Skip to main content

China increases crude oil imports

"China to import 140 mil tons of crude oil" reads the headline of a recent China View article.

BEIJING, Dec. 16 (Xinhua) -- China's crude oil imports are expected to reach 140 million tons in 2006, up 10.2 percent on last year, according to the Ministry of Commerce (MOC).

Liang Shuhe, deputy director with the Foreign Trade Department of the MOC, said that China's demand for crude oil would total about 290 million tons this year, of which 48 percent were imports.

According to Liang, China's total output of crude oil is expected to reach 183 million tons in 2006, with 7.40 million tons for exports.

Liang said the fast growth of the economy has forced China to depend more and more on imports because of the limited domestic production, predicting that the steady increase in imports was likely to continue.

Statistics from the MOC show that China's crude oil imports increased by 14.1 percent in the first ten months of this year to reach 120 million tons.

The Chinese government removed tariffs on oil imports in November and opened its domestic oil market to foreign companies in December to cut the cost of oil imports.

I found this piece, posted to a recent article link roundup at The Oil Drum, noteworthy for two reasons.

First, it confirms the conviction, held among energy watchers and global/economic strategists alike, that America is now in direct competition with China for scarce natural resources. Hydrocarbon energy resources being chief among them.

Second, I was struck by the date of the article, December 16, 2006. It seemed to be a year to the day since I had written up an interview with mining consultant Dave Feickert which broached that very subject.

Mr. Feickert's message to readers was that despite a recent string of horrible coal mining accidents, China would have to continue relying on coal to meet their energy needs or increase their purchases of oil and gas from abroad. Thus, Western auto drivers would be indirectly impacted by the safety issues afllicting China's coal mining industry.

Here is an excerpt from that interview, dated December 16, 2005:

So for now, you see mainly a continuation of heavy coal use? You’ve made the point that any shortfalls in coal supply could result in China increasing their purchases of oil and gas from various sources around the globe. Please discuss this point.

China will have to rely on coal, or it will have to buy much more oil and gas off the world market. The effect on the global price is already apparent, with China making up around half of increased global oil demand, something few expected.

Unpredicted, except by a few energy analysts was also the lack of supply, which has been critically restricted by the complacency that sets in during periods of low prices, the poor judgements made by the US and the UK in Iraq, the restrictions on foreign investment in the Middle East and the fact that the oil and gas reserve base has been steadily moving eastwards anyway, as Western (mainly US, UK) oil depletes and Mexican fields matures. Hurricanes do not help either; nor do refinery explosions, as at BP’s major US facility recently.

On its current economic growth trajectory, China is expected to overtake the US as the biggest world energy consumer sometime after 2025 and also the biggest emitter of carbon dioxide (CO2), the main Greenhouse gas. Accordingly, it has been hunting for diversified energy supplies around the world, with its well-trained diplomats engaging in discussions globally. This, of course, has been different from the US, Japan or Europe, where economic power, vested in large energy companies has helped out. However, as has been seen in the case of Shell, their energy reserve bases are dwindling or they are over-stated.

Interesting to note that coal use presently accounts for 70 percent of China's energy supply, and demand for coal is expected to increase by over 8 percent in 2007.

That last bit of information comes from a Bloomberg News article on a recent hot IPO: China Coal Energy, which recently raised $1.69 billion in an oversubscribed share offering. It seems that both coal and oil are enjoying increased demand in China.

Popular posts from this blog

The Dot-Com Bubble in 1 Chart: InfoSpace

With all the recent talk of a new bubble in the making, thanks in part to the Yellen Fed's continued easy money stance, I thought it'd be instructive to revisit our previous stock market bubble - in one quick chart.

So here's what a real stock market bubble looks like. 

Here's what a bubble *really* looks like. InfoSpace in 1999-2001. $QQQ$BCORpic.twitter.com/xjsMk433H7
— David Shvartsman (@FinanceTrends) February 24, 2015
For those of you who are a little too young to recall it, this is a chart of InfoSpace at the height of the Nasdaq dot-com bubble in 1999-2001. This fallen angel soared to fantastic heights only to plummet back down to earth as the bubble, and InfoSpace's shady business plan, turned to rubble.

As detailed in our post, "Round trip stocks: Momentum booms and busts", InfoSpace rocketed from under $100 a share to over $1,300 a share in less than six months. 

In a pattern common to many parabolic shooting stars, the stock soon peaked and began a…

New! Finance Trends now at FinanceTrendsLetter.com

Update for our readers: Finance Trends has a new URL! 

Please bookmark our new web address at Financetrendsletter.com

Readers sticking with RSS updates should point your feed readers to our new Finance Trends feedburner.  



Thank you to all of our loyal readers who have been with us since the early days. Exciting stuff to come in the weeks ahead!

As a quick reminder, you can subscribe to our free email list to receive the Finance Trends Newsletter. You'll receive email updates about once every 4-8 weeks (about 2-3 times per quarter). 

Stay up to date with our real-time insights and updates on Twitter.

William O'Neil Interview: How to Buy Winning Stocks

Investor's Business Daily founder and veteran stock trader, William O'Neil shared his trading methods and insights on buying winning stocks in an in-depth IBD radio interview.

Here are some highlights from William O'Neil's interview withIBD:

William O'Neil's interest in the stock market began when he started working as a young adult. 

"I say many times that I didn't get that much out of college. I didn't have much interest in the stock market until I graduated from college. When I got married, I had to look out into the future and get more serious. The investment world had some appeal and that's when I started studying it. I became a stock broker after I got out of the Air Force."
He moved to Los Angeles and started work in a stock broker's office with twenty other guys. When their phone leads from ads didn't pan out, O'Neil would take the leads and drive down to visit the prospective customers in person.

"I'd get in the c…