{"id":34947,"date":"2018-06-09T06:55:07","date_gmt":"2018-06-09T11:55:07","guid":{"rendered":"http:\/\/olduvai.ca\/?p=34947"},"modified":"2018-06-09T06:55:07","modified_gmt":"2018-06-09T11:55:07","slug":"its-the-demand-stupid-is-china-about-to-burst-the-black-gold-bubble","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=34947","title":{"rendered":"It’s The Demand, Stupid! Is China About To Burst The Black Gold Bubble?"},"content":{"rendered":"
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It’s The Demand, Stupid! Is China About To Burst The Black Gold Bubble?<\/span><\/a><\/h3>\n<\/div>\n
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For months we have heard about how the oil market’s over-supply <\/strong><\/u>‘glut’ has been removed thanks to OPEC\/NOPEC’s production cut deal and the narrative of ‘global synchronous recovery’ has buoyed the demand <\/strong><\/u>side of the equation – sending crude prices to four year highs (helped considerably by an increasing geopolitical risk premium, that is now evident more in Brent than WTI<\/em><\/strong>).<\/p>\n

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However, the last couple of weeks have turned ugly <\/strong>for the ‘no brainer’ record spec longs in crude oil as prices have tumbled (and President Trump has complained)..<\/p>\n

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The 50% surge in crude prices – and concurrent rise in gas prices at the pump – has begun to worry some that demand destruction looms. However, as The Wall Street Journal’s Nathaniel Taplin reports<\/a>, what investors may not appreciate is that demand growth is also poised to slow in the world\u2019s largest net oil importer last year, China<\/strong>.<\/p>\n

Chinese petroleum demand still appears fine. Growth bounced back to a healthy 9% on the year in April, twice the rate in March. April\u2019s petroleum burn was flattered, however, by exceptionally weak demand in the same month the year before<\/strong> – and probably by the official end of the government\u2019s winter pollution controls, which had given a\u00a0temporary shot in the arm<\/a>\u00a0to Chinese industry this spring<\/strong>.<\/p>\n

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Unfortunately the overall trend for the industrial and transport sectors – which together account for about 70% of Chinese oil demand – looks shaky.<\/strong><\/p>\n

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Growth rates in freight traffic and electricity production both peaked in the third quarter of 2017<\/strong>, excluding January and February figures distorted by the Lunar New Year holiday.<\/p>\n

Freight tonnage growth is now running at barely half the 11%-12% rate it reached in mid-2017.<\/p>\n

Weakening global trade<\/a>, driven partly by the slowdown in Europe, will put further downward pressure on those numbers.<\/strong><\/p>\n

…click on the above link to read the rest of the article…<\/p>\n<\/div>\n<\/div>\n<\/article>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

It’s The Demand, Stupid! Is China About To Burst The Black Gold Bubble? For months we have heard about how the oil market’s over-supply ‘glut’ has been removed thanks to OPEC\/NOPEC’s production cut deal and the narrative of ‘global synchronous recovery’ has buoyed the demand side of the equation – sending crude prices to four […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[3],"tags":[130,588,589,592,595,596,600,4318],"class_list":["post-34947","post","type-post","status-publish","format-standard","hentry","category-energy-2","tag-china","tag-oil","tag-oil-demand","tag-oil-price","tag-oil-production","tag-oil-supply","tag-opec","tag-zerohedge"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/34947","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=34947"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/34947\/revisions"}],"predecessor-version":[{"id":34948,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/34947\/revisions\/34948"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=34947"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=34947"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=34947"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}