What will it take to raise oil prices? On Monday, a Saudi Aramco supertanker was hijacked by Somali pirates. Chevron and Shell both announced pipeline disruptions in Nigeria. And yet crude oil prices barely moved, still trading around $56 a barrel.

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Feasting on China (AP)

The oil market seems particularly gloomy about China, the source of much of the world’s recent increase in oil appetite and—now that developed countries are in recession—the last bastion of growing oil demand. So how bad is China?

Chinese oil companies say the aftershocks of the credit crunch are starting to kick in. The government’s $586 billion stimulus package won’t be enough to keep growth at recent levels, analysts say. Other leading indicators such as electricity use and industrial output are also down, all pointing to less oil consumption.

What about other leading indicators, like crude oil imports? Those rose a none-too-shabby 28% in October, hardly the sign of a demand contraction, Barclays Bank says. Until China’s economic wobbles really translate into lower demand for crude, oil markets are making much ado of nothing, the bank contends: “[T]he point remains that China’s role in the general demand-led depression is all about the perception rather than the reality at this juncture.”

OPEC as well is still relatively bullish on China. The oil cartel, in its latest monthly oil market outlook, said it expects Chinese oil demand to increase next year despite the economic turmoil, meaning global demand will increase as well. That’s a rosier outlook than the U.S. Energy Information Administration, which figures any Chinese demand growth will be offset by slumps in rich countries.

The oil cartel also said that OPEC production has fallen just 400,000 barrels per day since August, despite announcing effective production cuts of 2 million barrels a day in that time. That means, if OPEC members fully comply with cuts already in the works, another 1.6 million barrels have to come off the market. If OPEC members fudge their production cuts as usual, that would still take about 1 million additional barrels off the market.

Maybe that explains why, after plenty of saber rattling last week about new production cuts, OPEC now says it will most likely take a breather at the Cairo summit later this month, and delay any decisions of additional production cuts until December.

WSJ ARTICLE