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.
China was the trigger of the last commodity rally and might very well ignite a decent upsurge on this news. Don`t forget that China will be the world`s biggest economy in 15 or 20 years.
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.
China will push ahead with building the second phase of its strategic oil reserves, having largely completed the first, Zhang said.
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.