Recent research from analysts at JPMorgan Chase & Co. has showed that China is nearing completion of its strategic petroleum reserves. From January, Chinese authorities boosted imports of crude on the back of plunging oil prices. A decline in demand for strategic reserves would cut about 15% from China's total imports.
Chinese crude imports advanced by 16%, thus nearing imports of the US, the world’s largest consumer of crude. This factor as well as production disruptions in Canada and Nigeria led to an oil price surge of 80% from the beginning of the year.
According Zhong Fuliang, vice president of China International United Petroleum & Chemicals Co., China's crude imports rose to a record 8.04 million barrels a day in February and it may surpass the US with average inbound shipments of 7.5 million barrels a day.
In 2009, China completed the first phase of building up its strategic reserves by filling its storage sites to 91 million barrels. The second phase will be completed by 2020, as planned.
According to JPMorgan, there were about 1.2 million barrels a day of surplus oil in China compared to 491,000 barrels a day last year.
Potential capacity of Chinese petroleum reserves totals almost 511 million barrels a day. In case the country will go on increasing its strategic reserves, its storage sites will be filled in August and that would result in a decline in imports in September.
