- Odds of a V-shaped recovery in oil demand are shrinking.
- Demand for jet fuel will continue to drag on global oil demand for at least another two years.
- Permanent changes in lifestyle and possible reduced commuting in developed economies could structurally reduce demand for oil products.
Demand for energy is a pretty good barometer of economic activity.
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ReplyDeleteOil demand has been in crisis for years... if you're an oil producer.
ReplyDeleteChris cook has his own theory and more and more are starting to believe him
ReplyDeleteHis thesis is that Fed dollars have recently been re-engineered Enron-style to be claims pegged to oil flows #OilStandard However, the vast bulk of US bank-created $ are based on $10 trillion capitalised US land use/rental value
China are selling treasuries to get the $'s to buy and then store oil at a cheaper price and then sell that oil at a higher price after the American's use this new peg they introduced under Trump to push the price of oil higher.
Based on his reading of a US $ peg to oil at $50 to $60/bbl and a Chinese cap around $45/bbl he think oil market power has passed downstream to the guy side due to China now having huge storage capacity.
All explained it great detail
Here The history from Nixon To Trump And how Gary Cohen and Red Tillerson pegged oil to the $.
https://www.lowimpact.org/chris-cook-oil-markets-from-nixon-to-trump/
And here what it means now
https://en.mehrnews.com/amp/159576/
His Twitter feed is well worth a watch...
Chris designed and built the Iranian Oil Bourse and set up and regulated the oil market in the UK
Both of the articles are fascinating reads.
ReplyDeleteThat is how he has saw it for a while now.
this is a financially driven price recovery. reckon China will cash in bargain basement floating oil stock once they've drawn in the suckers
China has taken advantage of this market discontinuity to fill strategic reserves now over 1.2 billion barrels, and a stream of literally hundreds of oil tankers is currently delivering to China oil bought at distressed prices which will be available for immediate re-sale.
Whereas the US and other producers prefer a market price at the inflated $50/$60 per barrel level, clearly China, India, Japan, and above all the EU who are all major consumers would prefer a price pegged between maybe $30 to $40/bbl since the difference between the two price bands represents a net transfer from consumers to producers approaching $1 trillion per year, and that is before the additional costs of refining crude oil to fuel in turn distributed and sold to consumers as energy services such as heat/cooling, power, mobility and so on.
China has been building HUGE storage capacity using MMT to put the power in the hands of the buyers club...
Good stuff, Footsoldier.
ReplyDeleteHere is one by Andrei Martyanov from today on Russia and SA.
http://smoothiex12.blogspot.com/2020/06/no-shit-i-dont-remember-which-one.html