In late November, the members of the Organization of the Petroleum Exporting Countries (OPEC) broke with tradition by not slowing down oil production - recognizing that under the circumstances, they were hardly in a position to push through higher prices.

Along with dwindling global demand - most recently due to the global financial crisis and overall economic malaise - one of the problems has been the emergence of new oil production options.

Behind the drop in prices is a new US competitor: Now, thanks to the new extraction method known as fracking, the Americans can extract natural gas from shale rock layers deep within the earth. The result has been a steep decline in the US demand for oil on the world market. And the United States has always been the world's biggest oil consumer.

The market now sees a daily surplus of 1 million barrels. In the summer, a barrel of Brent oil cost $115. It now costs $64 - the lowest price in five years.

It's not just people who heat their homes with oil who are benefiting from this development. China is too. China is second only to the United States when it comes to the consumption of crude oil. Last year, 12 percent of the global output went to China, making up about 60 percent of Chinese oil consumption. Beijing is now rushing to make the most of the drop in prices and top up its reserves.

DW columnist Frank Sieren

The country beefed up its crude oil imports in the first nine months of 2014 by 8.3 percent. China now has about 300 million tons of oil reserves - enough to ensure it could survive up to a month without oil imports. The Chinese are planning to increase their reserves to an import volume equivalent of 100 days by 2020.

Fracking in China?

So far 91 million barrels have been stored at four facilities. In the next phase, seven facilities with a total capacity of 191 million barrels are to be added. Experts estimate that from next year China will be able to import 700,000 barrels per day. But Beijing does not want to rely on falling prices in the long term and is, just like the US, experimenting with shale gas.

The country is in a good position: Nowhere else in the world are larger shale gas and oil reserves in shale suspected. But there is a problem. The shale deposits in China are not well situated from a tectonic perspective. Additionally, massive amounts of water would be required to force the raw material out of the rock. And water is a scarce resource in China. Water resources are barely enough for agricultural usage without wasting it on splitting rocks.

Water saving technology for breaking into the rock has yet to be developed. Beijing would be well-advised to work on the development of such methods. The US will in the future gradually become self-sufficient on the oil front thanks to fracking. Its demand for oil is falling. For China this is a long way off. Beijing's current path, relying on oil imports, is a risky game. Prices will not remain this low forever. But it is very tempting given the current situation. China is struggling with its lowest growth figures in more than a decade. In the past double digit results were the norm. This year the Chinese economy will grow by a little over 7 percent.

The low price of oil means a lower bill despite higher imports: Beijing stands to save $30 billion if it imports the same amount in 2015 as it did this year. If prices fall further it will save even more. This will increase the export surplus and help growth to approach the level of the previous year. So China can build up its reserves and earn money at the same time. The OPEC countries will be happy too as China helps to stabilize prices.

DW columnist Frank Sieren has lived in Beijing for 20 years.