a technical glitch forced the facility to halt last month, Sheikh Nawaf Al-Sabah, the chief executive officer of Kuwait Petroleum Corp (KPC) says.
Comprising three mini-refineries, Al-Zour is one of the biggest oil-processing facilities being added across the Middle East and, once completed, will add 615,000 barrels a day to Kuwait’s refining capacity.
The third line was pencilled in to be up and running by June.
The state-owned company is currently operating the first two of three sections at Al-Zour, which were brought back online after a glitch hit power to the units and forced a two-week stoppage, Sheikh Nawaf said.
With the incident affecting crude intake at the refinery, KPC decided to instead divert it to exports. He added that the timing change isn’t uncommon.
“We expect this in the early phases of operation, especially for a world-scale refinery of this size.”
Organisation of Petroleum Exporting Countries (Opec) member Kuwait is optimistic about oil consumption in China, the world’s biggest importer, where it says there’s a sustainable and stable growth pattern for the longer term.
“While there are lots of changing headwinds, long-term growth patterns are all encouraging,” Sheikh Nawaf said, adding that “customers remain eager for supply”.
In the immediate term, due to conflicting economic news, there’s a lot of uncertainty, he said.
Questions about China’s economic growth have plagued markets since the start of the year after hopes of a strong post-Covid revival failed to materialise.
A key gauge for Chinese stocks flirted with bear-market territory on Tuesday as equity investors took a pessimistic view.
The majority of Kuwait’s sales are to Asian clients, and the Gulf nation said that it’s yet to lose any market share to other suppliers.
Oil is still around 10% lower this year as China’s lacklustre recovery and the US Federal Reserve’s aggressive monetary tightening weigh on the demand outlook.
Russian supply has also been resilient, even after the nation said it would cut output.
Traders will be on the lookout for further signals about supply from Opec and its allies (Opec+) before the group meets in June.
Opec+ last month announced a surprise oil production cut of more than one million barrels a day. Kuwait’s reduction was 128,000 barrels per day.
“The fundamentals are still okay, it takes time to see the voluntary cuts play out, and we haven’t seen the main numbers yet,” Sheikh Nawaf said. “Countries that went through with the voluntary cuts are taking it seriously.” — Bloomberg
