The National Development and Reform Commission predicts oil prices will rise to US$80 a barrel this year, up 25% from last year, the Wall Street Journal reported. The current price is US$74 per barrel. The agency says the price increase will be supported by a loose monetary policy that increases investments in futures markets. China’s apparent oil demand rose 15% in December from a year earlier, underpinning a 16% increase in the sale of oil futures from mid-December to January. Analysts point out that oil demand is still based on stimulus-backed projects and the real demand may not be obvious for months as credit is tightened. The International Energy Agency predicts China will need 8.82 million barrels of oil a day up 4.3% from 8.46 million barrels a day last year. A lack of transparency makes it difficult to determine Chinese demand.
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