Expert proposes filling up oil reserves in China

Shanghai, January 5 (Gasgoo.com) Because of the Middle East tension and the OPEC's plan to cut production, international oil prices have been rising lately. On Jan. 2, oil closed up 3.9% to $46.34 a barrel on the New York Mercantile Exchange. An energy expert has suggested that at this price China should speed up its oil reserves, said xinhuanet.com today.

Guan Qingyou, an energy expert from Tsinghua University in Beijing, said that $46 is a relatively low price and offers a good opportunity to accelerate filling up China's oil reserves. He explained that the global economy will not warm up soon and the global oil, whose demand is decided by the world economy, will not see its prices rise up in the short term.

Last week, China's top energy official, Zhang Guobao, head of the National Energy Administration, wrote in the People's Daily newspaper that China should take advantage of the falling global energy demand to increase its oil reserves. Mr. Zhang said China will "encourage companies to utilize idle storage capacity to increase inventories."

Data from China Cutoms show that the country's oil imports have not risen greatly as the global oil prices fell. In Nov. 2008, China's oil imports dropped to the year's lowest level of 13.36 million tonnes, down 13.33% month opn month and down 1.86% year on year. As the U.S. seeks to stockpile oil, China will be doing the same, observers say, and is expected to quicken the pace.

China recently completed construction of four oil-reserve bases - together representing the first phase of its strategic oil-reserve plan. Those bases can hold 102 million barrels of crude oil, and China is now pushing ahead with construction of the second phase, which could store an additional 170 million barrels, Mr. Zhang said in the article.