Before you blame Bus…

Before you blame Bush for high oil prices, don’t forget that there’s a whole world out there that has an effect on it as well.

EVIDENCE is mounting that China is buying more oil than it consumes, raising fears that oil hoarding may be supporting the current high price of crude.
The signs of aggressive Chinese stockpiling emerge from research by Merrill Lynch, the investment bank, which suggests that China is importing crude and refined products at twice the rate of growth in actual demand.

Rampant economic growth in the People’s Republic over the past two years has enabled China to overtake Japan this year as the world’s second largest oil consumer, burning some 6.3 million barrels a day.

Projections of the rate of growth in consumption in the People’s Republic suggest that China’s power generators, road hauliers, petrochemical plants and factories will burn an extra 500,000 barrels a day of crude oil this year. But Merrill Lynch’s analysis of implied demand, based on import data in the first and second quarter of this year, suggests that demand will increase this year by one million barrels a day.

Michael Rothman, Merrill Lynch’s senior energy analyst in New York, reckons that the second figure is not real consumption and does not reflect actual burning of crude in Chinese cars and power plants.

“It appears to be a hoarding phenomenon and we think it has to run its course, and when it does pass, prices should gravitate much lower, somewhere down towards $30 per barrel.”

It’s easy to blame one guy (that you may hate) for all the ills of the world. Too easy. It’s also rarely correct.

Oh, and if you think Bush went into Iraq solely to get cheap oil, you’re in the same rut. (Of course, at this point in time, you may really be wishing that this alleged cheap oil would get flowing, so the pump prices would come back down, eh?)

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