Saturday June 02, 2007

Oil may reach $70 as China imports rise on stockpile : CLSA

peakoil.com -> bloomberg.com :

Oil may reach $70 a barrel as China starts filling its emergency crude storage tanks, boosting the nation's imports to a record in March, CLSA said. The nation imported a record 13.86 million metric tons (3.3 million barrels a day) of crude in March. China, the world's second-biggest energy consumer, is building storage tanks along its coast to protect against international price fluctuations and supply disruptions. The nation's strategic oil reserves will have an equivalent of 30 days of imports by 2010, Chen Deming, vice chairman of the National Development and Reform Commission, said.

China is building storage tanks in the eastern cities of Zhenhai, Zhoushan and Huangdao, and in the northern city of Dalian. The terminals are set to be completed by 2008. China started filling its first storage facility, in Zhenhai, in August and the terminal has 24 million barrels of oil now, Kwan said. The nation has completed the building the Zhoushan facility. The International Energy Agency, an adviser to 26 oil-consuming nations, recommends its member countries maintain a stockpile level of 90 days of net oil imports.

"Assuming China will want to accumulate 3 months of consumption for the strategic petroleum reserve, this could amount to 630 million barrels of extra demand in the next two years, or about 863,000 per day," said Gordon Kwan, head of China oil and gas research, CLSA. That is the equivalent of the daily production of the Daqing oilfield, Asia's largest, he said. China will build oil stockpiles in areas with convenient transportation access and close to refineries where crude oil can be processed and turned into fuels, Chen said.

See also :

1. ASEAN, China, Japan, South Korea mull oil stockpile
2. China's first strategic oil reserve facility to be ready in August [2006]
3. China starts filling strategic oil reserve
4. China and Saudi Arabia: interesting SPR team up?

(2007-06-02 11:30:42 SGT) [Energy] Permalink

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