#China stockpile enough for global production for free#

#China stockpile enough for global production for free#

Trump's incredible 180 on OPEC, oil and free markets Photographer: Andrey Rudakov/Bloomberg via Getty Images Andrey Rudakov/Bloomberg/Getty Images Major oil currencies have fallen much more this month following the plunge in Brent crude prices to less than $30 a barrel, with Russias ruble down by 15%. Oil storage tanks stand at the RN-Tuapsinsky refinery, operated by Rosneft Oil Co., at night in Tuapse, Russia, on Sunday, March 22, 2020.

Last year, it imported 72% of the crude oil it used, the highest proportion on record, according to CNPC Economics and Technology Institute, the research arm of a major state-owned energy conglomerate in China. Hoarding inexpensive oil is critical for China, which has been working for years to bolster its emergency stockpile of oil reserves.Īs the country’s economy grows, China has become increasingly reliant on foreign oil. While prices have recovered somewhat since then on hopes that OPEC and Russia may agree to cut production, it’s still “clearly good timing” for the world’s largest importer of crude to step in and snap up whatever it can, according to Dennis Ip, head of China and Hong Kong energy research at Daiwa Capital Markets.

US oil futures and Brent crude cratered to 18-year lows last month as demand collapsed because of lockdowns sparked by the coronavirus pandemic, and as Saudi Arabia flooded the market with additional supply in a price war with Russia. That’s great news for China - the world’s second largest consumer of oil and its biggest importer - which has been building up huge reserves and needs energy to restart its economy. Oil is cheaper right now than it has been in years.