{"id":20366,"date":"2016-05-02T05:36:35","date_gmt":"2016-05-02T10:36:35","guid":{"rendered":"http:\/\/olduvai.ca\/?p=20366"},"modified":"2016-05-02T05:36:35","modified_gmt":"2016-05-02T10:36:35","slug":"why-china-is-really-dictating-the-oil-supply-glut","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=20366","title":{"rendered":"Why China Is Really Dictating the Oil Supply Glut"},"content":{"rendered":"

Why China Is Really Dictating the Oil Supply Glut<\/a><\/h3>\n
Ship tracking data\u00a0from Bloomberg<\/a>\u00a0shows that 83 supertankers carrying around 166 million barrels of oil are headed to China, which has stockpiled an impressive 787,000 barrels a day in the first quarter of 2016\u2014the highest stockpiling rate since 2014.<\/div>\n
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While the world was speculating about oil prices plunging to $20 and $10 per barrel, China was busy stockpiling its reserves.<\/p>\n

The chart below shows an increase in imports as crude prices collapsed. Since the beginning of this year, China has imported a record quantity of oil.<\/p>\n

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(Click to enlarge)<\/p>\n

Back in January 2015,\u00a0Reuters<\/a>\u00a0had reported that China planned to increase its strategic petroleum reserves (SPR) from 30 days to 90 days. In January 2016, it was revealed that China was building\u00a0underground<\/a>\u00a0storage to complement its above-ground storage tanks.<\/p>\n

The Chinese urgency points to two things. China believes that crude oil prices will not remain at the current levels for long, and that a disruption is possible due to geopolitical reasons, which can propel oil prices higher.<\/p>\n

As a net importer of crude, it is protecting itself against a black swan event and using the current low prices to fill its tanks. The filled up tanks will ensure a steady supply of crude for at least three months in case of a disruption.<\/p>\n

Does the record buying spree by the Chinese indicate a bottom in crude oil prices?<\/p>\n

That is difficult to conclude, but it does put a floor beneath the current lows, because in all likelihood, China will resume its record buying and top up its SPR if prices tank.<\/p>\n

The total Chinese imports in March via the very large crude carriers was 7.7 million barrels a day. Other than the supertankers, China also imports oil through pipelines and small tankers.<\/p>\n

…click on the above link to read the rest of the article…<\/p>\n<\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Why China Is Really Dictating the Oil Supply Glut Ship tracking data\u00a0from Bloomberg\u00a0shows that 83 supertankers carrying around 166 million barrels of oil are headed to China, which has stockpiled an impressive 787,000 barrels a day in the first quarter of 2016\u2014the highest stockpiling rate since 2014. While the world was speculating about oil prices […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[3],"tags":[130,588,3044,1650,4044,596,12794],"class_list":["post-20366","post","type-post","status-publish","format-standard","hentry","category-energy-2","tag-china","tag-oil","tag-oil-glut","tag-oil-imports","tag-oil-storage","tag-oil-supply","tag-rakesh-upadhyay"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/20366","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=20366"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/20366\/revisions"}],"predecessor-version":[{"id":20367,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/20366\/revisions\/20367"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=20366"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=20366"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=20366"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}