28 January 2011 20:14 [Source: ICIS news]
HOUSTON (ICIS)--China's 2011 crude oil imports are forecast to reach 5.4m bbl/day, an increase of 530,000 bbl/day or 11% from its 2010 levels, meaning China will continue to play a major role in global oil demand, an analyst said on Friday.
Deutsche Bank’s Adam Sieminski noted in the weekly Commodity Report that China's oil demand in 2010 grew by 2.7m bbl/day from 2009, as estimated by the International Energy Agency (IEA). Strategic crude stockpiling, as well as switching fuels away from coal, played a significant role.
The first phase of China’s reserve program built up storage capacity by 102m bbl in early 2009.
The reserve program’s timeline calls for the second phase to be completed in 2011, which would contribute to the climb in crude oil imports, according to Deutsche Bank. In this phase, the country will build at least 170m bbl of storage capacity.
Phase three would expand the reserves by 204,000 bbl, with the goal of increasing China’s inventories to a 90-day supply by 2020.
Three other factors tie into the amount of crude that China would likely import for 2011.
First, 2011’s domestic crude output in China was estimated to be 4.3m bbl/day, up about 4.1% from 2010, according to the IEA.
Second, 2011 demand for crude oil as a feedstock was estimated to increase 550,000 bbl/day compared with 2010, based on running an average of 9m bbl/day, according to Deutsche Bank.
Finally, operational stockpiling associated with refinery capacity expansions could add to necessary imports. Deutsche Bank estimates expansions of 590,000 bbl/day in refinery crude distillation.
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