Forget Doha - Soaring oil demand in China to Rescue OPEC?

Chinese credit stimulus and a 20pc rise in public spending has set off a fresh mini-cycle of growth that is already sucking in oil imports at a much faster pace than expected. Barclays estimates that the country will import an average of 8m barrels per day (b/d) this year, a huge jump from 6.7m b/d last year. This is arguably enough to soak up a big chunk of the excess supply currently flooding global markets. ... Feifei Li, Barclay's oil analyst, said China is in a rush to fill four new storage sites of its petroleum reserve coming available this year. "It is an urgent priority of the government to fill up the tanks while the price of oil is cheap," he said. Fresh storage is likely to average 250,000 b/d, five times the level last year. The pace will rise further in the second half of the year. China is building vast underground rock caverns in the interior of the country as a top national security priority, fully aware of the way Japan was squeezed by the US fuel embargo in the late 1930s. It aims to boost reserves to 550m barrels and ensure a 90-day buffer to resist an external supply shock. China's own output of oil has fallen by 200,000 b/d over the last year as PetroChina and Sinopec slash investment, while demand has continued to grow. ... Set against the China effect - and against fast rising oil demand in India - the OPEC meeting in Doha is almost irrelevant, though it could lead to wild moves in the short run.