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The oil reserves that have been debated for many years will finally start to enter oil for the first time in the fourth quarter of this year, but the high oil price has paved the way for oil injection
A few days ago, there were many explosions in London, UK, which caused the high oil price to fluctuate sharply. With the rise and fall of terrorist events, oil security and other issues have attracted more attention. In the past few years, the establishment of strategic oil reserves has always been "only heard the sound of stairs, no one came down". Recently, Zhang Guobao, Deputy Director of the National Development and Reform Commission, said in New Orleans, the United States that China has been developing from the fourth quarter of this year
The government will inject oil into the strategic petroleum reserve. This indicates that China's strategic oil reserve work will enter the implementation stage.
"This event has been waiting for a long time, and it should have taken action long ago," said Deng Yusong, deputy director of the Comprehensive Research Office of the Market Economy Research Institute of the Development Research Center of the State Council, who had participated in the research on oil reserves, "However, we should not be too anxious to start the implementation now. After all, the establishment of oil reserves is a long-term strategic project. In the future, oil reserves will be completed in a controllable and gradual way."
The oil injection of oil reserves is "late"
Since China approved the establishment of oil reserves in 2003, the work of relevant parties has been carried out in an orderly manner: first, the Strategic Oil Reserve Office of the National Development and Reform Commission was established to take charge of the overall planning of the country's oil reserves; Later, Zhenhai, Zhejiang, Zhoushan, Dalian, Liaoning and Huangdao, Shandong were determined as reserve bases. These preparations have laid the foundation for the next step of oil injection.
According to Yang Renhai, deputy head of the preparatory group of Zhenhai Base, Zhenhai is the largest and fastest project among the four strategic oil reserve bases. Before the third quarter of 2005, the first phase project of Zhenhai base, including comprehensive supporting facilities, will be completed. By then, 16 oil tanks in 4 groups on the east line will be able to formally feed oil. In addition to Zhenhai, three other national strategic oil reserve bases are also under construction. It is expected that they will be basically completed in 2008.
"After the completion of the four major oil reserve bases, a total of more than 10 days of government strategic oil reserve capacity can be formed. In addition to the commercial oil reserve capacity of 21 days of imports within the national oil system, China's total oil reserve capacity will exceed 30 days of crude oil imports." Zhou Dadi, director of the Energy Institute of the National Development and Reform Commission, said.
While China is stepping up the establishment of oil reserves, the world oil price has experienced changes. At the end of 1998, the price of NYMEX crude oil futures was only about $11/barrel. From 2000 to 2003, the price of crude oil futures once hit the line of $37/barrel twice but failed to adjust. However, since May 2003, the price of crude oil futures has risen rapidly all the way, from $26/barrel to more than $60/barrel, reaching a new high.
Some experts believe that because the economy of developed countries has shifted to low energy consumption industries in recent years, and developed countries have generally established strategic oil reserves, they can cope with the emergency situation of sudden interruption of imported oil supply, while developing countries are different, In particular, the rising oil price poses a serious threat to developing countries such as China, which have a large amount of imported oil but not enough financial resources. According to the statistics of China Customs, in 2004, China imported 120 million tons of crude oil, an increase of 34.8%. The import volume grew at the fastest rate in four years, with the import value of US $33.91 billion, an increase of 71.4%. As the international crude oil price has repeatedly hit new highs, the average import price per ton has risen by 58.9 US dollars over the previous year, and a total of 7.068 billion US dollars of foreign exchange was overpaid in the whole year. This is a direct loss. If we consider the position of oil in the national economy, other losses are more difficult to measure. According to the rough calculation of relevant departments, if the oil price rises by 10 dollars/barrel, China's GDP growth will decline by 0.8 percentage points and CPI will rise by 0.4 percentage points.
It is better to inject oil into oil reserves sooner rather than later
"Since the oil reserve has been decided to be formally implemented, we should choose the right time," said Wang Jian, vice president of the Chinese Society of Macroeconomics
Wang Jian believes that although the current oil price is at a historical high, from the current situation, as long as the demand for crude oil in the international market continues to rise, the output of oil producing countries cannot fully guarantee the supply, the oil price will further rise. Philip Flegg, a famous energy market economist in Washington, had predicted that the oil price would break through the $60 mark this year, and even the $70 mark by 2006. Therefore, unless it can be accurately judged that the international oil price will reverse at a certain time, the later the oil reserve is established, the greater the loss may be.
"The oil price of $80 or $100 is likely to be normal in a few years. It seems that the state can no longer delay the establishment of oil reserves. It is obvious that it will take a lot of risk to hope that the oil price will be established again when it reverses and falls," Hong Jiangyuan, a medium-term analyst in Shenzhen, said, "CNOOC will not hesitate to use $18.5 billion of cash to acquire Unocal without ruling out similar considerations."
The establishment of oil reserves is not achieved overnight. Xie Guozhong, chief economist of Morgan Stanley, believes that China can only establish its own strategic oil reserve facilities in a few years, so it is unlikely to constitute the current oil demand. Moreover, even if there is a large demand, China will also consider special solutions. For example, Saudi Arabia recently hinted that it might produce more oil than the OPEC quota to meet China's needs for strategic oil reserves, so as to avoid chaos in the world market.
"China's establishment of strategic petroleum reserve is from the perspective of petroleum strategy, and the purpose is to maintain China's oil security. The income of oil price should not be the focus of consideration. In addition, from a worldwide perspective, the establishment of strategic reserves is generally losing money. For example, under the current high oil price, the United States, Japan, Europe and other countries are also increasing their strategic oil reserves. Why they do so undoubtedly anticipates that there is still great uncertainty in the international oil market. For China, the faster it starts to build its own reserves, the sooner it can cope with sudden supply disruptions. " Zhong Wei, director of the Financial Research Center of Beijing Normal University, said.
An expert from the Energy Institute of the National Development and Reform Commission also believed that although the government may consider more energy security and less cost saving in the process of establishing oil reserves, this does not mean that China will import oil on a large scale to meet its reserves when the oil price is too high. A more economical way is to use your own oil to inject reserves in advance, that is, to redistribute the surplus oil imported in China, which can reduce the cost of establishing oil reserves.
Oil reserves are gradually developing
"Oil injection is only a small step in the process of establishing oil reserves, and the country must have a longer-term plan for the construction of strategic oil reserves." Wang Jian said.
According to the reporter, the National Development and Reform Commission and other relevant departments have formulated a preliminary long-term plan: the total planned investment will exceed 100 billion yuan, including hardware facilities such as oil depots and oil reserves. These projects will be completed in three "five-year plans". The first phase of the project was started in 2003 and is planned to be completed by 2008. At the same time, the site selection for the second phase project has also begun. In the further third phase project, the strategic oil reserve depot in the inland hinterland is also under planning. According to a report of the National Development and Reform Commission, the location and layout of specific oil reserve bases will follow the principles of convenient oil inlet, smooth outlet, proximity to refineries and quick response. After the completion of the whole project, China's strategic oil reserves will basically be in line with the international standards - equivalent to 90 days of net imports. At that time, the long-term goal of China's strategic oil reserve is expected to be achieved.
However, some experts believe that oil reserves should not be limited to the construction of the government, and China's strategic oil reserves should also include private (oil enterprises) commercial reserves. Xu Lingming, from the State Petroleum Reserve Office, said that the state is a major investor in strategic petroleum reserves. It is necessary to further establish a mechanism combining government reserves and private reserves through legislation, give full play to the enthusiasm of petroleum enterprises and all sectors of society, and gradually achieve the overall goal of national petroleum reserves.
There is also a difficult problem for the government reserve to stabilize the abnormal price fluctuation, that is, it is impossible to determine the dilemma of "bandwidth rules". The so-called bandwidth refers to the "limit of rise and fall" of oil prices. When the fluctuation reaches the upper and lower limits, the relevant government departments will intervene to release stocks or absorb cash. If the bandwidth is narrow, the willingness to stabilize price fluctuations is strong, and it is vulnerable to attacks from market speculators, leading to the relaxation of intervention bandwidth; If the bandwidth is large, the relevant government departments will easily not use the inventory or absorb the spot, resulting in a long-term high inventory static lag, resulting in an extremely high cost of maintaining the level inventory. Because of this, there is no successful precedent for the application of government reserves in the international practice of stabilizing abnormal price fluctuations. Private commercial reserves are more likely to play a role in stabilizing the abnormal fluctuations of domestic oil prices because the main body of reserves is a number of rational individuals with strong incentive and constraint mechanisms.
Wang Jian said that both government reserves and commercial reserves are understood to be in kind. In fact, we should also consider the form of strategic reserves in a broader sense. For example, the state can set up oil investment companies similar to Huijin, which are specialized in acquiring the shares of foreign oil companies or large oilfields. This way of controlling reserve resources from the source is more practical than just reserving some crude oil in tanks.
Expert comments
Establish oil reserves sooner rather than later
Deng Yusong
If the strategic oil reserve can be established earlier, although China still needs to import a large amount of oil, the economic cost is obviously much less than now. The first reason is that there is more bargaining room in the long-term contract negotiation with the seller of oil, so as to avoid buying up to a certain extent; Second, it can enhance the moderate buffer capacity for changes in international oil prices and build a protective wall for domestic oil prices. Now, it is not too late for the relevant departments to accelerate the progress of the establishment of oil reserves.
According to international experience, some countries have established strategic oil reserves integrating government reserves and private reserves. This is reasonable, because strategic reserves generally have two functions: to ensure the uninterrupted supply of crude oil and to stabilize the abnormal fluctuations of domestic oil prices. Among them, government reserves are generally applicable to the former function, while private commercial reserves are applied to the latter. Their roles should not be confused. If government reserves want to sell high and absorb low to stabilize abnormal price fluctuations, there is a problem in judging the trend of oil prices. Assuming that the oil reserve authority has the ability, it is estimated that the reserve will be thrown out when the oil price keeps rising; It is estimated that the purchase and hoarding of oil prices will continue to fall. However, if the oil reserve authority is unable to do so, the actual operation will lead to the pursuit of rising and falling prices, which will further disrupt the formation mechanism of the oil price market.
In fact, China's demand for crude oil, which is up to 6.88 million barrels a day, has already attracted the attention of speculative funds in the crude oil market. China announced the "oil injection" plan, but did not say how large the scale would be and would not give the market a clear expectation. Moreover, the construction of China's oil reserves is also gradual and will not have a fundamental impact on the supply and demand pattern of the world oil market.
(The author is the Deputy Director of the Comprehensive Research Office of the Market Economy Research Institute of the Development Research Center of the State Council)
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