As we look at the world market for fuels, one of the major growth areas in demand continues to be China. And, given their considerable potential impact on which product goes where and from what resource, in the future, it is interesting to put a few news items together and see where the wind is blowing.

One could start by noting that China's economy has been growing at 10.7% this year about 2.7% above the initial target of 8%, a number that has also been set as the official rate for next year, at this point. And while there are some publicity stunts, such as trying to stop private cars driving for a day, that will both highlight the current reported consumption of 8.7 mbd by those cars, it will also highlight the benefits of public transportation, one can assume that the current trend of higher than official growth rates may well continue. However even though the power generation system is currently hurting due to a drought that has lowered water levels, newly built coal and natural gas plants should cover the shortage.

China's seasonal hydropower output has been falling since August as dry weather shrinks reservoirs, but two years of rapidly rising coal- and gas-fired power generation should prevent another surge in oil demand.

Power generation from hydropower plants -- which can produce up to a quarter of China's electricity -- fell 10.3 percent on year in October, raising the burden on other plants to meet China's 10-plus percent growth in electricity demand.

Output was down by 8 percent and 4 percent, respectively, in the preceding two months, as water reserves shrank and the southwest was crippled by a drought that state media said was the worst in over a century.