If production increase does not meet Chinese demand, we expect that the oil price will pass the hundred dollar mark within two years. Chinese oil consumption and US oil production are growing fast. Analysts have a special interest in the US oil production data. The financial media comment every week on the latest data about oil production and consumption from the US Energy Information Office (EIA). There is also a lot of interest in the weekly reports on the number of oil rigs form the analyst firm Baker Hughes. But what about Chinese oil consumption? Oil consumption analysts rely on limited official Chinese data. Oil consumption in China is a big unknown and can be much higher than is estimated by the Organization of Petroleum Exporting Countries (OPEC) or the EIA. And what do we know about the Chinese strategic reserves?
The year 2017 highlighted some changes on the global oil market. Firstly, despite the increase in production of this raw material in the United States, its stored reserves are decreasing rapidly on an annual basis. Secondly, a sharp increase in oil imports from the United States to China has contributed to the fact that Beijing has become the world’s largest importer of oil. Thirdly, the forecasts indicate that before 2025 the Middle Kingdom will overtake the US as the largest consumer and will be responsible for 18-20% of the world’s oil consumption. Continue reading