CHINA’S SECRET OIL STOCKPILES EXPOSED IN NEW SATELLITE IMAGES

GilbertoMejia

Winter energy prices are likely to rise, but not because of this week’s decision by OPEC. Instead, energy traders say, look to China.

Earlier this week, OPEC—14 nations representing just under half of the world’s oil production—reached a gentlemen’s agreement of sorts to trim crude oil production by 700,000 barrels a day from more than 33 million barrels a day sometime later this year. That announcement briefly nudged oil prices back up toward $50, but prices have eased again on concerns that OPEC, notorious for not sticking to its agreements, won’t stick to this one either.

What’s more likely to keep winter energy prices propped up, energy traders say, is the secretive stockpiling of crude oil by China, the world’s second-largest consumer of oil next to the U.S. New data released on Thursday by geospatial analytics firm Orbital Insight shows that China has been under-reporting its oil stockpile—and continues gobbling up supplies on the global market.

Try Newsweek for only $1.25 per week

“China seems to be building tanks and filling them fast—and building more tanks just as fast or even faster,” Orbital Insight’s CEO James Crawford tells Newsweek. He notes that satellite images obtained and analyzed by the company confirm China’s oil supply has risen to 600 million barrels as of May 2016 and shows no sign of slowing down.

That’s up from 585.6 million barrels in 2015 and 519.9 million barrels in 2014, Crawford says, citing earlier data from satellite images also analyzed by Orbital. Total supply includes both commercial and strategic barrels, he said. The company’s data does not differentiate between the two, as both types of barrels are often commingled inside the same tanks.

China’s oil imports hit a new record earlier this year, surging above 8 million barrels a day and climbing 16 percent on the year as of June. Notably, its rising imports in the first half of the year overlapped with higher U.S. energy prices headed into the summer. Crude oil prices started out in 2016 below $30 a barrel, with retail gasoline prices in many parts of the U.S. dropping below $2 a gallon. But oil jumped above $50 by June, partly due to petroleum purchases by China, a price point it’s now targeting again.

An engineer walks past piles of oil tanks at a PetroChina's oil refinery in Lanzhou in Gansu province on April 21, 2008.REUTERS

Orbital also revealed Thursday that its satellite images uncovered oil storage tanks in China previously unknown to international organizations, noting that as of 2014, China had 2,100 commercial and strategic petroleum reserve tanks with a storage capacity of 900 million barrels. That’s four times what industry reports indicated at the time, the company says. While Orbital Insight is still in the process of analyzing storage capacity data for 2015 and 2016, Crawford says so far there’s no indication that China is easing up on building more storage.

“Storage capacity seems to still be rising along with supply,” Crawford said. “It really represents China’s capacity to take advantage of any price swings in the market,” because the more storage it has, the more room it has to buy oil when prices are low.

Given its outsize influence, China’s activity in the market is likely to have greater ramifications than OPEC going forward, although any reduction in the global oil supply would make petroleum products such as gasoline and heating oil scarcer going into winter.

“At the end of the day, the reality of the OPEC cut is that it may not mean much, because OPEC members often don’t comply,” a bank trader told Newsweek, asking not to be named because it is the policy of his firm, one of the world’s top physical buyers of oil. “And if that happens, that will leave the onus on Chinese demand over OPEC.”

Oil prices leapt as much as $3 a barrel following OPEC’s announcement of its agreement, but edged back to hover at $45 a barrel Friday, as details of OPEC’s plan won’t be cemented until its next meeting November 30. And even then, nothing is guaranteed, experts say, because none of OPEC’s members have to follow any agreement they hammer out. (That’s why calling OPEC a “cartel” is a misnomer: Obedience is not mandatory.)

Meanwhile, China’s role as a major oil buyer could keep prices firm going into 2017, the trader says. He expects China likely will be very selective about when it dips into the market. “They’re very market-savvy, so they’re not going to buy above $50,” he says. “They’re targeting the low- to mid-$40s.” That means prices may have trouble falling below the mid-$40s and staying there as long as China is buying.

Orbital Insight calculated China’s unreported oil supplies and oil storage capacity by analyzing high-resolution satellite images of the country’s storage facilities. The company uses algorithms to quantify oil supply and oil capacity by monitoring the changing shadows cast by the floating roofs of the storage tanks, which rise as supply increases and fall as supply decreases. Crawford says the company tracks oil supplies not just in China, but around the world, and has back-tested the results of its readings against historic satellite and oil data to confirm their accuracy.

Orbital’s statistics on China are particularly useful, because they’re based on independent and unbiased measurements from satellite images collected two to three times a month, whereas the country is not always truthful about its economic data. And even third-party surveys are often guesstimates.

A startup based in Palo Alto, California, Orbital launched in late 2013 and has been selling its data primarily to Wall Street clients that use its satellite-based monitoring tools to place million-dollar bets on the market. In fact, Crawford says, the financial sector represents the company’s dominant revenue stream. “We’re always telling our clients, ‘Tell people about us!’” he says. “And they say, ‘We love you guys, but you know we can’t do that.’” Orbital also works with the World Bank and a number of U.S. government agencies Crawford won’t name. The company works with more than 70 asset-management firms.

Thursday marked the launch of the company’s China Oil data service, which builds on its U.S. oil market data, as well as other monitoring tools that use satellite imagery, algorithms and large-scale analysis to track everything from global crop yields to poverty rates to nearly 100 U.S. retail chains, such as Wal-Mart and Macy’s. The company analyzes retail parking lot counts, freshwater reserves and global trade.

“By the middle of next year,” Crawford says, “Our oil data will not just cover the U.S. and China, but the whole world."

http://www.newsweek.com/china-satellite-imaging-secret-oil-stockpiles-opec-prices-winter-504821
4 D9 F7 G% K9 o/ H8 {9 v- `' z

Vincent855

楼主加油，我们都看好你哦。

GilbertoMejia

thanks, include a 石皮解, patch or a solution?