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'Chinese Factor' Overplayed in Soaring Oil Price
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When authentic figures on the Chinese and world oil markets in 2005 finally became available, the truth about the so-called "Chinese factor" in the soaring international oil price was also disclosed -- it has been seriously overplayed.


The average WTI price in 2005 soared by 36.8 percent year on year to a record high of US$56.7 per barrel, while both the domestic oil consumption and oil import of China fell in the year.


According to the National Bureau of Statistics (NBS), the consumption volume of crude oil and oil products in China over the past year dropped 0.5 percent as against 2004.


A separate report issued by the National Development and Reform Commission (NDRC) shows that China's net oil import in 2005 was 136.17 million tons, 7.56 million tons less than the 2004 figure, or a decrease of 5.3 percent.


China imported 118.75 million tons of crude oil in 2005, 1.43 million tons more than in the previous year with a 1.2 percent growth, but only imported 17.42 million tons of oil products, a sharp 34-percent decrease from the previous year, or 8.99 million tons less in net volume.


As a result, China's dependency rate on oil import dropped to 42.9 percent in 2005, 2.2 percentage points lower than in 2004.


"If the international oil price had been driven up by the increase of China's oil demand, as some Western analysts believed, the global oil price should have dropped in 2005 as China's oil consumption and import both decreased," said Niu Li, an analyst with the State Information Center.


However, instead of going down, the international oil price showed a stronger soaring trend last year, reporting a growth that was even higher than the 2003 and 2004 level, Niu noted.


"Obviously, the so-called 'Chinese factor' is not the main driving force behind the soaring global oil price," Niu added.


According to BP Statistical Review of World Energy 2005, even in 2004 when China witnessed the fastest growth of its oil consumption in recent years, the country with more than 1.3 billion people just consumed 310 million tons of oil, or some 8 percent of the world's total consumption. Meanwhile, the US consumed 938 million tons of oil that year, 25 percent of the global total and three times of China's consumption.


Also according to the BP statistics, the net oil import of China in 2004 was less than 149 million tons, or some 6 percent of the world's oil trade volume that year. The net oil import of the US in the same year was 590 million tons, four times of China's.


In terms of per capita oil consumption, the level in the US and Japan is 14 times and 3.8 times, respectively, of the Chinese level.


Nevertheless, the Chinese government is increasingly alarmed at the country's soaring energy demand, which has come along with more than two decades of sustained, rapid economic growth, and is taking steps to curb oil consumption and raise energy use efficiency.


In the proposed 11th Five-Year (2006-2010) Guideline for National Economy and Social Development, which will guide the country's economic and social development in the coming five years once adopted in March by the National People's Congress (NPC), the country's legislature, China sets the goal of cutting its per GDP energy consumption by 20 percent by 2010 as against the 2005 yearend level.


Also according to the proposed guideline, in the next five years China will try to meet its energy demand mainly with domestic supply, and will take coal as the main source of energy. The country also vows to stress energy-efficiency and develop more new energies.


China's oil producers are also striving hard to raise the domestic supply of oil and natural gas. PetroChina Company Limited, the largest oil producer of the country, reported a record crude oil output in 2005, and its oil and gas output reached 1.034 billion barrels oil equivalent, up 5.5 percent year on year.


According to Sinopec Corporation's pre-audit operational data for 2005, the company produced 316 million barrels of oil and gas in the year. The estimated oil and gas output of China National Offshore Oil Corporation (CNOOC) in 2005 was 153 to 157 million barrels oil equivalent.


In all, China's oil and gas output in 2005 was around 1.5 billion barrels oil equivalent, or nearly 210 million tons oil equivalent.


(Xinhua News Agency February 11, 2006)

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