China delivers as non-OPEC output disappoints

BEIJING (Reuters) – China, often blamed for fuelling oil’s five-year rally, is also doing more than many big producers to temper the rise by driving its state-owned oil companies to pump more crude — at almost any cost.

Oil’s rise from $30 in 2003 to $115 this week has certainly been aided by surging Asian demand, but lately traders have also taken notice of flat or declining output from non-OPEC producers like Mexico and Britain, a worrying sign for future supplies.


In Russia, the world’s number-two producer, output failed to grow for an alarming third month in March.

But in China, where you might expect a decline from aging elephant fields like Daqing, which has been pumping for nearly half a century, growth has been small but steady. Output climbed 2.2 percent in the first quarter, data showed Thursday.

Defying gloomy predictions that their fields would follow the offshore North Sea or Mexico’s huge Cantarell into decline, China’s oil firms have channeled vast amounts of cash into high and low-tech methods of extracting extra barrels.

Reuters