China's oil major Sinopec?reduced?its capital spending plan for 2020 and said it expected lower run rates this year because of the coronavirus outbreak, Reuters?reported, citing a company VP.

?Due to the impact of first and second quarter, our expectation of the full-year consumption of oil products will be negative growth,? Ling Yiqing?said?during an earnings call.

?In terms of refining utilization rates in the full year 2020, due to the impacts of coronavirus outbreak and exports, our whole year number will be affected,? Ling added.

Reuters notes that Sinopec reduced the run rates at its refineries to 66 percent in February, at the height of the coronavirus outbreak.

The company said it would reduce its spending for the year by 2.5 percent, to some $20.2 billion, with the cuts landing mostly on its downstream operations.

?Due to the coronavirus outbreak, Sinopec is adjusting the 2020 production and operation plans in accordance to market trends,? the company said in a statement for the Shanghai Stock Exchange?quoted?by Reuters.

In the upstream segment, however, Sinopec plans to maintain oil production and increase natural gas production. To this end, the company will spend $8.6 billion (61.1 billion yuan) on upstream exploration and production, with a focus on one oil field in northwestern China and two shale gas fields in southwestern China.

The spending cuts will be in the company's oil refining business while investments in petrochemicals will increase by $1.4 billion (9.9. billion yuan), Sinopec also said.

Earlier this month, the South China Morning Post?reported?the low oil price environment that has pressured the profits of Sinopec, and its peers might prove to be a boon to independent refiners.

?They are rushing to place orders to take advantage of the low price,? one Chinese analyst said. ?The benefits will become clear from April when deliveries arrive.?

By Irina Slav for Oilprice.com

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