Low oil prices help China build reserves

China should make use of the declining oil prices to pile up its oil reserves, said a comment in the China Business News. Excerpts follow:

International oil prices have been volatile in recent months and will continue to be unstable for months to come, given the ongoing oversupply and a strong dollar. Speculative activities, of course, are primarily to blame for the recent slump in the oil prices, which also has something to do with universal pessimism about the economy.

It is unlikely that prices will stay at between $30 and $40 per barrel in the long term, because major oil exporters cannot afford to keep them that way forever. On the supply side, where there is likely to be a decline in investment and oil supply because many oil companies will go bankrupt, oil prices may go back to $50 per barrel because demand and supply will rebalance.