Power shortages could force diesel imports to resume

Drought and power shortages in parts of China could force state-owned oil companies to resume imports of diesel fuel.  Power shortages tied to government restrictions put in place to meet energy savings and reduce emissions brought about severe oil shortages in the fourth quarter of 2010. These restrictions caused industrial companies to turn to using diesel fuel power generators to maintain normal production. This, in turn, caused increases in oil demand beyond the industry’s capacity to supply.  Usual summer shortages further reduced oil supplies. The Sinopec Group, China’s largest oil refiner, announced a month ago that it was suspending oil product exports. Meanwhile, maintenance of domestic oil refineries led to a draw down of oil inventory two months in a row, exacerbating supply tightness. (June 7, 2011)