From ISN:
A notable feature of 2004 was its volatility in oil prices – New York light sweet crude prices reached a peak of US$55.67 on 25 October ending the year up 33.6 per cent at US$43.45 per barrel. While a number of supply-side and supply-chain factors have contributed to this situation, the most significant long-term factor contributing to rising oil prices is an increase in Asian demand, most notably from China. China’s unprecedented growth not only makes it a driver of a long-term increase in energy prices, but also the most vulnerable to rising oil prices. China, which has been a net oil importer since 1993, is the world’s number two oil consumer after the US and has accounted for 40 per cent of the world’s crude oil demand growth since 2000. China’s proven oil reserves stand at 18 trillion barrels and oil imports account for one-third of its crude oil consumption. China has initiated numerous policies to cope with its increasing energy needs, including stepping up exploration activities within its own borders, diversifying beyond oil to access other energy resources such as nuclear power, coal, natural gas and renewable energy resources, promoting energy conservation and encouraging investment into energy-friendly technologies such as hydrogen-powered fuel cells and coal gasification. China has also joined the United States and Japan in developing strategic petroleum reserves, with the creation of 75 days of emergency reserves in four locations in Zhejiang, Shandong and Liaoning provinces.
