China thirsty for foreign oil

Country’s percentage dependency on imported oil surpassed that of the U.S. in May

China’s dependence on foreign oil has surpassed that of the United States, as consumers race to the pumps to fill their new cars with gas and the country feverishly stockpiles supplies to take advantage of weak markets.

The country’s increasing appetite has driven it to spend billions to acquire foreign oil producers and construct vast storage facilities to safeguard future needs. It also helps explain a rapid rise in oil prices this year, which many attribute to speculators gambling on an economic recovery.

“People trying to explain rising prices look at the West and see high inventory and low demand, so they blame speculators,” said Paul Ting, president of Paul Ting Energy Vision LLC in New Jersey. “They are looking in the wrong place – demand is coming from China. And demand has been robust.”

In its monthly update released yesterday, Bank of Nova Scotia commodity market specialist Patricia Mohr said China relied on imports for 57 per cent of its petroleum production in May while the U.S. imported 55 per cent of its needs. China’s import dependency was less than 40 per cent in 2003, and averaged 50 per cent in 2008.

Globe and Mail