news.xinhuanet/energy/2015-01/12/c_127380249_5.htmAdding to the discussions on the effects of dramatic low oil prices, Xinhuanet has a long article giving their points of view: Adding to my details are the following: [1] Strategic Reserve of China. China has set a goal of keeping 90 days worth of petroleum for emergency use. But because the realities of Chinas own demands, they have been able to built a reserve of at least 60 days. The current low prces and over-supply allows China to embark on expanding the streategic stockpile to over 100 days. [2] Low prices is a boon to Chinese oil companies in that they saw during th western NINJA financial crisis, they were able to step out and secure long-term contracts. Now it is the same thing, they are rapidly going around the world tightening their future supply needs. [3] Low oil discourages new energy developments. That being the conventional wisdom, Chinese leaders are sticking to their 125 Plan to promote electric vehicles and so they are actually increasing their tax on gasoline to offset the lower prices. They see long-term instead of immediate situations. [4] Cascading effects of lowering industrial product costs. Oil is one big block of expenses for manufacturing and extend to raw material coming out of petro-chemicals. For all other manufacturers the dramatic reduction of energy cost give them a lot of breathing room in their profits.
Posted on: Mon, 12 Jan 2015 21:46:55 +0000
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