China's oil reserves have been selected for high oil prices to avoid international oil price speculation

Due to the accidental reduction in crude oil inventories in the United States and investors’ concerns about the supply of crude oil in the Middle East, international oil prices have continued to rise. New York and London crude oil have already exceeded $100 a barrel. On February 23, New York oil prices closed at 107.83 US dollars per barrel.

As the national oil reserve management and enforcement agency, the National Development and Reform Commission, PetroChina, and Sinopec have been facing reserve pressure brought by high oil prices in recent years. The reporter learned from the person familiar with the matter that, in order to escape the speculation of international oil prices, China’s oil reserves have begun to purchase lower-quality, lower-quality crude oil as a reserve.

National Reserves Purchased High* Oil In February, international oil prices surged one after another, returning to the era of oil prices at $100/barrel. The oil price exceeds 100 US dollars and is no stranger to the Chinese oil reserve. From January 2, 2008, when oil prices exceeded US$100/barrel for the first time, the decision-making layer of the national oil reserve began to plan how to improve its own oil reserves under high oil prices.

"Oil prices have risen relatively quickly. We have now adopted a policy of coping with the purchase of relatively high-quality oil products and lower-quality oil products on the international market," a person involved in oil reserves told reporters. Prior to this, PetroChina and Sinopec had been purchasing conventional oil products as oil reserves.

The reporter learned that when China constructed the first batch of oil reserve bases in 2005, the main reserve varieties were set as light crude oil. Now, high reserves* oil has become an important strategic choice for the national oil reserve to cope with high oil prices. "In the design of the second batch of oil reserve bases, we all used reserve tanks with high oil reserves," the above sources told reporters.

High*oil is a crude oil that contains high amounts of crude oil because it is corrosive to the refining and the equipment used, and there is also environmental pollution in the refining process. "Therefore, fewer people buy in the international market and the price is much cheaper. According to the reporter, depending on the content of oil and other impurities, the price of high* oil is between 10% and 20% lower than the price of low* oil. However, at the same time, high-grade oil also has an advantage for storage. “In the storage process, light crude oil is easily solidified, and it needs to be heated when it is taken out. The cost of storage is relatively high, and the cost of oil and heavy oil is high,” said the person familiar with the matter.

It is understood that China's second batch of oil reserve base will be put into operation in 2012, that is, from this year began to purchase oil for storage. The total reserve is 170 million barrels.