Inflation

[over9k]

there are still a few 'Russia-friendly ' stans up there , and i reckon China can cut a deal with Afghanistan as well , add in under-explored Mongolia as 'future producers ' , and the Chinese stockpiles ( they reputedly have ) and i reckon they can just about do it especially if the West applies sanctions on Chinese exports ( would the West do that again ?? )

also China learned a trick or two on recycling

it won't 'a time of abundance ' but they only have to out-last the West and get a clear path to partnering half of Africa

currently i would rather be playing China than the EU in the new world monopoly game

China imports almost all of its critical supplies (energy, food etc). You can't build an oil pipeline in five minutes and tankers have to go through several massive chokepoints.

China's oil supply could be cut off to the point of crippling it within a few hours.

 

[divs4ever]

China imports almost all of its critical supplies (energy, food etc). You can't build an oil pipeline in five minutes and tankers have to go through several massive chokepoints.

China's oil supply could be cut off to the point of crippling it within a few hours.

since China is already building a railway to ( Western ) Russia ( originally it was meant to go to Europe as well ) you can bet there is at least one pipeline going from Siberia to China in progress , i believe a pipeline to India is also in the planning stage ( or more progressed )

don't forget China is already quietly importing oil from Iran ( which will be undoubtedly outside the US Dollar system )

i am betting China has a contingency plan , and i bet China has been working on that plan since Trump started the tariff war ( maybe even earlier )

China will not have forgotten the lessons learned during the Bamboo Curtain Days ( since it has had fundamentally the same government structure all that time )

ALSO North Korea has a fair bit of coal that China has been resisting the importation of , so it appeared to be a willing player in global initiatives

BTW how is China's relationship with Bangladesh , most years Bangladesh has some surplus rice to sell

 

[mullokintyre]

China imports almost all of its critical supplies (energy, food etc). You can't build an oil pipeline in five minutes and tankers have to go through several massive chokepoints.

China's oil supply could be cut off to the point of crippling it within a few hours.

According to Financial Tiimes via Zerohedge

In an effort to dull the effect of international restrictions on its oil sales, Russia has discretely assembled a "shadow fleet" of more than 100 tankers, according to shipping brokers and industry analysts who spoke to the Financial Times.

The largely anonymous tanker purchases can be tracked by the big increase in unnamed or new buyers appearing in registries. The vessels are generally 12-15 years old and would be expected to be scrapped in the next few years, said Anoop Singh, head of tanker research at Braemar. -- Financial Times
“We’ve seen quite a number of sales to unnamed buyers in recent months, and a few weeks after the sale many of these tankers pop up in Russia to take their first load of crude,” Craig Kennedy at Harvard's Davis Center for Russian and Eurasian Studies told the Times.
With its growing fleet of aging, bargain-bin tankers, Russia is looking to bolster its exports to China, India, Turkey and other countries that have greatly boosted their purchases of Russian oil as other countries reduce them.
According to Braemar's analysis, Russian operators appear to have acquired:

• 29 very large crude carriers (VLCCs), which can haul more than 2 million barrels apiece
• 31 Suezmax-sized tankers, which carry about 1 million barrels
• 49 Aframax tankers, with 700,000-barrel capacities

Russia's tanker-buying spree probably isn't over. “Russia needs more than 240 tankers to keep its current exports flowing,” Rystad analyst Viktor Kurilov told the Times.

So I wonder if the US will try to embargo Russian Tankers from travelling the high seas.
Would not put it past the US hawks .
Mick

 

[over9k]

According to Financial Tiimes via Zerohedge

So I wonder if the US will try to embargo Russian Tankers from travelling the high seas.
Would not put it past the US hawks .
Mick

Doesn't have to be the yanks:



There's only three places oil can flow through/past indonesia and each of them is all of about 2km wide at the depth necessary for a big tanker to sail through. Indonesia could block them, so could korea, so could japan, so could india.

China is totally dependent on these three narrow straits and so, in fact, is most of asia. The only alternative is stuff coming by train from russia etc (not even close to what they need) or across the pacific from america (not really interested in relying on the yanks are they?).

A big, and I mean BIG oil pipeline from russia is the only way they could even think about energy security and they don't have and cannot build one of those in under a multi-year timeline.

Let's also not forget that russian oil, if moving by sea, has to be loaded in the black sea, make its way past turkey (another big choke point) and then through the suez canal (another big choke point).

 

[divs4ever]

Doesn't have to be the yanks:

View attachment 150081

There's only three places oil can flow through/past indonesia and each of them is all of about 2km wide at the depth necessary for a big tanker to sail through. Indonesia could block them, so could korea, so could japan, so could india.

China is totally dependent on these three narrow straits and so, in fact, is most of asia. The only alternative is stuff coming by train from russia etc (not even close to what they need) or across the pacific from america (not really interested in relying on the yanks are they?).

A big, and I mean BIG oil pipeline from russia is the only way they could even think about energy security and they don't have and cannot build one of those in under a multi-year timeline.

Let's also not forget that russian oil, if moving by sea, has to be loaded in the black sea, make its way past turkey (another big choke point) and then through the suez canal (another big choke point).

Russia also has this little port called Vladivostok , AND has been recently testing out the 'Arctic route ' for freight ( probably won't be useful all-year round , but even 6 months would be useful , they might have to build in 'icebreaker capability ' but Russian builds crude and robust , habitually, it shouldn't be a biggie in new vessels

it is also possible that investment starved Chinese cash might find Russian pipelines attractive

 

[over9k]

https://www.spglobal.com/commodityinsights/en/ci/research-analysis/espo-crude-oil-pipeline.html

"In summary, we believe that the ESPO pipeline is a critical route for Russian oil to reach its key consumer, mainland China. However, this pipeline seems to be at its capacity even before the Russia-Ukraine crisis, and it is unlikely for Russia to be able to increase its existing supplies to mainland China via this route. The other pipeline, the Atasu-Alashankou Pipeline, has limited spare capacity. The insufficiency in oil transmission capacity will force Russian barrels to take sea routes to mainland China if Russian ships continue to be diverted from countries that have imposed self-sanctions on Russian crudes. Chinese demand for seaborne Russian crude—particularly the ESPO blend and Urals—will remain stable because these are the preferred grades run by most of the independent/large refineries that are owned and operated by national oil companies".

 

[divs4ever]

but this year there is increased incentive to build extra pipelines , but maybe not all into China , i could see a wisdom of building a pipeline into Afghanistan and on to Pakistan ( opening a future transit lane into India with later pipelines )

although Russia might also choose to fund a pipeline from Iran into Afghanistan and then onto Pakistan and India and just reap some fees and influence

bigger is not always better , smaller and faster is sometimes a better solution with new customers ( and build bigger later when the trade relationship is solid )

 

[over9k]

Sure but how long do you think a pipeline takes to build? Not five minutes that's what.

And that's before we even start on the supply side problems from russia.

 

[divs4ever]

Sure but how long do you think a pipeline takes to build? Not five minutes that's what.

And that's before we even start on the supply side problems from russia.

but they have plenty of resources available now , assuming they have abandoned Europe ( with a few exceptions ) as reliable customers

the major question is .. can Russia and China manage an alternate technology to avoid using European designed/made gear ( like compressor turbines and Siemens electronics )

besides Europe has plenty of problems coming , not the least potential Russian export bans and switching away from G7 suppliers of most goods and services ( something that may really benefit India )

 

[over9k]

Oh europe's boned too but that's a different discussion.

 

[over9k]

Index futures all ~0.5% into the red with all the energy etf's +3% or more premarket lads. Brent itself is +2.6%. Looking like another winner tonight.

 

[over9k]

 

[waterbottle]

Oil down at the moment. Might just have to sit on hands and wait out volatility?

 

[over9k]

Oil down at the moment. Might just have to sit on hands and wait out volatility?

Or flog at the open just like any other day it's mental premarket

 

[waterbottle]

Oil continuing its downward march, along with the rest of the market. Russia considering an oil price floor but doesn't sound like it'd be very effective.

 

[mullokintyre]

OZ GDP was slightly below expectations, coming in at 0.6 for the September quarter.
From ABC News

Australia's economic growth has come in slightly below expectations, with GDP growing by 0.6 per cent in the September quarter and 5.9 per cent through the year.

The result was Australia's fourth consecutive quarter of economic growth following a contraction during the COVID-19 Delta wave lockdowns last year, but growth decelerated from 0.9 per cent the quarter before.

Economists were also generally expecting a slightly stronger reading of 0.7 per cent.

Not many countries will have had four quarters of growth over the past two years, so we are doing all right.

Consumer spending was a key driver of the economic growth, as life returned to more normal patterns after two years of significant pandemic disruption.

Consumers are are still out there driving things along.
One can only assume that business must have curtailed a fair bit, as there has been no slacking off in Government Spending.

Household spending rose 1.1 per cent for the quarter, contributing 0.6 percentage points to GDP, according to the Australian Bureau of Statistics (ABS).

The national accounts data showed growth was driven by a 5.5 per cent jump in spending at hotels, cafes and restaurants, a 13.9 per cent rise for transport services and a 10.1 per cent increase in the purchase of vehicles.

One wonders how much of the increases in household spending, as well as the 13.9 percent rise in Transport services are due to inflatoion rather than a real increase in spending.
Time will tell.
Mick

 

[farmerge]

Oil down at the moment. Might just have to sit on hands and wait out volatility?

Noticed a big drop in the price of unleaded, $1.70, at the couple of servos we have but the more important diesel for us is still at over $2 a litre

 

[sptrawler]

It doesn't sound like interest rates will be coming down any time soon.

Economy powers on but ‘bigger challenges to come’​

Jim Chalmers warns of ‘bigger challenges to come’ for the nation, as Aussies continue to spend despite rising inflation, helping drive a solid quarter of economic growth.

New cars and hospitality spending contribute to economy growth​

The economy expanded by 0.6 per cent in the three months to the end of September as households spent up on new cars and trips to local cafes while reducing their COVID-savings.

 

[over9k]

Same tug-of-war we've seen for months. Nothing new. Still playing the volatility. Obviously bet the other way once the narrative changes back to "oh gee demand is higher than we thought" or "oh gee the supply issues are worse than we thought".

 

[over9k]

Peter Zeihan's latest take.