China news agency Xinhua says that the country’s imports of crude oil rose 18% in the first eight months of the year to hit 108.2 million tons. "From January to August, China imported 110.4 million tons of crude oil and exported 2.18 million tons, said the General Administration of Customs (GAC)." And economists wonder whether the price of oil will continue to rise from its current level of $80.
OPEC recently agreed to raise oil output, but only by about 2% beginning next month. In the meantime, concerns about future production capacity appear to get worse. "The two arguments against 100-dollar oil, the ability of technology to raise new supply and the ability of prices to limit demand, are falling quickly by the wayside," said Jeffrey Rubin, an economist at CIBC World Markets told AFP news. And, his comments came before the news from China.
A CIBC report notes that China consumes more than double its daily production of 3.5 million barrels, while other fast-growing Asian nations like India, Malaysia and Thailand are also boosting petroleum use.
The move toward $100 per barrel oil has begun to look inevitable.
Douglas A. McIntyre
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