China oil demand will push prices up-KBC
Wednesday, May 25 15:55:12
(BizWorld)
Chinese oil consumption could leap from 5 to 50m barrels a day, pushing the price of oil closer to USD100 a barrel, it was claimed today.
Geoffrey Randells, head of Equities, KBC Asset Management in Dublin, says China consumes just over 5.5m barrels a day, which is about 7pc of world output. The US consumes 25pc.
"There's a lot of noise these days about how China's growing demand for oil is pushing up the price of petroleum and its derivatives, like petrol. Yet, as things currently stand, it's not a question of how much oil China consumes, but how little", he said.
However, he said that simple calculations about future oil consumption do not take into account factors such as future demand and energy efficiency.
Nevertheless, the demand for oil can only increase, he said, which will push prices up. In addition, China's attempt to buy oil exploration and production companies underlies the strategic value of depleting oil and gas reserves around the world.
"Crude oil has recently been trading above USD50 per barrel," said Randells.
"As outlandish as recent claims might be, a price of USD100 is probably more realistic." businessworld.ie |
