Inflation

[waterbottle]

I am lost.if China reopens, oil consumption will increase even more.
The lockdown is not affecting production of oil, and hardly refining.
What we have is the West deciding to boycott itself from a key producer: Russia blacklist
and the end result of now nearly a decade of pretending that fossil fuels are not required so no investment, exploration, licensing..
None related to Shanghai..
Oil issue will remain, and not so sure the inflation is really that linked to China covid at least here.
Food price explosion is oil/fertiliser based..
Transport is oil/ self inflicted regulation..and car part issues is the chip shortage..which after 2y, is clearly more an economic weapon from China than an actual production problem .but hey...who wants to open his her eyes...

China will increase demand on oil over they return to regular manufacturing.

 

[divs4ever]

Chinese oil demand may rise , but who will sell that extra oil , chances are Russia , Iran and Saudi Arabia ( AND in yuan )

 

[3 hound]

I am lost.if China reopens, oil consumption will increase even more.
The lockdown is not affecting production of oil, and hardly refining.
What we have is the West deciding to boycott itself from a key producer: Russia blacklist
and the end result of now nearly a decade of pretending that fossil fuels are not required so no investment, exploration, licensing..
None related to Shanghai..
Oil issue will remain, and not so sure the inflation is really that linked to China covid at least here.
Food price explosion is oil/fertiliser based..
Transport is oil/ self inflicted regulation..and car part issues is the chip shortage..which after 2y, is clearly more an economic weapon from China than an actual production problem .but hey...who wants to open his her eyes...

It's really lazy and dishonest at the highest level for gov to shift the blame on Putin and Chinese lock downs for supply issues and inflation yet people repeat it like it's a fact of nature. US policy makers are now proposing price fixing as if somehow corporations are causing inflation by price gouging. Gov setting the price of goods while there are already shortages of those goods - what could go wrong.

 

[3 hound]

the chip shortage..which after 2y, is clearly more an economic weapon from China than an actual production problem .

I have seen reports that China has been hoarding and stockpiling food for years.
Soldiers are farmers in Ukraine and the window for getting crops in the ground is closing in Ukraine, US and other countries due to fighting, diesel prices or fertiliser prices.

You can quote me on this, China will use its vast food stockpile as an economic weapon of mass leverage over other countries.

 

[over9k]

It's really lazy and dishonest at the highest level for gov to shift the blame on Putin and Chinese lock downs for supply issues and inflation yet people repeat it like it's a fact of nature.

It is dude. How much of the world's oil and wheat do you think has been cut off in the sanctions/war?

 

[over9k]

Meanwhile, with china announcing a lift to the lockdowns, we see NDX futures the highest and another screaming night for energy:



So we should see energy demand increase and supply of other stuff (aka inflation) improve a bit.

 

[Value Collector]

There were supply issues before the Chinese lock downs AND the war in Ukraine, does anyone even know anymore what is causing the supply problems.

Obviously the Chinese lockdowns and the Ukraine war has added a lot of fuel to the fire, but the supply issue before that were mainly caused by other covid restrictions and isolations.

For example rules that people must isolate if they are a close contact were shutting downs and delaying factory output and transport.

 

[over9k]

Also looking like a pretty big break above trend again:



So I've trimmed a bit more today. All eyes on the next entry point, maybe around the 480 mark.

 

[divs4ever]

Obviously the Chinese lockdowns and the Ukraine war has added a lot of fuel to the fire, but the supply issue before that were mainly caused by other covid restrictions and isolations.

For example rules that people must isolate if they are a close contact were shutting downs and delaying factory output and transport.

i would suggest some troubles were actually brewing before Covid as well , the truck-driver decline in several nations , for one , another was changes to the permissible shipping fuel , not helping shipping bottle-necks at all , and Boeing was also facing several problems ( putting pressure on air transport )

 

[qldfrog]

China will increase demand on oil over they return to regular manufacturing.

Yes so me being puzzled by your post.
I took:"Might bring price of oil back to what $120 but will also address supply issues of the EU oil fails then we could be looking at 2 of the major inflationary forces being thwarted."
As saying oil fails aka oil falls
You maybe meant oil back UP at 120?..
But that is not deflationary...
Anyway i think we agree
China unlocks
so oil goes up
so inflation worsening.

 

[3 hound]

It is dude. How much of the world's oil and wheat do you think has been cut off in the sanctions/war?

Supply chain issues and (transitory) inflation preceded Ukraine and sanctions.

 

[over9k]

Supply chain issues and (transitory) inflation preceded Ukraine and sanctions.

Sure but take a look at the rate of increase before vs after the invasion.

 

[over9k]

Meanwhile:

 

[waterbottle]

There were supply issues before the Chinese lock downs AND the war in Ukraine, does anyone even know anymore what is causing the supply problems.

I don't think anyone knows. Probably a number of factors causing some constraints

Yes so me being puzzled by your post.
I took:"Might bring price of oil back to what $120 but will also address supply issues of the EU oil fails then we could be looking at 2 of the major inflationary forces being thwarted."
As saying oil fails aka oil falls
You maybe meant oil back UP at 120?..
But that is not deflationary...
Anyway i think we agree
China unlocks
so oil goes up
so inflation worsening.

Ah sorry! I meant if he EU oil ban fails, then we will be looking at a situation with less inflation. I think oil prices are being by the expectation that a Russian oil ban will occur

 

[over9k]

Can we please give this a rest?

 

[3 hound]

View attachment 141811

Can we please give this a rest?

I appreciate you posting current graphs but would appreciate the benefit of some narrative to go with them. Not everyone here studies this stuff.

 

[over9k]

I appreciate you posting current graphs but would appreciate the benefit of some narrative to go with them. Not everyone here studies this stuff.

Energy took off back at the start of the year when the invasion fears began. Not a coincidence. That's not to say it wasn't increasing at a decent rate beforehand, but it was the invasion and sanctions that sent it soaring.

Here's the trend difference to get an idea:



You can do the same with the WTI & brent crude prices if you like but you get the idea.

 

[Value Collector]

.

Supply chain issues and (transitory) inflation preceded Ukraine and sanctions.

This video explains it all in detail, it was caused by a perfect storm of lock downs, followed by isolations of chunks of the workforce, and the “just in time” supply chain design couldn’t handle it.

 

[Stockbailx]

Heard on the grape vine wages could Increase by 2.5% due to interest rate rise. Real wage growth—or the difference between wage growth and inflation—would be independent of inflation. Productivity?
Sited this vidio suggesting wages to lag behind inflation;

https://www.news.com.au/finance/new-wage-growth-figures-expected-to-lag-behind-inflation-rate/video/7ae7da8c8a1993bb88f846555c3e8aa2

 

[3 hound]

suggesting wages to lag behind inflation;

Isn't that just basic economics?