China to Build 11 New Oil Storage Sites in 2 Years

Core Insights - China is constructing 11 new oil storage sites with a total capacity of approximately 169 million barrels, aimed at stockpiling crude oil while prices are low [1][2] Group 1: Storage Capacity and Imports - The new storage capacity is equivalent to two weeks' worth of crude oil imports [2] - Between 2020 and 2024, new oil storage capacity additions are projected to be between 180 and 190 million barrels [2] Group 2: Crude Oil Purchasing Trends - China has been purchasing more crude oil than it can consume or export, benefiting from stable prices and discounts on sanctioned crude from Russia and Iran [3] - In August, China was stockpiling crude at a rate of 1 million barrels daily, with an average rate of around 990,000 barrels daily for the year [4] Group 3: Future Projections and Market Outlook - Goldman Sachs predicts that the stockpiling rate may decrease to around half a million barrels daily over the next year [4] - Analysts anticipate that the oil market may face oversupply by the end of this year or in 2026, potentially driving prices lower, with Brent crude possibly falling to $50 or below [5] - Goldman Sachs estimates a supply overhang of approximately 1.9 million barrels daily, while the International Energy Agency predicts a record overhang of up to 3 million barrels daily [6]