China and India Planning to Create (and Ramp) Strategic Oil Reserves

China and India Planning to Create (and Ramp) Strategic Oil Reserves

Energy expert Matt Badiali writes in DailyWealth that plans out of China and India to create strategic oil reserves of their own could put a floor under the price of oil for years to come:

China and India are faced with the same dilemma the U.S. faced in 1973. Neither country has enough petroleum to keep its citizens rolling for long. Both are exposed to a dangerous, economy-killing oil shock. And both are starting to build and fill strategic petroleum reserves of their own. They have no choice but to buy oil like crazy at these levels.

China has about 102 million barrels already in reserve. It plans to add another 168 million barrels of storage starting this year. It will finish its planned 500 million barrel reserve – equal to three months of imports – by 2020. To hit that mark, China will need about 122,000 extra barrels of oil per day.

India has just 9.8 million barrels of crude oil stashed so far. It plans to put 40 million barrels into a strategic storage by next year. That will amount to 80,000 extra barrels of oil purchased per day.

So China and India together need to buy about 200,000 extra barrels per day. That would consume an additional 1.1% of world exports. And remember, Libya’s oil used to account for 5% of world exports. This oil could be offline for years.

Full article – DailyWealth: How China and India Are Set to Slam the Price of Crude Oil

Wow – those are pretty big numbers.  Of course they could be in jeopardy if/when China and India go bust, but who knows when that could be – in the meantime, this stockpiling should continue.

crude oil price chart march 2011It is a full-on BULL MARKET in the black goo!