Chinese oil fund in the pipeline

China is reportedly planning to establish a giant government-led fund along the lines of the National Social Security Fund, in a bid to stabilize oil supply, demand and prices.

The fund is expected to come into being within a year, reported Newexpress Daily, a Guangdong-based newspaper.

It will also increase the negotiating power of China in oil trade with other countries.

“The timing is good for setting up the oil stabilization fund,” said Han Xiaoping, an energy analyst with Beijing Falcon Pioneer Technology Co. “At present the international oil price is relatively low and China has adequate forex reserves.”

China should use the fund to build more crude oil reserves and digest some of its foreign exchange reserves, he said.

People’s Daily Online