China set to become world’s biggest net oil importer

China set to become world’s biggest net oil importer
Updated 18 August 2013

China set to become world’s biggest net oil importer

China set to become world’s biggest net oil importer

BEIJING: China is set to overtake the US as the world’s largest net oil importer from October, according to US figures, due to a combination of rising Chinese demand and increased US production.
Next year, China’s net oil imports will exceed those of the US on an annual basis and the gap between them will continue to widen, the US Energy Information Administration (EIA) said.
China is already the biggest energy user in the world and the second-largest oil consumer after the US.
The shift has been driven by steady growth in Chinese demand, increased oil production in the US, and stagnant or weakening demand in the US market, the EIA said in a report.
A graph on the EIA’s website shows China’s net imports steadily rising, with those of the US falling at a faster rate, and says the crossover point comes in two months’ time.
Growing petroleum production in the US has been largely driven by the increasing use of sometimes controversial hydraulic fracturing, known as fracking.
The technique uses huge amounts of pressurised water mixed with chemicals to crack open rock and release oil and natural gas, making the exploitation of vast shale hydrocarbon reserves economically viable.
It is changing the world’s energy market but it has been banned in other countries such as France due to environmental concerns.
US annual oil output is expected to rise 28 percent between 2011 and 2014 to nearly 13 million barrels per day, while Chinese production is forecast to grow by six percent over the period, and will stand at just a third of US production in 2014, the EIA said.
Meanwhile, China’s liquid fuel use will increase 13 percent over the period to more than 11 million barrels per day while US demand hovers close to 18.7 million barrels per day.
That is below the United States’ peak consumption level of 20.8 million barrels per day in 2005, the EIA added.
China imported 26.11 million tons (186.5 million barrels) of crude oil last month and its exports were a mere 0.17 million tons, according to official Beijing figures.
The Asian country’s ascendence to the top of the world’s net oil import rankings will have profound impact, an article carried by the China Business News said on Monday.
“China and the US will no longer be pure competitors in the energy sector — China is likely to import energy in bulk from the US,” wrote commentator Li Dongchao.
“The (rising) independence of US energy will support the rejuvenation of US manufacturing, which will renew competition with Chinese manufacturing,” Li said.
“Improving the safety and operational efficiency of the energy industry is a must for ensuring China’s energy and economic security.”


Intel avoids outsourcing embrace, investigates hack of results

Intel avoids outsourcing embrace, investigates hack of results
Updated 5 min 23 sec ago

Intel avoids outsourcing embrace, investigates hack of results

Intel avoids outsourcing embrace, investigates hack of results

The incoming chief executive of Intel Corp. said on Thursday that most of the company’s 2023 products will be made in Intel factories but he sketched a dual-track future in which it will lean more heavily on outside factories.
The lack of a strong embrace of outsourcing from new CEO Pat Gelsinger drove shares down 4.7% after hours. Shares rose 6.5% during regular trade, when the results were released ahead of the close. The company said it was investigating “non-authorized” access to some of the results, with the Financial Times quoting its chief financial officer as saying the microchip maker had been hacked.
Intel also forecast first-quarter revenue and profit above Wall Street expectations, continuing to benefit from pandemic demand for laptops and PCs that have powered the shift to working and playing from home.
Gelsinger said he was “confident that the majority of our 2023 products will be manufactured internally” though he also said the use of outside chip factories is likely to increase “for certain technologies and products.”
Intel has been considering since last July whether to drop its decades-old strategy of both designing and making chips by turning for help on its central processing units, or CPUS, to “foundry” manufacturers. Those partners could be Taiwan Semiconductor Manufacturing Co. and Samsung Electronics. Intel’s manufacturing technology, called a 7-nanometer process, is expected in 2023.
“We didn’t get our answer on which foundries and when,” said Patrick Moorhead of Moor Insights & Strategy. “They pushed the can down the road.”
Kinngai Chan, analyst at Summit Insights Group, said Intel is not likely to outsource its flagship chips.
“Intel’s 14-nanometer chip transistor speed has always been faster than what any foundry can offer even at 7-nanometer,” Chan said. “We believe it will increase its use of external foundries over-time — just not for its large-core CPUs.”
Keeping manufacturing in-house means higher investments. Bernstein analyst Stacy Rasgon questioned whether Gelsinger, currently the chief executive of VMware Inc. who previously spent 30 years at Intel and announced his intention to return just last week, has had sufficient time to dig into the issue.
“It was pretty obvious they were trying to borrow his credibility” when Gelsinger endorsed Intel’s delayed 7-naonmeter technology, Rasgon said.
Intel’s decision coincides with US lawmakers having passed bipartisan legislation to fund US chip manufacturing. But the new law has yet to specify funding levels or recipients, and Forrester Research analyst Glenn O’Donnell said Intel might take the opportunity to solicit US government support for domestic manufacturing.
Boosted by a new high-end PC processor, Intel regained some momentum in the PC market, with volumes of PC chips rising 33%, faster than the 26% rise for the overall PC market, according to data from IDC.
Data center group sales, which powered Intel’s growth over the past several years, were $6.1 billion compared with analyst estimates of $5.48 billion, according to FactSet data.
But sales to cloud computing customers, some of the largest and fastest-growing purchasers of data center chips, were down 15% in the fourth quarter. Data center chip operating margins were 34% in the quarter, down from 48% a year earlier.
“We think (data center) operating margins are going to improve as we get toward the second half of the year, when we expect to see a rebound in cloud” chip sales, Intel Chief Financial Officer George Davis said.
The company also raised its dividend by 5%.
The chipmaker said it expects fiscal first-quarter adjusted sales of $17.5 billion and adjusted earnings per share of $1.10, both ahead of analyst consensus, according to IBES data from Refinitiv.
Fourth-quarter revenue of $20 billion and adjusted earnings per share of $1.52 also beat Wall Street targets.