Posted on 03/21/2015 7:18:14 PM PDT by Lorianne
A global oversupply of oil is set to rise as China pauses in the build-up of its strategic reserves and Asian refineries slow crude imports ahead of the spring maintenance season, putting more downward pressure on prices.
China's purchases to fill its strategic petroleum reserves (SPR) had been one of the main drivers of Asian demand since August of last year, with the No.2 oil consumer taking up cheap crude to fill its tanks despite slowing economic growth.
Yet China could pause its reserve purchases soon as tank sites reach their limits and new space only becomes available later this year.
Little is known about China's SPR levels. The government seldom issues data, but its plan is to reach around 600 million barrels, about 90 days' worth of imports. Most estimates put the SPR stocks currently to be 30-40 days' worth.
"I don't think there is much (SPR) space left to fill," a Chinese storage executive said under the condition of anonymity.
In the Zhoushan area of Zhejiang province - site of two SPR bases and major commercial storage facilities - tanks are brimming, the executive said. "They are so full that one VLCC tanker owned by a state refiner has had to wait for almost 15 days to discharge," he said.
Adding to downward pressure is the expectation that Chinese refiners could process less crude oil in the second quarter as demand is dented by tax hikes and an economy growing at its slowest in 25 years.
(Excerpt) Read more at reuters.com ...
Our price near Sacramento has dropped below $3/gal to $2.90 @ Sam’s Club.
and what happens when most gas stations run out of “The Number 1”? remember when gas hit 3.00 a gallon and stations were very short on 3’s?
this is going to hurt a lot of folks in the oil industry and those who support them.
Back in the day stations were hard pressed to post prices above a buck.
Have the hike in California gas taxes kicked in yet?
I just got an email from the local Tea Party that there’s new legislation to stop the CA Crap n Trade law signed by that idiot Schwartzenrenegger from taxing automotive fuels of any kind. They claim the demonstration for the bill on Monday at the Crapitol will include several big names including Jon Coupal and others. Watch your Monday evening news I guess.
How can this be? Why is China slowing oil imports? Do they have some secret new energy source? Since the economy is improving shouldn’t oil demand be increasing? I don’t get it. /s
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