- HONG KONG -- China's fast-growing
economy has overtaken Japan to become the world's second largest consumer
of crude oil after the US, according to the International Energy Agency
(IEA) and the Chinese government. Advertisement
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- Latest IEA estimates say China consumed 5.46m barrels
a day last year, compared with Japan's 5.43m b/d. In the last quarter of
2003, the IEA says, China was the "main driver of global oil demand
growth".
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- The US remains by far the biggest oil user, consuming
more than 20m b/d. The growth in Chinese demand is expected to continue
this year, at a time when Opec has little room to boost oil output and
US commercial oil inventories are at their lowest levels since 1975, creating
tight conditions in the global market.
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- Benchmark US crude futures hit $35.95 a barrel yesterday,
their highest level since US-led forces invaded Iraq last March.
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- The latest figures underline China's thirst for natural
resources to fuel its industrial revolution. Yesterday, China reported
economic growth of 9.9 per cent for the fourth quarter of 2003, taking
full year growth to 9.1 per cent.
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- They also confirm that the economy - to the dismay of
the ruling Communist party - is becoming ever more dependent on energy
imports, mainly from the Middle East.
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- On Monday Hu Jintao, Chinese president, begins a tour
that includes Egypt, Algeria and Gabon - all energy exporters.
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- Anxious to diversify its suppliers, Beijing has directed
its state-controlled companies to buy into oilfields around the world.
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- "It reflects the generally uneasy feeling in the
government," said Joe Zhang, head of China research at UBS in Hong
Kong. "Strategically, politically, militarily, somehow they don't
feel comfortable."
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- Chinese customs figures show the country imported a record
91m tonnes of crude oil last year, up 31 per cent from 2002. It also exports
oil and refined products, but by 2030 China's net oil imports are expected
to reach 10m b/d and meet more than 80 per cent of its demand, compared
with 35 per cent in 2000. Just over a decade ago, China was a net exporter
of oil.
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- Chinese demand has boosted oil tanker rates to near record
levels on the Middle East to China route. Rates have tripled since October,
and now exceed tanker rates from the Middle East to the US by 20 per cent.
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- Oil demand in China is rising because of rapid growth
in electricity generation and the dramatic increase in the number of vehicles
on the country's roads.
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- © Copyright The Financial Times Ltd 2004.
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