Joined: Apr 09, 2007 Posts: 5883 Location: Alaska (its much bigger than Texas).
Posted: Thu Jun 19, 2008 11:07 pm Post subject: Re: China raises fuel prices by 18%
China obviously timed their announcement to occur just before the Saudi oil summit this weekend. By announcing the 18% price rise, China dodges blame for its ever growing demand for more oil
Posted: Thu Jun 19, 2008 11:54 pm Post subject: Re: China raises fuel prices by 18%
Yes, yes the power and the glory. He who controls the lead based paint controls the world.
Listen if supply keeps on the plateau or increases a little yes we coul dsee a major price correction. However (cough), there is another shoe to drop and when it does the sound of it hitting the floor will spell the end of any dreams of growth for the United States. If that shoe drops this year, whether by out and out admission or by inference in the market place demand destruction will not help prices, because everyone will be getting the oil now, right now.
So I hope you all are right, we could use a little break to get our bearings, and hopefully we would use the time wisely. But the wolf is still at the door and asking China (our dysfunctional Siamese twin) to pay more for gas is not going to solve the problem anymore than Secretary Snow asking them to save less helped our currency.
What I have to point out is how many people here are secretly not doomers at all. Just when things tarted to get tight so that it appeared peak oil might actually happen every little price pull back is a sigh of relief.
There is no escape for western civilization from peak oil. The crash course in alternatives needed to start 20 years ago, but it definitely has to start today.
Without it every hope of relief is going to be short lived.
Posted: Fri Jun 20, 2008 2:27 am Post subject: Re: China raises fuel prices by 18%
Quote:
I'm actually quite the opposite opinion. I believe that after the Olympics, china will pull off their smiling face mask and show the world what they really thing about the US's financial, international, and military policies.
Just remember the Chinese government has a responsibility to take care of 1.3 Billion people. If a few hundred million Americans get hurt in the process, well that's just the way it goes.
I completely do not understand why people do not see this obvious next step in China's plans. And we in the USA have sold ourselves out of any options in exchange for quick money.
Their sense of future history is well reflected in making the 2008 Olympics the marker of their new leadership in world economics.
Joined: Dec 07, 2005 Posts: 1852 Location: Australia
Posted: Fri Jun 20, 2008 3:54 am Post subject: Re: China raises fuel prices by 18%
All China needs to do to bring down oil/petrol prices (in Yuan) is to UP the currency against US$.
They can then import energy and materials much cheaper than they do today.
Why would the Chinese government let the economy burn (in case of US recession) when that is all it takes and voila, they have instead transformed the country to a consumer society.
I wouldn't be surprised if they try to help cause some turmoil in global markets first though (bit like the "rouge trader" event in the copper market) so they can get buy up some companies at good discount. After all, the 1.5Trillion US$ worth of cash they are sitting on is not going to be worth much, so it is a matter of taking opportunities to convert it to assets. _________________ Lets take a ride, and run with the dogs tonight
In suburbia
You cant hide, run with the dogs tonight
In suburbia
- Pet Shop Boys
Posted: Fri Jun 20, 2008 6:12 am Post subject: Re: China raises fuel prices by 18%
Since June of 2005, before all of the hurricanes hit, the price of unleaded gas in the US has gone from 2.17 to about $4.00 per gallon, an 87% increase.
The US unleaded gas consumption has gone from 9.372 mbpd to 9.311 mbpd, a 0.5% decrease.
Since the chinese are equally hard headed about driving as americans, even more, perhaps, this so-called reduction in subsidy will have no measureable effect on consumption, and will only serve to allow the government to bring in more money, with which they can go into the marketplace and bid for more supplies.
Joined: Sep 16, 2004 Posts: 4443 Location: Southwest WI
Posted: Fri Jun 20, 2008 6:17 am Post subject: Re: China raises fuel prices by 18%
You can't argue those numbers.
The stuff is more addicting then crack.
In the end it will come to rationing... _________________ "Oil is going up because we use too much oil, and the capacity to replace reserves is dwindling"
-President Bush 11/07/07
Joined: Oct 25, 2004 Posts: 1331 Location: Stalag 13
Posted: Fri Jun 20, 2008 6:49 am Post subject: Re: China raises fuel prices by 18%
*ahem*
China fuel price hike may not sap demand
Quote:
The jump in China's state-controlled fuel prices will inevitably squeeze consumers at both filling stations and grocery stores. But analysts say the hike is unlikely to make an immediate or huge dent in the country's hunger for oil.
China's economy is booming, and people are buying cars and air conditioners as their incomes grow. There is huge pent up consumer demand in a country of 1.3 bilion where per capita energy consumption is still far below wealthier countries.
Also, the price hike of up to 18 percent is likely to prompt refiners to boost production of crude oil, gasoline and other refined products. Previously, they had held back because they were losing money on the wide gap between global crude oil prices and state-set retail prices, which had created widespread fuel shortages.
"Do not expect an immediate fall in China's oil imports — the price effect on demand will work in China as well, but it will take some time to work through," Wang Tao, an economist for UBS Securities, said in a report issued Friday.
link _________________ Now why didn't I think of that?
Posted: Fri Jun 20, 2008 9:04 am Post subject: Re: China raises fuel prices by 18%
pup55 wrote:
Since June of 2005, before all of the hurricanes hit, the price of unleaded gas in the US has gone from 2.17 to about $4.00 per gallon, an 87% increase.
The US unleaded gas consumption has gone from 9.372 mbpd to 9.311 mbpd, a 0.5% decrease.
Since the chinese are equally hard headed about driving as americans, even more, perhaps, this so-called reduction in subsidy will have no measureable effect on consumption, and will only serve to allow the government to bring in more money, with which they can go into the marketplace and bid for more supplies.
The analysts will pick up on this in a few days.
It isn't just a .5% decrease, at least not wrt consumption. Prior to 2005, oil consumption increased ~1-3%/year, but over the last few years it's been declining as you've illustrated. When looking at demand, which is what analysts look at AFAIK, that isn't a .5% decrease, it's closer to a 5% decrease. There is also a significant difference between the short term and long term elasticity of oil so expect reductions in consumption to continue as the long term elasticity becomes a greater part of the picture provided oil prices stay high of course. _________________
Posted: Fri Jun 20, 2008 1:16 pm Post subject: Re: China raises fuel prices by 18%
The price increase might lead to a decrease in demand but at the same time it may also lead to increased availability of petrol etc. to the general Chinese populance as chinese oil companies stop restricting imports/supplies so much as they will no longer be making such massive losses on sales. Let's not forget that the Chinese middle class is projected to double by 2010 and they won't want to peddle bicycles anymore. It will be interesting to see what happens.
Posted: Fri Jun 20, 2008 1:22 pm Post subject: Re: China to raise fuel prices
joeltrout wrote:
Demand Destruction here we come.....
Within 6 months after the Olympics I believe we will see $80 oil.
Mark your calendars my friends.
joeltrout
apparently not
Quote:
Oil prices have rebounded as investors begin to consider that a fuel price rise in China may actually increase demand there.
Some analysts have said that fuel subsidies in China have helped to increase demand, and an increase in retail prices could dampen energy consumption.
A view that sparked Thursday's sell-off.
But an increasing number of analysts believe the effect could be the opposite, as refiners will be encouraged to increase production to take advantage of the better prices.
This would lead to improved fuel supply at the pumps, which would help to meet pent-up demand.
Posted: Fri Jun 20, 2008 1:33 pm Post subject: Re: China to raise fuel prices
KevO wrote:
joeltrout wrote:
Demand Destruction here we come.....
Within 6 months after the Olympics I believe we will see $80 oil.
Mark your calendars my friends.
joeltrout
apparently not
Quote:
Oil prices have rebounded as investors begin to consider that a fuel price rise in China may actually increase demand there.
Some analysts have said that fuel subsidies in China have helped to increase demand, and an increase in retail prices could dampen energy consumption.
A view that sparked Thursday's sell-off.
But an increasing number of analysts believe the effect could be the opposite, as refiners will be encouraged to increase production to take advantage of the better prices.
This would lead to improved fuel supply at the pumps, which would help to meet pent-up demand.
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