• 4 minutes "Natural Gas Trading Picks Up Considerably Amid High Volatility" by Charles Kennedy - ...And is U.S. NatGas Futures dramatically overbought at the $6.35 range?
  • 8 minutes How Far Have We Really Gotten With Alternative Energy
  • 12 minutes  What Russia has reached over three months diplomatic and military pressure on West ?
  • 3 hours GREEN NEW DEAL = BLIZZARD OF LIES
  • 3 hours Revisiting: "The U.S. Grid Isn’t Ready For A Major Shift To Renewables" from March 2021 by Irina Slav at OILPRICE
  • 6 days "The Calm Before The Storm In Oil Markets" by Tom Kool of OILPRICE and seen at YahooFinance
  • 1 day How cheap Chinese tires might explain Russia's 'stalled' 40-mile-long military convoy in Ukraine
  • 5 days "Russia will stop 'in a moment' if Ukraine meets terms - Kremlin" by Reuters via Yahoo News...but Reuters suddenly cut out the balanced part of the story.
  • 5 days Will Variants and Ill-Health Continue to Plague Economic Outlooks?
  • 6 days Oil Stocks, Market Direction, Bitcoin, Minerals, Gold, Silver - Technical Trading <--- Chris Vermeulen & Gareth Soloway weigh in
PetroChina Sees Fuel Demand Rising In China Despite COVID

PetroChina Sees Fuel Demand Rising In China Despite COVID

Chinese fuel demand will continue…

Recession Fears Loom Large Over Bullish Oil Market

Recession Fears Loom Large Over Bullish Oil Market

High inflation, Fed tightening and…

European Drivers Face Further Gasoline Squeeze

European Drivers Face Further Gasoline Squeeze

European drivers who are already…

Tsvetana Paraskova

Tsvetana Paraskova

Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. 

More Info

Premium Content

Winners Of The Oil Bust: How Much Oil Did China Store?

It’s not surprising that in recent years China has been taking advantage of the low crude prices to stockpile strategic and commercial oil reserves. It’s not surprising that official data - if and when authorities decide to make it available – understates said reserves. This lack of information has left oil traders, investors and the market guessing how much crude China has been storing, and how it could use the quantity to possibly swing oil demand growth estimates and oil prices.

U.S. geospatial analytics company Orbital Insight has analyzed satellite images of China’s territory, applying computer algorithms and machine learning to identify and quantify crude storage tanks. Since tanks have floating roofs, the company uses algorithms to detect the shadows on the roofs and calculate how full a storage facility is.

Orbital Insight has found that there were 2,100 commercial and strategic petroleum reserve tanks across China, with capacity to store 900 million barrels of oil as of the end of 2014. That’s four times more than the 500 tanks reported in the industry standard database of tank farms at TankTerminals.com, Orbital Insight says.

The U.S. company’s latest estimates show that China had around 600 million barrels of oil supply on its territory as of May 2016—and that’s not counting underground storage.

Although the figure is higher than estimates, some analysts seem unsurprised. Michal Meidan, an analyst with London-based consultancy Energy Aspects, told Bloomberg that her estimate was over 400 million barrels including strategic and commercial stocks, but she was not surprised at Orbital Insight’s figures. Related: Oil Rig Builders Tap Into Offshore Wind Market

“There is more storage available in China than the market is willing to acknowledge,” Meidan says.

Since China is not keen on sharing updated data on its oil inventories, be it strategic or commercial, geospatial analytics may be a source of information that could be quite valuable to the oil market.

It was only last month that China decided to report strategic inventory reserves as of January 1 of this year: 31.97 million tons, or between 33 and 36 days’ worth of China imports. The figure was more than analysts had anticipated, and no one knows for sure how much China has been stockpiling since.

Early last year, China had plans to increase its strategic petroleum reserves (SPR) from 30 days to 90 days. According to Reuters, some 90 days of imports are equal to around 600 million barrels.

That’s the amount that Orbital Insight’s geospatial analysis has revealed. The U.S. company’s algorithms and data do not differentiate between strategic and commercial reserves. But in view of the lack of regular official and reliable data, it’s a source of data anyways.

And it shows that China continues to amass crude oil supplies. Related: Is The Glut Coming To An End? Cushing Stocks Fall To 10 Month Low

“China seems to be building tanks and filling them fast—and building more tanks just as fast or even faster,” Orbital Insight’s CEO James Crawford told Newsweek last week.

At the pace at which China is piling up inventories, analysts see it as a ‘wildcard factor’ in determining oil prices, even if OPEC’s much-discussed-little-specific deal on output cap were to materialize later this year.

“Now that China has bought so much cheap oil to fill their SPR…if OPEC does freeze and tries to bring the price back up, China may push it back down because they might choose not to buy it at a higher price and just choose to use their SPR or start exporting it themselves - like they did with other commodities,” Jodie Gunzberg, global head of commodities and real assets at S&P Dow Jones Indices, said at an S&P Global conference last week, according to CNBC.

According to Orbital Insight oil data, China has the leverage to do so.

By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oilprice.com:


Download The Free Oilprice App Today

Back to homepage





Leave a comment
  • GREGORY FOREMAN on October 10 2016 said:
    The US government doesn't have the common sense, intestinal fortitude or foresightedness to aggressively pursue an expansion of our Strategic Reserves. When oil was selling for $25-30 a barrel our government, should have purchased millions of barrels of oil but also to increase our storage capacity to between 1.50-2.00 billion barrels of oil. Why? The SPR's capacity was established in the 1970's when US fuel consumption was much lower than today.
    Furthermore, oil distribution from the reserves to processing currently would require 13 days. From the date the President issued the executive order calling for distribution from the reserves whatever oil pumped would require another 13 days to reach processing facilities. This timetable should be cut back to not more than 30-36 hours, a day to a day and half.
    The SPR is a national resource which has and still is being ignored. The US has sat on its laurels, had become spoiled with respect to oil and oil production. People forget, the difference between oil surplus and oil shortage is merely a matter of a few hundred thousand barrel of oil which could "disappear" within a matter of days.
    We should not be left behind the curve on this issue.

Leave a comment




EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News