BEIJING: China is emerging as the winner from the Organisation of the Petroleum Exporting Countries’ (Opec) 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 next year, according to London-based Energy Aspects Ltd. That’s more than half the global glut forecast by Citigroup Inc after Opec refrained from cutting output at its meeting last week.
Brent crude has slumped 41 per cent 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 United States’ 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,” said Nomura Holdings Inc Hong Kong-based head of regional oil and gas research Gordon Kwan.
China will be “a big beneficiary” from the Opec decision, he said.
China boosted imports by 8.3 per cent, 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 US as the world’s biggest oil consumer within two decades, according to the International Energy Agency in Paris.
Opec will keep its production target at 30 million barrels a day, signalling it won’t adjust supply to influence prices, instead preferring to maintain market share amid the unprecedented shale boom.
Citigroup estimates the global oversupply will almost double to 1.3 million barrels in the first half of next year, according to a report last Thursday.
While China holds reserves equivalent to about 30 days of imports, the government is seeking to boost that level to 100 days by 2020, according to China Petrochemical Corp, Asia’s biggest refiner. That would be the equivalent of about 570 million barrels, based on the most recent monthly imports. Bloomberg