The Oil Drum

125 comments on Perhaps we are getting a little more attention

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BaSE on April 26, 2006 - 12:49am

http://www.tmcnet.com/usubmit/-chinas-oil-prices-forecast-rise-/2006/04/25/1604426.htm
"With international oil prices breaching US$75 per barrel, China's crude prices, which fluctuate with international benchmarks, are expected to rise considerably as well. The country's Daqing crude price is forecast to rise to 4,701 (US$586.55) yuan/ton in May, 421 yuan/ton higher than that in April"

One last try. Does this indeed mean that China expects oil to go to $83/b on the June contract, and does this mean that they are willing to bid to $83/b next month?

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smekhovo on April 26, 2006 - 8:25am

I don't think you have the conversion factor barrels/tonnes right.

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BaSE on April 26, 2006 - 11:33am

No, I was assuming 7 barrels per ton.

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GreyZone on April 26, 2006 - 10:18am

Perhaps an industry person can comment in more detail but this chart indicates that 1 ton of oil averages 7.33 barrels. Note that actual barrels per ton depends on the specific gravity of the particular oil in question. The exchange rate of yuan for dollars that I can find today is 0.124844 per dollar.

A price of 4701 yuan thus translates (today) into $586.89 which is close enough to the original poster given currency fluctuations. At $586.89 per ton, this works out to $80.06 per barrel.

So yes, the Chinese appear to be willing to bid oil above $80 per barrel soon.