China is very thirsty for oil. In January, they imported the most crude oil in their history. Their economy is slowing, so it appears that they are using this imported oil to build the world’s largest stockpile. Do they know something about this year and oil prices that we don’t? (hint – the price is likely to sky rocket…)
We’re on the edge of another recession, so how can prices be so high? We import 2/3s of all the oil we use, and we are buy that oil on the world market. The world market is much more expensive than our domestic market. As China buys more than it needs, the price rises. We pay the cost at the pump.
Meanwhile, the US media is blowing the “energy independence” trumpet loudly. Why we have all the oil we need right here! And we use less every year! (thanks to the end of economic growth). Yet, cognitive dissonance will set in as gas tops $4 a gallon. Obama will do everything he can to avoid a spike. We’re in for an interesting year.
From Zero Hedge
Say what you will about the tenets of Chinese economic slowdown assumptions and what not (despite inflation obviously continuing to be a rather pesky issue), at least its steadfast determination to have the world’s largest crude oil stockpile is an ethos. At 23.4k metric tons of imports in January, China just imported the most crude in its history, despite the traditionally slow period around the Chinese new year. The trendline is unmissable – at this rate China will become the world’s largest importer of Crude in a few short years, surpassing the US easily with its 28K metric tons of imports in a couple of years. Oh, and anyone who thinks that China will volunteer to lose Iran as a primary source of crude imports as its oil is “liberated” by Western powers as the country is obviously en route to having the world’s largest crude stockpile (as to why this may be the case, read here), we have a bridge to Isfahan to sell you.