China and Oil Stocks
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Transcript of China and Oil Stocks
China and Oil StocksBy www.ProfitableTradingTips.com
http://profitabletradingtips.com/profitable-trading-tips/china-and-oil-stocks
The Chinese stock market meltdown is having far ranging effects outside of China.
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Reuters reports how stocks and oil fell in price on worries about China as well as the Greek debt crisis.
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http://profitabletradingtips.com/profitable-trading-tips/china-and-oil-stocks
equity markets around the world fell on monday and u.s. oil prices tumbled 6 percent after greece overwhelmingly voted against conditions for a rescue package and on unprecedented measures in china to staunch massive recent losses in its stock markets.
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beijing introduced unexpected measures over the weekend to staunch a recent 30-percent rout in its stock market since mid-june
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which had raised investors’ concerns about the stability of the world’s second-biggest economy.
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Crude oil sold for $100 to $120 a barrel from 2011 until the middle of 2014.
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Today it sells for around $60 a barrel. This is because of decreased demand on one hand and oversupply on the other.
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The US oil fracking boom has hugely reduced US oil imports and OPEC is not backing off on production.
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On the demand side Chinese oil consumption was less than 5 million barrels a day until 2002.
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Today China consumes 10 million barrels a day compared to the USA at 20 million barrels a day.
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But consumption in China is peaking and will likely fall.
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Reduced Chinese Oil Consumption
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loomberg business cites projections by China Petroleum & Chemical Corporation.
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China’s fuel demand is going to peak and fall.
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china’s biggest oil refiner is signaling the nation is headed to its peak in diesel and gasoline consumption far sooner than most western energy companies and analysts are forecasting.
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if correct, the projections by china petroleum & chemical corp., or sinopec, a state-controlled enterprise with public shareholders in hong kong, pose a big challenge to the world’s largest oil companies.
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they’re counting on demand from china and other developing countries to keep their businesses growing as energy consumption falls in more advanced economies.
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sinopec has offered a view of the country that should serve as a reality check to any oil bull.
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for diesel, the fuel that most closely tracks economic growth, the peak in china’s demand is just two years away, in 2017.
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And these projections were made before the Shanghai stock market went into free fall a month ago.
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A damaged Chinese economy will use less oil and prices may well fall even farther unless producers rein in production.
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End of the Chinese Economic Miracle?
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business insider looks at China’s economic problems and decides that everyone who does business with China will feel the effects.
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china’s economic slowdown isn’t just bad for china.
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it’s bad for everyone who trades with china.
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gdp growth has slowed from 10.4% annually in 2011 to 7.4% last year.
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according to the world bank, this number should continue to slide, going below 7% by 2017.
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joseph p. quinlan, a strategist for us trust, wrote about the importance of chinese importing.
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“import demand in china has been simply staggering since 2000, with imports rising nearly nine-fold between 2000 and 2014, helping to boost demand and real growth in southeast asia, africa, south america, and the middle east, among other places,” quinlan said.
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china has been gobbling up commodities in its drive to develop its economy over the past two decades, and it has become the key trade partner for a diverse group of nations.
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The relationships go beyond China and oil stocks.
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From Africa to Latin America to Australia raw material producers will be hurt as China cuts back on imports.
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Suppliers of high end manufacturing equipment from countries like Germany and Japan will also be hurt as the Chinese economy slows.
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If the stock market in China goes from bad to worse, and takes the real estate market with it, the bad results will be multiplied.