Indian refiners' crude throughput in November was the highest since February 2020, government data showed on Tuesday, as hopes of a steady uptick in demand at the world's third-biggest oil consumer prompted refiners to operate at full capacity.
Refiners processed 5.25 million barrels per day (21.48 million tonnes) last month, up 5.9 per cent from 4.96 million bpd in October, the data showed. On a year-on-year basis, throughput rose about 3.4 per cent.
"Refiners normally look at demand potential in the next few months and they still appear to be very optimistic about India's oil demand despite a recent dip," said Refinitiv analyst Ehsan Ul Haq.
They operated at an average rate of 104.61 per cent of capacity in November, up from 98.76 per cent in October, the data further showed.
India's fuel consumption fell in November after scaling a seven-month peak in October, as demand eased after the festive season.
Only if the Omicron coronavirus variant leads to a slowing economy and low demand for a number of months, could it lead to lower refinery runs, Ul Haq said.
Paris-based International Energy Agency said last week that a surge in new Covid-19 cases may temporarily slow, but not upend, a recovery in global oil demand that is underway.
India's November crude production, however, fell about 2.4 per cent to around 590,000 barrels per day (2.43 million tonnes) from the same month last year, but was little changed from October, the data showed.
Technical issues and delays at refineries and oil fields may have caused the dip, but higher natural gas output could be good for India's finances amid a rally in global gas prices due to an energy crunch, Ul Haq added.
Compared with November 2020, natural gas output jumped 23.1 per cent to 2.87 billion cubic metres, but was still lower than the targeted production of 3.29 billion cubic metres, data showed.
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