China Winning in OPEC Price War as Oil Hoarding Accelerates

[webfact]

China Winning in OPEC Price War as Oil Hoarding Accelerates
BY BLOOMBERG

Dec. 1 (Bloomberg) — China is emerging as the winner from OPEC’s battle with rival oil producers as the world’s biggest energy consumer stockpiles crude.

The nation’s efforts to boost reserves may increase its imports by as much as 700,000 barrels a day in 2015, according to London-based Energy Aspects Ltd. That’s more than half the global glut forecast by Citigroup Inc. after the Organization of Petroleum Exporting Countries refrained from cutting output at its meeting last week. Brent crude has slumped 41 percent from its peak in June.

The dwindling number of investors still betting on a rebound in prices can at least count on Chinese demand. OPEC decided to maintain output targets even as a shale boom boosts U.S. production to the highest in more than three decades and causes a global supply glut. As crude extends its slump to the lowest level in more than four years, China is seeking to build a strategic petroleum reserve.

“This is a golden time window to acquire more strategic oil stockpiles at lower costs,” Gordon Kwan, the Hong Kong- based head of regional oil and gas research at Nomura Holdings Inc., wrote in an e-mail Nov. 28. China will be “a big beneficiary” from the OPEC decision, he said.

China boosted imports by 8.3 percent, or 460,000 barrels a day, in the first nine months of this year, the fastest pace since 2010, customs data show. The country will overtake the U.S. as the world’s biggest oil consumer within two decades, according to the International Energy Agency in Paris.

Full story: http://gcaptain.com/china-winning-opec-price-war-oil-hoarding-accelerates/

-- gCaptain 2014-12-01

[Chicog]

China must be loving this, it's saving them a fortune.

Saudis risk playing with fire in shale-price showdown as crude crashes

Saudi Arabia and the core Opec states are taking an immense political gamble by letting crude oil prices crash to $66 a barrel, if their aim is to shake out the weakest shale producers in the US. A deep slump in prices might equally heighten geostrategic turmoil across the broader Middle East and boomerang against the Gulf’s petro-sheikhdoms before it inflicts a knock-out blow on US rivals.

http://www.telegraph.co.uk/finance/oilprices/11263851/Saudis-risk-playing-with-fire-in-shale-price-showdown-as-crude-crashes.html

[rickirs]

"The country [China] will overtake the U.S. as the world’s biggest oil consumer within two decades."

This is a race the USA won't mind losing. However, the USA will probably still have higher energy consumption per capita

[Chicog]

"The country [China] will overtake the U.S. as the world’s biggest oil consumer within two decades."

This is a race the USA won't mind losing. However, the USA will probably still have higher energy consumption per capita

Well by that time the US is supposedly to be a big net exporter, so it maybe it will take a bite out of the trade deficit , although not at those prices.

[NeverSure]

Anything positive for China here is temporary. China doesn't have nearly enough of its own oil to meet its needs. The more it consumes the more it buys and it can't count on oil prices staying low forever.

Saudi and Russia's oil reserves are dwindling while the US just keeps finding more. There is a lot of oil offshore and in Alaska in the US but it is off-limits due to environmentalists. Still, the US will become the world's largest oil producer in this decade. It will become a net exporter of oil within a couple of years.

Gasoline used to be a waste product from oil. It has to be cracked from the oil to get at the valuable parts which make plastics and butyl (artificial rubber) and other things right down to the tar which is used to pave highways. The widespread use of the gasoline engine for transportation caused gasoline to become useful.

The lack of oil will be a big drain on China in the future.

[Krataiboy]

They're holding gold, too. So don't be panicked by low prices into selling yours.

[LawrenceChee]

Slowing down the economy means a reasonable demand for oil and a halt in polluting manufacturing which is good for long term sustainability

I think this is the right move for China ...good for USA if its economy improves in the next 30/50 years as by then China would begin its decline and the U.S. Economy can take over another cycle of consumer spending or unnecessary wars