Article Review: Fuel Oil Demand in China

Essay by vcooksB+, February 2007

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With significant increases in oil demand and imports triggered by vigorous economic growth, China has grown to become an important player affecting the international oil market. This rapid economic growth together by facing serious power supply shortages, China is estimated to lead the market from a15 to 18 percent increase of fuel oils this year. This study analyzes recent trends in and conditions of the supply and demand situation and the Gross Domestic Product (GDP) in China.

After the Fifth National Oil Commerce and Trade Conference held recently in China, the government has taken measures to control the overheated economy growth that cannot be slowed down in a short period of time. Currently, the GDP growth was as high as 9.7 percent, which it was much higher than the expectations of 7 percent. It is indicated that the seasonal supply shortage has changed into a yearly supply shortage and the local supply shortage has changed into a nationwide supply shortage.

The Chinese government has actively developed and implemented policies for securing stable supplies of oil, such as reinforcing relationships with major oil producers in the Middle Eastern countries and Russia and trying to establish strategic oil stockpile systems. In addition, Chinese oil companies are working aggressively on advancements into overseas upstream sectors, investments in the upgrading and expansion of refinery facilities, improvements of port facilities, and to boost acceptance capabilities for increased crude oil imports. (Institute of Energy - Japan,

Energy Supply and Demand

The primary energy consumption in China continued to decline, from 913 million tons of oil in 1996 to 787 million in 1999, due to a declining consumption of its primary source of domestic coal. Consumption of primary energy as a whole is expected to increase steadily in concurrence with economic development of the country. The...