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By Lin Guan (chinadaily.com.cn)
Updated: 2007-08-20 18:06

The Huangdao strategic oil base was completed in June, but given the skyrocketing oil prices, the base will not begin storing oil immediately, Qingdao City vice mayor Wang Shujian told foreign media, Ce.cn reported.

Analysts pointed out, the statement from Wang is intended to prevent international speculators from raising oil prices.

Sources said the base planned to take in both overseas and domestic refined oil. But oil prices have remained high since June, causing loss in domestic refineries, and reducing refined oil supply. Wang said the Huangdao base, planned to provide crude oil for domestic refineries, will not purchase oil until prices become more reasonable.

Huangdao is in the first list of strategic oil bases with other cities including Ningbo, Zhoushan, and Dalian, each restoring 10 to 12 million tons of oil. Currently Ningbo and Zhoushan bases are already been in operation.

As China relies more on oil import, domestic oil prices are very vulnerable to oil price fluctuations and shortage of oil supply in international markets. China marked a record high proportion of imported oil of 48.8 percent in July, and the four oil reserves are expected to play an important role in stabilizing domestic oil prices.

Some analysts in the international market think the oil demand from emerging markets, including China, currently the second largest oil consumer in the world, are pushing up oil prices.

When the Ningbo oil base laid its foundation in the second half of 2005, global oil prices soared, so this time the Qingdao government is sedating international oil speculators by not starting the Huangdao base right on its completion.