Maybe the chances of oil prices dropping are not so good after all. Optimists hoped that higher prices would cut the demand for crude in emerging markets like India and China. But, if wishes were horses, all the beggars would ride.
China's imports of oil rose nearly 13% in the first five months of the year. According to MarketWatch, "China's imports of crude oil in the January through May period totaled 75.97 million metric tons (659.8 million barrels)." China is about to cut the extent to which it underwrites the price of gas and diesel, and that may help the level of consumption going forward.
The news confirms some oil expert's worst fears. Countries like China are willing to bring in as much crude as is needed to help their economies grow faster than those in the US and EU. The rising need for inexpensive exports out of China means that the country must have oil to produce and transport them.
China's talk about conserving energy is lip service.
Douglas A. McIntyre is an editor of 247wallst.com.
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Reader Comments (Page 1 of 1)
6-11-2008 @ 6:41AM
al coholic said...
From your post...
"China's talk about conserving energy is lip service."
Unfortunately, the same arguement could be made about America over the last 35 years. Like children who must first burn their hand on the stove before they believe it is hot, it seems humans just cannot learn from others mistakes.
6-11-2008 @ 8:43AM
John said...
China's per capita gasoline usage is far less than ours. As is India's.
For every American who reduces mileage by 100 miles per week, a group of 1000 people from countries like China and India, in aggregate, drives 100 more miles. The same amount of gasoline gets burned.
Barrel prices may go down temporarily, but this fact will forever be with us. There is no way to have a positive GDP without aggressively escalating oil prices. America's only defense is an aggressive conservation program that remains permanently in place. In other words, all Jimmy Carter all the time for all time. It's time to start creating Jimmy Carter jobs. They dovetail nicely with fighting global warming. This country should be aggressively increasing its investments in wind power, solar power, nuclear power, hydroelectric power, and the power grid. It will take all of them to convert to electric cars and trucks.
It means higher taxes. Sorry John McCain and the morons who support you, we're in the real war: the one for the planet. It is going to take some serious spending. Check the tax rates in WW2. Look at how many ships and vehicles we built. That is the scope of the necessary effort. It's simply gigantic - bigger than anything ever done by any country in history.
6-11-2008 @ 9:11AM
speculator said...
Matt Simmons has been right on about the oil market. He thinks we are going to have shortages and that oil is cheap right now.
http://theinvestingspeculator.typepad.com/investing/2008/06/oil-is-cheap.html