Posted on 03/12/2008 1:07:09 AM PDT by TigerLikesRooster
China's oil reserve build-up adds to global demand
It plans a stockpile equivalent to 30 days' worth of imports by 2010
By Moming Zhou, MarketWatch
Last update: 6:40 p.m. EDT March 11, 2008
SAN FRANCISCO (MarketWatch) -- China's plans to build its strategic petroleum reserves to at least 100 million barrels by 2010 could add more pressure to crude prices which have already been at record highs. The world's second-largest oil consumer already has built two underground storage reserves in east China and will put into use two more storage bases soon, a senior Chinese official said over the weekend, according to China's official Xinhua news agency.
"Although China is not the only source of rising oil prices, it has consumed the largest share of the global increase in oil demand in the last seven years," said Donald Straszheim, chairman of Straszheim Global Advisors and an expert on Asian economies. "Building reserves will of course add more pressure on global oil prices."
China's goal is to build strategic oil reserves equivalent to 30 days of imported oil by 2010, says China's top economic planning administration. That's about 100 million barrels based on China's current import level and about 120 million in 2010 based on estimated growth rates
(Excerpt) Read more at marketwatch.com ...
Ping!
I sincerely would like to see China develop more new energy resources with new technologies. Although sharing is good, I don’t believe that it is good for the whole world to base its technologies so much on old western inventions.
Our various cultures are capable of some unique directions in development from different ways of thinking.
http://www.eia.doe.gov/neic/quickfacts/quickoil.html :
Total World Oil Production (2005)
82,532,000 barrels/day
Total World Petroleum Consumption (2005)
83,607,000 barrels/day
Given these facts, China building a 100Mbbl reserve amounts to only about 0.14% increase in worldwide demand. Not much to speak of, actually.
I think we should have kept them poor as long as possible.
The major situation here is that with the roaring economy now, oil demand has gone up so much since 2003.
Two countries: China oil demand went from 5.5Million bbl/day to over 8Million bbl/day now: increased demand by 45% in four years! Only 40 days of that increase would fill their reserves.
US: demand increased from 20 Mbbl/day to about 21 Mbbl/day... up about 5%.
Other countries’ demand increased uniformly during this time of good economic growth, too, thus higher prices.
People want lower prices? Either produce more oil, or use less, the shortcut to that being recession.
btt
With China and energy policy I see carrious (sp) vultures, not various cultures.
Apparently another factor in the big run up in oil prices is a new market mechanism called ETF’s, Exchange Traded Funds for oil. These have just started in the past year or two. They enable institutional investors, pension funds, etc. to make a major investment in oil, for a minimum investment of $4 million. These investments have grown from $9 billion to $250 billion in a relatively short time. I think you can check this out at USA Oil ETF. I don’t know how to do a link. Perhaps someone else can.
These may be responsible for as much as 20% of the current price of oil, which would make the corrected price about $80 a barrel.
Actually, the ETF designation is AMEX (USO)and if I understand what I just looked at, there is over $500 billion capitalization. I don’t do much with the stock market, so I might be misreading the abbreviations.
ping
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