China Flooded With Oil

I heard this on Monday. I wonder what the average price is of the 100 million barrells? I bet like most government purchases, that it is much higher than it should be. Buy high and sell low tends to be the typical government investing mantra. It sounds like they are still buying though.

ww.reuters.com/article/rbssEnergyNews/idUSPEK20879620090309

* China ship exec says strategic oil reserves full up
* First acknowledgement of 100 mln bbls govt inventories
* Urges Beijing to rent floating storage to add to stocks (Adds more analyst comment, corporate reserve, writes through)

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China plans to build a second-phase strategic reserve that will nearly triple the first batch to 280 million barrels by 2011, and industry executives have said the current storage capacity has already become a hurdle to bringing in more imports.

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The remark is consistent with recent comments by government officials that China should better use its massive foreign exchange reserve to stock up key commodities from grain to metals to crude oil, and last week Beijing announced that it would boost its budget for stockpiling resources by $10 billion.

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Together with record high stocks of gasoline and diesel accumulated ahead of last summer's Olympics, the stockbuild also meant Chinese oil demand may have slowed more than it appeared.