AFRICANEWSWIRE.NET (April, 28 2012) Danny Esposito, co-editor for Penny Stock Detectives, believes that, although the tensions in Iran are keeping oil prices elevated, there is another factor that is receiving less attention. In his recent Penny Stock Detectives article, Esposito argues that China’s growing demand for oil and the fact that it has small strategic reserves mean that the country does not want to be in a situation where it is scrambling for oil during a conflict with higher oil prices. That is why China is importing oil at a record pace in 2012, according to Esposito.
“In February, China’s imports of oil reached a record 5.95 million barrels a day. In March, this pace slowed somewhat, but it is still at an elevated 5.55 million barrels a day,” notes Esposito. “So, while demand is slowing somewhat in many countries of Europe and in the U.S., China is stepping in and buying all of the oil it can, ensuring that oil prices will remain at elevated levels.”
As Esposito outlines in his recent article, China has built out its strategic reserve capacity to house 170 million barrels of oil, but it probably has room for more, as evidenced by the record buying spree. Although many are puzzled with China for buying when oil prices are so high, says Esposito, China figures that oil prices will be much higher should a war with Iran begin.
China is reacting to the developments with Iran, which are not going well, in Esposito’s opinion. The editor reports that, a few weeks ago in Turkey, Iran and six leading nations’ representatives, including the U.S. and Israel, sat down to discuss how Iran can comply with measures to halt its weapons ambitions. The talks were said to be constructive to the point where enough progress was made to schedule another round of discussions at the end of May.
According to Esposito, Iran must agree to take concrete actions, at the end of May, to comply with the nuclear energy demands of the other six nations. While many nations are encouraged by the talks thus far, says the editor, Israel is saying this simply gives Iran the green light to continue with its nuclear energy ambitions unencumbered for another month.
Esposito feels that these are not encouraging words and will continue to put pressure on oil prices until the meeting at the end of May. Israel is growing very impatient with Iran’s nuclear energy ambitions and is continuing to view these talks as stall tactics. The threat of Israel attacking Iran should continue to keep oil prices high, in Esposito’s opinion.
Esposito says that high oil prices are reducing the demand in many parts of the world, including the U.S. and Europe. However, he thinks that continued tensions with Iran and China’s record importing of oil will ensure that oil prices remain at the high levels for the balance of 2012.
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