Wednesday, August 26, 2009

China and Commodities

I appeared on CNBC's Closing Bell live with Maria Bartiromo today to discuss the impact of Chinese demand on commodity markets.

In the piece, I mentioned the 90 days oil import coverage that the International Energy Agency (IEA) requires member nations to have in storage.

The Chinese government now has 86 days of net oil imports in storage (25 of which are in its strategic stockpile). China needs to build inventories to 90 days in order to join the IEA.

The US meets the 90 day requirement with a combination of its Strategic Petroleum Reserve (SPR) and private storage.

China is following the example of the US and other developed nations in building a buffer of oil to cope with supply shocks.

(click here to view on CNBC's site if it doesn't open below)

Follow @CommodityMD