China to increase oil output, exploration - Wen

CNN ^ | November 20, 2007 | Thomson Financial News

[NRG1973]

SINGAPORE, Nov. 20, 2007 (Thomson Financial delivered by Newstex) -- China will boost oil output at state refineries and increase exploration to ease a domestic supply crunch that has led to nationwide fuel price hikes, Premier Wen Jiabao said Wednesday.

China raised fuel prices by 500 yuan per ton, or roughly 10 percent, from November 1 after refiners withheld supplies in an apparent protest against government-set prices, creating shortages at petrol stations.

'The root of this problem has two sources -- one is supply and the other is the price. We are currently addressing this problem,' Wen told reporters in Singapore, where he was attending a series of Asian summits.

'We are increasing oil exploration in order to secure stable oil supplies and increase oil commodities, especially diesel,' Wen said.

[NRG1973]

If its OK for China to produce more of its own oil, one has to wonder why the USA must continue to have 75% of its oil reserves off-limits to drilling. Are we shooting ourselves in the foot with some of our own laws?

[JimRed]

...refiners withheld supplies in an apparent protest against government-set prices, creating shortages at petrol stations.

Whatever happened to the old Chicoms, who would have simply taken the refiners out back and shot them?

[Wingy]

Are we shooting ourselves in the foot with some of our own laws?

Short answer....Yes!

[hellbender]

The root of this problem has two sources -- one is supply and the other is the price

They still don't understand markets over there. The two variables are supply and demand. Commies still want to set price by fiat, apparently. Just like their Marxist brethren here, who think prices rise due to "gouging" by evil suppliers.