Baku, Azerbaijan, Oct.27
By Leman Zeynalova – Trend:
If oil prices go up enough, it is possible that some of the stockpiled oil will be sold by China on the open market, Scott Kennedy, deputy director of the Freeman Chair in China Studies and director of the Project on Chinese Business and Political Economy at the Center for Strategic and International Studies, told Trend Oct.27.
He was commenting on China’s possible reaction to OPEC oil output cut deal.
In September, OPEC producers agreed during the informal meeting in Algiers to cut down the oil output to 32.5 million barrels per day (bpd) from current production of 33.24 million bpd.
How much each country will produce is to be decided at the next formal meeting of OPEC in November.
China does export some oil, but it primarily imports oil and exports refined oil products, said Kennedy.
“Its domestic demand for oil is still growing, particularly as it continues to build its strategic petroleum reserves.”
He believes that even if China increases oil export, this would not have a dampening effect on the oil price increases OPEC is trying to generate.
Chinese oil demand growth has all but vanished in the third quarter of 2016 compared to a year ago, pulled down by a substantial slowdown in industrial oil usage, according to the October Oil Market Report of the International Energy Agency.
“Some of the slowdown may be temporary due to forced factory closures ahead of September’s G20 meeting in Hangzhou,” said the report.
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