There is a mystery at the heart of the global oil market. China has soaked up a torrent of oil imports this year, filling tanks and underground caverns. Without this, prices would be much lower. But why is Beijing snapping up oil it doesn’t obviously need? How much is it going to keep buying? And for how long?
The first part of the puzzle is exactly how much crude the Middle Kingdom has absorbed. It does not release figures for storage capacity or volumes, so they have to be estimated. Its aboveground tanks can be assessed by satellite, but a growing portion of its capacity is now below-ground. The amount going into storage can be approximated by looking at the difference between the sum of imports and domestic production on the one hand, and the amount refined on the other.
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Source: The National
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