China plans to use the fall in global energy demand to boost its fledgling oil reserves against future supply shocks, as it speeds up development of nuclear and wind power and cuts reliance on coal, a top energy official said.
Setting out the nation's policy responses to the global economic crisis in an unusually detailed exposition of its energy strategy, Zhang Guobao, head of the National Energy Administration, said: "The severity of the economic downturn has brought a marked decline in demand for oil and unprecedented pressure on prices. The amount of crude oil on the international market still far exceeds global demand."
In his article published on Monday in the official People's Daily newspaper, Zhang wrote that the global downturn had posed serious challenges to China's energy sector but also brought a rare chance to make adjustments.
Among the plans, China will push ahead with building the second phase of its strategic oil reserves, having largely completed the first. That could increase import demand and help global crude oil prices to get into forward gear, having been stuck in reverse since hitting a record high in July.
Industry sources have told Reuters that around 7.3 million barrels of oil were injected into Huangdao in early November and more stockpiling was planned in December and January.
The sources said more than half of November's oil came from Saudi Arabia. This tallies with Chinese customs data showing a 70% year-on-year rise in imports of Saudi crude last month.