(Reuters) -Canada’s Imperial Oil reported a lower third-quarter profit on Friday as a slump in refining margins and lower commodity prices offset higher production.

Global oil prices dropped during the quarter on weaker-than-expected demand from top importer China and concerns about an oversupply in the market.

Benchmark Brent crude averaged $78.30 a barrel in the reported quarter, nearly 9% lower than last year, while the U.S. WTI was down 8.3%, weighing on earnings for oil and gas companies.

Imperial Oil’s overall production averaged 447,000 barrels of oil equivalent per day (boepd) in the third quarter, up from 423,000 boepd.

Meanwhile, refinery throughput volumes fell to 389,000 barrels per day (bpd) from 416,000 bpd, reflecting the impact of turnaround activities at the Nanticoke and Strathcona refineries, the company said.

Refinery utilization in the third quarter fell to 90% from 96%.

Imperial Oil’s net profit fell to C$1.24 million ($890,484.74), or C$2.33 per share, in the quarter, from C$1.6 billion, or C$2.76 per share, a year earlier.

($1 = 1.3925 Canadian dollars)

(Reporting by Seher Dareen in Bengaluru; Editing by Shounak Dasgupta)