Commentary by Eric Wilder – China continued today acquiring oil and natural gas properties around the world. Joined by India’s Oil and Natural Gas Corp., China National Petroleum Corp. agreed to buy the Syrian assets of Petro-Canada for about $574 million dollars.
China’s CNOOC Ltd. failed to win a bid earlier this year for U.S. owned UNOCAL. China National Petroleum did, however, acquire PetroKazakhstan Inc. in a multi-billion dollar trade.
World oil marketers have taken notice. This is a tacit sign that China with the fastest growing economy on the face of the earth believes that crude oil has peaked and the easiest way to secure a supply is to purchase it from existing sources. This is alarming because state supported oil companies can pay a premium for reserves giving them an advantage over large private oil companies. Such state supported purchases of existing crude oil reserves can only result in continued crude oil price escalation.
Worried about the weather, marketers must now wonder about the effect on crude prices as China’s thirst for oil remains far from quenched. http://www.ericwilder.com http://justeastofeden.blogharbor.com http://ericwilder.blogspot.com
