China denies responsibility for high world oil prices

Tension in the Middle East and speculators on international oil markets were to blame for high oil prices and not growing demand from China, a leading Chinese official was cited as saying. Zhang Guobao, vice chairman of the National Development and Reform Commission, told an energy conference in Amsterdam that China was currently meeting the bulk of its oil requirements through its own resources.
"The growth in demand from China for oil is not enough to affect international oil prices," he was quoted as saying. "The situation in the Middle East and speculators are contributing to the high prices. China is the world's second largest oil consumer and fifth biggest producer. Its oil imports reached 1.72 mm bpd last year, but that represented only a fraction of overall global demand,” Zhang said.

Some analysts have said that China is one of, if not the major reason, behind the surge in oil prices which has seen benchmark crude futures in New York spiking to a record high since they began tradingover 20 years ago. Although crude prices touched $ 40 a barrel in the run-up to the Iraq war last year, recent forecasts about global, and especially Chinese, demand appear to have been responsible for pushing oil prices well over the $ 40 mark earlier this year.
Analysts also noted that China's oil-producing needs were still being largely met by a field in Daqing in Heilongjiang province, whose resources, local authorities said earlier this year, were rapidly facing exhaustion.

North-eastern Securities analyst Li Hongbin disputed Zhang's comments, saying that China was playing a role in pushing up prices to multi-year highs.
"It is hard to tell exactly to what degree China affects oil prices, but the fast demand growth has definitely provided some kind of a boost," he said.
Li expects China's daily oil consumption to increase by about 10 % to 6.8 mm barrels this year from 6.2 mm last year, and for net oil imports to grow about 40 % to about 2.4 mm bpd.

The International Energy Agency said earlier that China's oil demand grew 18 % in the first quarter over the same period last year, with demand in February alone running at 6.38 mm barrels. US energy investment bank Petrie Parkman said in a recent report that China currently accounts for about 7 % of world oil demand, but that this could double by 2014.
"Bottom-line: Chinese oil demand growth is the single most dynamic factor in the worldwide demand picture over the coming decade, and critical to OPEC being able to expand output," it said.