High oil prices spell producer profits

09:10, November 15, 2010      

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 China's oil and natural gas imports are estimated to exceed $100 billion this year while international crude prices will top $80 a barrel next year, all to the benefit of domestic oil producers, an industry scholar said Friday in Beijing.

  This year, China is expected to spend $100 billion on oil and natural gas imports or an increase of 10.9 percent, compared to last year, said Gu Zongqin, president of China National Petroleum. Last year, the world second largest economy spent $90.2 billion on oil and gas imports.

  Last year, China's crude oil imports accounted for around 52 percent of total petrol consumption, and Zong estimated that figure would jump to 55 percent in 2015.

  "In 2011, International crude oil prices are supposed to be around $80 a barrel, higher than this year," said David Hanna, senior director of Platts' Asia Business Development. "But it should be under $100 per barrel."

  "The Federal Reserve's recent announcement on quantitative easing is one major reason for higher crude oil prices in the future," said Niu Li, senior economist with the State Information Center. The rebounding world economy will drive oil prices higher next year, especially with surging oil demand from emerging economies such as Brazil, Russia, India and China, Niu said.

  Data from Platts, a global energy information provider, showed that around 10 percent of world crude oil demand comes from China, about half that of the US.

  But China accounts for 26 percent of worldwide emerging oil demand. In September, China's oil demand rose by 5.1 percent from the same period last year, which served to further strengthen oil prices.

  Within the oil sector, higher crude prices will benefit PetroChina, the country's largest oil and gas provider and Cnooc, China's largest offshore oil and gas company.

Source: Global Times


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