Chinese strategic oil reserve full ?  

Reuters reports that the Chinese have filled their first stage strategic oil reserve - China govt oil reserve full - shipper.

China has filled all four of its state-owned emergency oil reserve tanks to the brim and should now invest in oil tankers to add more to inventories while oil prices are low, a senior industry executive said on Monday in a rare acknowledgement of Beijing's secretive oil inventories.

Coupled with data last week showing a one-third rise in commercial crude oil stockpiles last year, the admission suggests that a large share of of China's oil import growth last year was pumped directly into storage, and could be relied upon quickly to soften any demand recovery or if prices should rise.

It also backs up speculation that the world's No. 2 energy user has been making good use of oil's $100 price fall to boost supplies while demand falters in an unfolding economic crisis.

China Shipping (Group) Co President Li Shaode told Reuters on Monday that he had proposed that the government use some of its foreign exchange reserves on floating oil storage.

"The four onshore reserve bases have been fully filled, so we need to invest urgently in floating storage," Li said on the sidelines of the country's annual parliament.

The first set of China's strategic oil reserves, which can hold about 100 million barrels, were built over the past two years, but data on their status is considered a state secret and information about their operations or tank levels is scarce.

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.

Crude oil imports rose 9.6 percent last year to 179 million tonnes or about 3.58 million barrels per day (bpd), while implied oil demand rose by just 3.8 percent last year to about 7.26 million bpd, according to Reuters calculations.

China is taking the supply security issue more seriously than the market thought, says Yan Kefeng, Beijing-based senior oil analyst with Cambridge Energy Research Associates (CERA).

China cut its crude oil imports for four consecutive months since October 2008, against common belief that the country should make use of the plummeting crude oil prices and shipping cost to increase oil reserves.

Crude imports dropped to the lowest level in at least two years in February to 11.73 million tons, about 3.07 million barrels a day, according to data released by the customs department on Wednesday. That represents a drop of 19.7 percent compared to last February.

Analysts say the country's four strategic oil reserve tanks have already been filled and there are not enough tanks to store more, said the Shanghai-based Oriental Morning Post.