EMerging Equity

By Jodie Gunzberg
Global Head of Commodities
S&P Dow Jones Indices

China Flag

Below are some quotes from the latest Oil Market Report from the IEA that may overpower Chinese slowing demand growth – even with a surprise interest rate cut.

“there is a degree of opacity”

“The Chinese administration does not routinely disclose information… thus little up‐to‐date official information is available”

“A particular uncertainty concerns the division between commercial and government storage”

“unreported stock building could be occurring at unreported commercial sites”

What are these quotes referencing? The Strategic Petroleum Reserve (SPR). Although China does not report what analysts are seeing as strategic buying on the oil price dip, (S&P GSCI Brent Crude is -31.2% off its peak Jun 19- Nov 21, 2014), the IEA guesses China added 13.5 million barrels in September as extra cargoes from Saudi Arabia, Kuwait, Iraq and Oman were imported.  This brings the 2014 YTD total to an estimated 105 million barrels of unreported…

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