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Page added on September 29, 2016

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China may be stockpiling more oil than anyone realized

Consumption

One of the mysteries of the oil market is the question of how much crude oil China has squirreled away in commercial and strategic stockpiles.

Now a satellite-imaging firm called Orbital Insight claims to have an answer. It says Chinese inventories in May stood at 600 million barrels, substantially more than commonly thought and nearly as much as the U.S. Strategic Petroleum Reserve. Chinese storage capacity, which includes working inventory, is four times widely used estimates, Orbital Insight says, adding that the firm has not only counted storage tanks but has also used imaging techniques to figure out how much oil is in the tanks.

The issue could influence expectations in oil markets. If China has built larger reserves than previously estimated, that means much of what looked like oil demand over the past couple of years was not a result of higher consumption but of strategic planning. It would make OPEC’s task of cutting output to drive up prices­ more difficult. And it could provide a buffer for China in the event of a sudden disruption in imported supplies.

The new estimate comes from a firm founded by James Crawford, who formerly worked on Google’s book-scanning project. Crawford said that he recruited some NASA scientists and left Google to start Orbital Insight because the price of Earth-orbiting hardware was falling and the amount of satellite images was booming. He has received backing from the investment firms Sequoia and Google Ventures. The firm pays a percentage of its revenue to satellite-image providers.

“The broad vision is to take large volumes of satellite imagery and make sense of what we’re doing on the Earth and what we’re doing to the Earth,” Crawford said.

For its Chinese analysis, Crawford said the firm went back to images taken from 2010 to 2014 and counted the number of oil storage tanks built and destroyed and came up with a figure of 2,100 storage tanks, far more than the 500 tanks in the industry standard database in TankTerminals.com.

Orbital Insight also used its own algorithms to calculate how much was in the tanks by examining their roofs, which rise and fall depending on how much oil is being stored.

“As the reservoirs are filled and emptied, the roofs rise and fall, reflected in the crescent moon-like shadows from the walls of the reservoir,” the company said in a release.

Orbital Insight honed this technique on about 6,000 tanks in the United States, comparing its figures with those of the U.S. Energy Information Administration. Recently the firm said it could come up with statistics faster than the International Energy Agency, something that could be valuable to oil traders — customers the firm is trying hard to woo.

The firm, however, cannot discern whether there are underground storage facilities.

Orbital Insight’s estimate far exceeds the figure given in a rare glimpse of China’s oil supplies by its government. On Sept. 2, the state-owned Xinhua news agency reported that China had 287 million barrels of oil in strategic storage sites in eight cities as well as in commercial facilities at the beginning of the year. Started in 2004, the Chinese strategic stockpile would be enough to cover only 36 days of oil imports, Xinhua said, based on data from the China National Petroleum Corp.’s Research Institute of Economics and Technology. China’s goal is to have large enough strategic stockpiles to cover 100 days of imports, a target the government’s five-year plan said might not be completed by the 2020 goal.

The U.S. reserve is large enough to cover about 150 days of imports.

However, with low prices, China has been on a buying spree, many analysts believe.

Investment banks and other analysts have estimated that China has been importing 600,000 to 1.2 million barrels a day more than it needs for consumption. If China has just been bargain hunting, it could cut imports and help keep prices low. Or it could press ahead to reach its 100-day goal.

If Orbital Insight is right, that could be closer than anyone thought.

Washington Post    



29 Comments on "China may be stockpiling more oil than anyone realized"

  1. Plantagenet on Thu, 29th Sep 2016 3:28 pm 

    Once China fills its SPR then oil demand will drop by ca. 1 million bbls/day. That could happen in the near future.

    If oil purchases by China drop off, it will make the oil glut worse.

    Cheers!

  2. Anonymous on Thu, 29th Sep 2016 5:48 pm 

    re·tard 2 (rē′tärd′)
    1. Used as a disparaging term for a person who is mentally disabled.
    2. A person considered to be foolish or socially inept.
    3. Planatagenet.
    [Short for retarded.]

  3. Cloggie on Thu, 29th Sep 2016 5:51 pm 

    self-aggrandizement
    əˈɡrandɪzm(ə)nt/
    noun
    noun: self-aggrandisement
    the action or process of promoting oneself as being powerful or important.
    “critics accused him of self-aggrandizement”

    http://www.britroyals.com/images/plantagenets.JPG

  4. Apneaman on Thu, 29th Sep 2016 6:16 pm 

    old dutch
    noun
    noun: old dutch

    stinky abrasive powder use to scrub piss shit and blood stains from toilets.

    synonyms: Cloggie, Clogged, Clog, Moron, Bone Head, Numb Nuts, Fuck Face, Shit4brains, Imbecile, Retard from Holland.

  5. Cloggie on Thu, 29th Sep 2016 6:23 pm 

    There is not a second I am not on your mind, right Friday?

  6. Apneaman on Thu, 29th Sep 2016 7:14 pm 

    It’s hard to miss you on this site with all your retarded screaming and Trump worship. Why not hop a flight and catch his next rally with the rest of the mouth breathers? You can sneak back stage, suck his dick and have your wet dream fulfilled. Try and get some Trump juice on your blouse. It might come in handy later on $$$$$$$$

  7. ghung on Thu, 29th Sep 2016 7:22 pm 

    “It says Chinese inventories in May stood at 600 million barrels, substantially more than commonly thought and nearly as much as the U.S. Strategic Petroleum Reserve…..”

    Giving them about twice the reserve, in terms of daily consumption, as the US has in their SPR. I know; it’s more complicated than that. Just sayin’.

  8. makati1 on Thu, 29th Sep 2016 7:30 pm 

    Ap … ANYONE but Hillary.

  9. Anonymous on Thu, 29th Sep 2016 8:02 pm 

    On a more serious note, wtf business is it of either washpo, or anyone else what China is doing with THEIR oil. They can store as little or as much as they like. Did washpo bring up ‘satellite imaging’ to make is sound conspiratorial, or as if its the ‘big secret’? Are China’s oil reserves the area 51 of oil stockpiles? Or maybe imply China has something to ‘hide’? China could store 2 billion barrels of oil for all I care, even take full page ads in all the western propaganda rags bragging about it if they want.

    Must be a slow news day, or filler. Hard to see how washpo cant fill its rag with ‘coverage’ (bullshit) stories about amerikas fake elections, phony debates, and the uS’s equally fake war on ‘ISIS’. But a guess a vaguely sinister sounding story, replete with ‘satellite imagery’ no less, about China’s oil sounded interesting enough to run….

  10. rockman on Thu, 29th Sep 2016 8:12 pm 

    300 million bbls, 600 million bbls, 900 million bbls, etc.

    That’s 0.9%,1.8% 2.7% of annual global consumption. Or how many days of Chinese consumption: 30 days, 60 days, 90 days.

    To each his own sub but it really won’t get very interesting for the Rockman until it gets above 3 billion bbls…10%…300 days.

  11. makati1 on Thu, 29th Sep 2016 8:29 pm 

    Anon, just more China bating and diversion from the Imperial death squads in the ME, we call the US military. You know, the big oil corporations mercenary hired killers. Nothing to do with peace or security or democracy. Distraction, just like the Kardashian bullshit. Keeps the sheeple from waking up until it is too late.

  12. rjk on Thu, 29th Sep 2016 10:05 pm 

    China’s oil production just happens to be down more than 10% this year. That would be why they are importing more

  13. makati1 on Thu, 29th Sep 2016 10:28 pm 

    rjk, assuming that the posted numbers of production are correct. We shall see.

  14. Cloggie on Fri, 30th Sep 2016 3:22 am 

    600 million barrels, that’s 300 large oil tankers.

    https://en.wikipedia.org/wiki/Oil_tanker

  15. denial on Fri, 30th Sep 2016 8:53 am 

    we have about 3 years and then production and oil will start to fall drastically….we are now at the tipping point I am afraid…after the U.S elections is when stocks will start to decline and fear will start to set in…

  16. joe on Fri, 30th Sep 2016 9:07 am 

    Yeah, the feel good spending will end, the FED will raise rates post elections, oil will go up thanks to opec and president whoever will have to manage another recession, they will have to manage the mess/precourser of ww3 that is Syria, then there is the nutjob in the Philippines Duterte that slipped under the CIA radar another nationalist who hates drugpushers and immigrants. Irans missile programme is moving ahead so is North Koreas, and DAILY the US loses face in Asia and all the drone strikes on earth wont fix that. The economy remains of life support, european banking crises dwarf Lehmans so guess what? We are in for a bumpy ride. How many more sardines can we fit into Europe before that can of shit explodes?

  17. rockman on Fri, 30th Sep 2016 9:52 am 

    Denial – “…we have about 3 years and then production and oil will start to fall drastically”. If by “we” you mean the US I have just the opposite expectation. So much of the increase in US production came from the large number of shale well continuely being completed. Shale wells with clearly documented high EARLY decline rates. High decline rates that were camouflaged by all the new drilling. Once the early “flush production” is gone and much fewer new wells drilled we’ll slip back to our rather well established declined rate.

    It’s good to remember that once the shales pass thru their high decline rate period of several years their decline becomes much slower…similar to the old conventional reservoirs. Of course that’s assuming no sudden surge in oil prices.

  18. Kenz300 on Fri, 30th Sep 2016 11:31 am 

    The top 1% want it all and the RepubliCON party will give it to them

    What do RepubliCONS believe — depends who is paying, Follow the money, fossil fuels, oil, coal, natural gas, nuclear, NRA, the top 1%. Are RepubliCONS the real EVIL DOERS.

    They want to end Social Security, Medicare and access to contraception.

    RepubliCONS are the reason the middle class is shrinking. The RepubliCON elite want cheap labor. They are no friend of the middle class

  19. Go Speed Racer on Fri, 30th Sep 2016 11:38 am 

    To protect their secrets, now the Chinese have to paint fake shadows onto the tops of their oil tanks.

  20. Davy on Fri, 30th Sep 2016 12:10 pm 

    Speedy, I heard the Chinese are using huge hydrogen balloons that appear like tanks in massive tank farms. There was an unsubstantiated report of one taking flight and landing in Manila similiar to the Hindenburg. The only casualty was an asshole American. The reason for the fake tanks is false reporting of oil imports with the resulting capital flight by corrupt oligarch buying homes on the west coast of North America. It was also reported that fake house balloons where being put up to impress their girlfriends at home. Oil tank flight is similar but not the same as capital flight. Either way the stuff is gone.

  21. Apneaman on Fri, 30th Sep 2016 12:20 pm 

    Kenz, are you saying the replicons should be more like your beloved Dems?

    Obama Admin Quietly Enables Oil and Gas Drilling on Public Lands and Waters, Weakens Endangered Species Act

    http://www.desmogblog.com/2016/09/29/obama-admin-oil-gas-public-lands-waters-endangered-species-act

    How about them Canadian Liberals who are more liberal than your liberals?

    Trudeau Just Approved a Giant Carbon Bomb in B.C.

    http://www.desmog.ca/2016/09/27/trudeau-just-approved-giant-carbon-bomb-b-c

    Like I recently demonstrated to the rockman, you ain’t got any say in the matter and not much in the way of choice. Even those in the club have limited choices.

  22. Cloggie on Fri, 30th Sep 2016 12:29 pm 

    Kenz300 says: The top 1% want it all and the RepubliCON party will give it to them

    What makes you think the Democrats are any different? You seem to forget that your Dem-heroes were in charge over the last eight years, if you want to believe that either Dems or Reps are in charge if they officially constitute the government; they don’t, they do:

    http://www.cfr.org/china/revising-us-grand-strategy-toward-china/p36371

    The tent cities sprung up on your Dems watch.

  23. rockman on Fri, 30th Sep 2016 1:19 pm 

    “…you ain’t got any say in the matter and not much in the way of choice”. Sad but true: the best choices all those fossil fuels consumers had were those energy suck-ups President Obama and PM Trudeau. LOL. Best thing: the conservatives didn’t even have to contribute to their campaigns…they are going to do exactly what those GHG generating liberal voters expect of them.

    Same reason most of the R’s would prefer Sec. Clinton win. Better chance of her being oil industry friendly since she will want to satisfy the same GHG generating voters in order to get her full 8 years.

    If y’all think the Rockman is kidding about the oil patch NOT being terrified of HRC y’all would be wrong. Even the Koch bros aren’t trying to help Trump get elected. Need I say more? LOL.

  24. rob on Fri, 30th Sep 2016 5:02 pm 

    The thing about China is people listen. So when they just one day ban driving…everyone will go back to bikes or walk. Here if Obama or Hillary would do that you’d have mass rioting. The Chinese will make that oil storage last awhile. The US will burn through it in months.

  25. Anonymous on Fri, 30th Sep 2016 5:04 pm 

    You merikans, so child-like with your black-hat (repubs) and white-hat (dem) fairly tales, LOL. Rock, I like how you love reminding(or imply) to everyone the ‘ uS oil patch’ as you call it, is subservient to washington(the fantasy), and not the other way around (the reality). Ken is an infant mentally, so he has an excuse, at least.

    The ‘oil patch’ doesn’t give two squirts who reads the teleprompter in ‘DC’. Whatever the uS oil cartel wants, they get. The uS is best place in the world to be in oil business. And how could it be otherwise, they OWN the place, lock stock and…ahem…barrel(of oil that is).

  26. makati1 on Fri, 30th Sep 2016 6:01 pm 

    Anon, really? They own Russia? They own Iran? They are trying to own Syria, but that is not going too well because of Russia and Iran. The US WAS an oil giant pre-1970. Those days are over, just as the days of USD dominance are coming to a close.

    Granted DC is run by corporations, but they are mostly the Federal Reserve and the major banks. AND the MIC, of course. Especially the MIC. That is how I see it.

    As for Killary and The Donald, ANYONE but Killary.

  27. Davy on Fri, 30th Sep 2016 6:07 pm 

    Anonymous, grow up and write normal. Your cutsie twenty-something anti-American alternative style is retard.

  28. Anonymous on Fri, 30th Sep 2016 6:39 pm 

    LoL.

  29. GregT on Sat, 1st Oct 2016 2:05 am 

    “As for Killary and The Donald, ANYONE but Killary.”

    Seconded.

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