Oil reserves in China can be approximately equal to the reserves strategic petroleum reserve. This was reported by the influential Washington Post, citing data from the American company Orbital Insight.
The information that underlies the analysis were obtained Orbital Insight with the help of satellite imagery and tracking of activities (opening and closing lids of tanks. Following the investigation, the company noted that the capacity of the oil reservoir is several times higher than generally accepted values. The company employs 2,100 tanks for oil storage, though a common database TankTerminals.com is 500 stores less. At the same time, analysts stress Orbital Insight, it is possible to have more and underground tanks.
According to the estimates of oil reserves in China in may 2016 amounted to 600 million barrels, while officially, the Chinese news Agency “Xinhua” reported that there were only 287 million barrels, which covers the 36 days of oil imports. While commercial oil stocks in the USA allows US to provide 150 days of imports of raw materials, emphasizes the publication. According to the energy information Administration US (EIA) under the Ministry of energy, now in the American reservoirs and storages — 522,5 million barrels of crude oil.
The publication notes that the real Chinese reserve can influence the situation on the oil market. The logic is as follows — the fact that China stocks will be greater than expected, will mean that growth in oil demand in recent years was due not to increasing consumption, and strategic planning. In addition, this may hamper the efforts of OPEC to limit oil production in the hope to stimulate the growth of prices, but also to help China to create a buffer in case of a sudden disruption in the supply of raw materials.
Can China one solution to the “destroy the fruits of the agreements” of the major players in the market and affect the price of oil? According to analysts the us Agency S&P Dow Jones Indices, the majority of oil imports by China were sent to reserves, the size of which is unknown. And if OPEC tries to push the oil up, then China may stop supporting the oil quotes.
The data of Orbital Insight can be regarded as a curious observation of how the surplus oil is gone in favor of the strategic initiatives in China. But stocks in China a profound impact on the market, on the price to be able to, I’m sure the head of analytical Department of national energy security Fund Alexander Pasechnik.
— Maybe China will continue to gain oil in the store, but until such reserve is measured in weeks of consumption, at best a few months. In the parameters it is not the volume, which can affect pricing on a global scale. For example, the reduction of oil production in Venezuela and in several other countries, this crosses over.
It is also not clear over what period was accumulated estimated volume in storage. They can be empty, which on the contrary may indicate that in the near future China may support the market, if they continue filling their tanks with oil until prices rebounded in connection with a possible agreement of member countries of the OPEC on reduction of volumes of oil extraction in late autumn.
By the way, the history of the unaccounted oil. Not long ago disclosed that oil in tankers, storage facilities, strategically closed, the pipeline is not taken into account in the global forecasts. But again- it may become a kind of indicator, but not the fundamental characteristic of the market.
“SP”: — it Often happens that, when there is no any specific information, look in oil reserves in the United States — they rose and fell…
— Yes, in the end, the tendency to increase or decrease leads to volatility in the market. Of course, the same can be and with Chinese resources, while the PRC will make a decision to conditionally publish reliable statistics with a certain frequency, as do the United States. Then they can also become an indicator of the current pricing, but, I repeat, — not defining the trends.
China is indeed in 2008 decided on the creation sparereserved of oil in its territory in several parts of the (originally five) in the event of various emergency and in 2009 began to fill the tanks, said Deputy Chairman of the scientific Council of the Institute of Far Eastern studies, head of Center for socio-economic research China Andrew Ostrovsky.
— It is clear that no one in China American experts to the tanks could not prevent, and remote sensing of oil storage tanks provides information, the reliability of which is 50%. But if you know Chinese language, to count the Chinese oil reserves is possible in principle for statistical collections in which it is estimated the production, consumption, balance of the basic fields. “Warehousing” resources dependent on imports, and more recently China itself produces stable volumes. In order to increase, require specific investments in production.
The General Director of national energy Institute Sergei Pravosudov believes that these Orbital Insight fit into the American trend of last time — to do everything to lower oil prices.
— The oil production in the States declined from 9.6 million barrels per day last year to 8.4 million, But no one pays any attention, although local companies are going bankrupt, because shale oil is one of the most expensive in the world at cost. The situation is similar in Canada. However, almost all of the major us companies and financial investors focused on the task to bring down prices.
For example, recently, the famous Goldman Sachs released a report on what its analysts expect the onset of peace in Libya and Nigeria, which, respectively, will lead to lower oil prices. Although, by and large, things are looking very different reports. For example, the fact that the war in Iraq may soon spread to the oil fields or that the war in Yemen can be actively spread to the territory of the oil-rich Eastern province of Saudi Arabia. This would clearly lead to a lack of oil on the market, and, therefore, to higher prices for raw materials. But such research, the Americans spend, but, as I said, publish forecasts about the world in Libya, although it is unclear why he was there it would be suddenly.
World oil demand in fact, in recent years has increased, but in the US version, this process was “wrong” and is associated, it appears, that China is simply accumulating reserves. No one argues that China accumulates reserves, and he does not particularly hide. While oil is cheap, why would the Chinese not to buy and not upload as much in reserves? Because of the fact that worldwide investment in oil production fell sharply, in some foreseeable future the price will increase. Especially with the demand growth, the market offers reduced.
In fact, now the main uncertainty lies not in China, and the middle East.
“SP”: — As you know, OPEC announced that in November will decide on production cuts…
But, first, it is unclear whether this decision was made. Second, it means nothing. Let me explain. Saudi Arabia has a state monopoly on oil production. The state-owned company Saudi Aramco can produce as much as will fit. And now her production levels close to maximum. In Russia also produce oil at record levels, and we should not expect that we can have something to build on. So now everyone can say, in favor of a slight decrease in production and thereby to maintain his reputation.
But there is one important player in Iraq, which is a leader in the growth of oil production. One time against him was sanctioned, unleashed fighting, etc., in General, the country has not had any investment. And then the borders were opened to companies from all countries — American, British, Russian, Turkish, French, Norwegian, Malaysian. They put a lot of money, so oil production is growing and it is simply impossible to stop a statement saying, you know, guys, let’s tighten the taps.
As for Iran, he voiced a desire in the short term to reach the level of production is 4 million barrels per day (now the 3.6 — 3.8 million), but this is highly questionable, since it is a considerable investment and time.
Thus, really serious to increase production can only be a single Iraq, which, as you know, is actually divided into several parts. Even if Baghdad is something you promise, it can not guarantee that the same policy will adhere to the Kurds, and especially the group “Islamic state” – and those and others will still do what you think is right.
In principle, everyone understands that the oil prices in the future will still grow, but to determine this perspective is extremely difficult due to the influence of numerous factors. But the reserves of China, there is clearly nothing to do with it. Will not be Beijing immediately throw them on the market. It just makes strategic reserve, as well as in his time did the United States. Faced in 1973 with the “oil embargo”, the Americans started to make reserves. And because now all the sea routes controls the us fleet in China are worried that the worsening of relations with the United States, the latter can block the Straits of Malacca and block the route of oil tankers from the Middle East to China. Thus, Beijing is simply trying to protect themselves by accumulating oil in storage.
