And The Biggest Winner From The OPEC Price War Is...

Tyler Durden's picture

"This is a golden time window to acquire more strategic oil at lower costs," notes one Hong-Kong based analyst, as Bloomberg confirms what we have noted here and here, that China is emerging as the winner from OPEC’s battle with rival oil producers as the world’s biggest energy consumer stockpiles crude.

84 tankers remain en route to Chinese destinations...

 

As Bloomberg reports,

The dwindling number of investors still betting on a rebound in prices can at least count on Chinese demand. OPEC decided to maintain output targets even as a shale boom boosts U.S. production to the highest in more than three decades and causes a global supply glut. As crude extends its slump to the lowest level in more than four years, China is seeking to build a strategic petroleum reserve.

 

“This is a golden time window to acquire more strategic oil stockpiles at lower costs,” Gordon Kwan, the Hong Kong-based head of regional oil and gas research at Nomura Holdings Inc., wrote in an e-mail Nov. 28. China will be “a big beneficiary” from the OPEC decision, he said.

 

...

 

The nation’s efforts to boost reserves may increase its imports by as much as 700,000 barrels a day in 2015, according to London-based Energy Aspects Ltd. That’s more than half the global glut forecast by Citigroup Inc. after the Organization of Petroleum Exporting Countries refrained from cutting output at its meeting last week.

 

...

 

China boosted imports by 8.3 percent, or 460,000 barrels a day, in the first nine months of this year, the fastest pace since 2010, customs data show. The country will overtake the U.S. as the world’s biggest oil consumer within two decades, according to the International Energy Agency in Paris.

 

...

 

While China currently holds reserves equivalent to about 30 days of imports, the government is seeking to boost that level to 100 days by 2020, according to China Petrochemical Corp., Asia’s biggest refiner. That would be the equivalent of about 570 million barrels, based on the most recent monthly imports.

 

“We know that China has already been taking advantage of lower prices to fill the SPR,” Simon Powell, the head of Asian oil and gas research at CLSA Ltd. in Hong Kong, wrote in an e-mail Nov. 28. “They still have a long way to go.”

 

The world’s second-biggest economy consumed the largest volume of oil on record in October, according to data compiled by Bloomberg.

*  *  *

As we concluded previously, just like Chinese gold imports rise when the price of gold drops; so China does the logical thing with other commodities, (i.e. oil) when prices tumble and instead of selling into the paper rout, it buys all the physical it can get its hands on.

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Publicus's picture

The Chinese and the Russians are preparing for the inevitable World War 3.

A Lunatic's picture

A 100 day oil reserve should be good enough then.....

Publicus's picture

It will last far longer in war time as opposed to normal usage.

weburke's picture

it is needed for heating due to.......

Stained Class's picture

Where are they storing it?

Escrava Isaura's picture

 

 

“United States is becoming a failed state, and thus a danger to its own people and the world.” – Noam Chomsky, 2006

 

So, China plays safe and does nothing.

 

Russia needs to show strength (military and moving East) while being diplomatic (not confrontational) especially around NATO.

 

However, the trigger (miscalculation) will come from NATO and the US because Russia does not have enough energy to supply Europe, Asia, and its own growth and people.

 

Ladies and gentlemen, there won’t be utopian future. More of the same is about to end.

 

WhyWait's picture

Global warfare appears inevitable.  

"World War III", which implies full-scale warare to the death between the world's major players using all their most lethal weapons, might not be inevitable, because even the lunatics in the Pentagon know it would be suicide.

If the Anglo-American Empire can be contained long enough to collapse and expire from its own internal contradictions, our civilization and species might yet survive this crisis.  It will require all the courage, resolve, nerve and patience the leaders of Russia and China can muster, and a revived and vigorous anti-imperialist and populist movement in the US. 

Let's hope they - and we - succeed.

TheFourthStooge-ing's picture

Based on his solid record of impeccable timing, we can expect that soon Obama will release a significan amount of crude onto the market from the SPR.

ebworthen's picture

I'd wager that the Kleptoligarchy continues to sell us out to the East, increasing the militarization of police and control of the populace, while blustering and enriching the M.I.C., the Banks, and themselves.

The citizens of the West are the ones who will suffer when the reserve currency status ends, and the long slog towards declining empire being consumed one piece at a time accelerates.

livefreediefree's picture

WhyWait,

... species might yet survive this crisis. It will require all the courage, resolve, nerve and patience the leaders of Russia and China can muster

It is the height of intellectual dishonesty and folly to apply those 4 nouns following all the to the Russian and Chinese leadership. I can see, however, some justification for the ending verb; eg, "muster gas".

bid the soldiers shoot's picture

Don't forget the "1984" option.

Mundus est omnis divisa in partes tres. 

cnmcdee's picture

Sadly 2015 is going to be shocking

A DIRTY NUKE WILL TAKE OUT 5 CITY BLOCKS OF CHICAGO in the spring of 2015, by the US government itself!
  - Iran will be blamed as the perpetrators and the public will DEMAND the nuking of Iran in retaliation (which to the benefit of the Globalist interest's they will gleefully comply).
  - Iran oil facilities will be taken off line by bombing reducing 2 million barrels of day of production to get oil prices back up.
 -  Russia will loose there only major ally (Iran) from the strikes.  They will be unable to stop the US strikes as the US will have the political currency required for this attack since from the public and international perspective the US was hit first.
 -  Canada will be annexed in a back room deal as a result of this attack - being blamed for allowing the 'Iranian terrorists' into the country, and also as a punishment for Harper setting up trade deals with China bypassing the US dollar.
 - The US will default on it's debt eventually (by the fall??)!!  International investors will also get a back room deal for pennies on the dollar.
 - The US will be under emergency police powers (not called martial law) this will be the answer to all future riots and uprisings.
 - All 401K's will be frozen, bank balances and stocks over a certain value will be frozen.  It will be called the 'Obama Freeze' - thus all US citizens will have their assets frozen inside the country preventing a bank run (captive citizens / captive investors.)
 - Once the US defaults on it's debts  some time by the fall of 2015 the timing is not exactly known - international investment into the country will halt, and by this eventually cease.  The US will be desperate for investments and this will cause interest rates to skyrocket.  Unlocked mortgages will skyrocket in tandem with people walking on their homes, causing a real estate price collapse in excess of what happened in 2008.
 - This false flag must be conducted in the spring to give a good bombing window to run it's course through the summer.  Iran is mountainous and stormy making a bombing campaign difficult in the winter.

Israel will be an ally in this coming strike, and will also be using nuclear warheads against Iran. When they do this every regional Muslin nation will be unified and launch war against Israel.

But what the US does not know is that in the fall of 2015 a tsunami about 300 ft high is going to strike the West coast of America and cripple her.  She will be unable to help Israel as a half dozen nations will declare full war against Israel and what happened to Iran.

THE ONLY ESCAPE VEHICLE IS PHYSICAL GOLD.  When there is nowhere to invest because the stock market tanks from these events by the fall of 2015,  and the government is defaulting on debt,  the banks have frozen accounts, and real estate prices are collapsing because of shock interest rates from the coming default - THE ONLY ESCAPE VEHICLE WILL BE PHYSICAL GOLD.  While prices will fall on everything  denominated under the US dollar 40-80% gold will appreciate 250%.

If you buy $100,000 in physical today it will have 10X the purchasing power by the winter of 2015 ($1,000,000).

gswifty's picture

Interesting prediction, with details. I don't suppose you have a source?

strangeglove's picture

If you buy $100,000 in physical today it will have 10X the purchasing power by the winter of 2015 ($1,000,000)

If it dosent melt in the apocalypse to follow.

So I should be ok in NY?

cnmcdee's picture

Eventually no. Initially Yes but under martial law.  Before the full nuclear exchange where Russia nukes America  40 million will die at some point in a single night from the Meteor Impact into Peurto Rico,  It's going to cause a tsunami to hit New York (sorry I know these are nasty predictions).  It will knock the internet out for a year as I understand it.

Looking forward after all this crud of 2015 we have a long period in years where we basically are just simply in a depression. Nothing big happens for several years until the peace agreement is brokered where Jerusalem will be divided but Israel will regain the temple mount. Wait I figured this out.  The strke of the meteor happens on the same day as the New Madrid Earthquake which splits the Mississippi 100 miles wide. Now this is where I get confused because some sources indicate that the full nuclear striks immediately follows from Russia, but other sources disagree putting it into a time frame three years after that event.  I don't know which will come out..

 

 

The Big Ching-aso's picture

Hmmmm. Didn't ya just say a 300 ft tsunami would strike the West coast but then also say a tsunami would hit NY or the East coast so are we now talking stereo water catastrophes?

I mean who deliberately wants to flee to the Midwest when the Mississippi is supposed to go Red Sea, man? This is like surround sound mayhem there, dude.

Btw, put down that Edgar Cayce book. I think he was hitting the magic mushrooms too much.

bid the soldiers shoot's picture

If you live in the Village you'll be fine.

cnmcdee's picture

I need to add some information <after> these events.

After these events there will be some period of time in years. The world will be in an ongoing depression. 3.5 years is a possible number before the next major events, but the duration I have not figured out yet.. the war will wage during this time regionally in the middle east.  Eventually the anti-christ will arise and broker a peace deal, with the partitioning of Jerusalem as part of it, but in exchange Israel will retain the temple mount. THE VERY NEXT DAY an earthquake will strike America in the heartland splitting the United States in two causing the Mississippi to breach to 100 miles in width.  There is conflicts of what happens at this point, but two parallel possibilities sit.  A. Russia sees these events and launched a full nuclear strike on America as her nuclear defenses are offline.  However either my understanding is in conflict, or those who are predicting this are not in agreement, I have not ascertained which yet.  The nuclear strike on America is supposed to happen when America goes to war with China.

Sisyphus's picture

Horry Krishna!

Cannabis sativa, Cannabis sativa forma indica, Cannabis ruderalis--which do you prefer the most? I'll try them accordingly.

weburke's picture

or perhaps something goes [Poof] in a muslim holy place, israel has an internal war on its hands, plus external, what, again, is that wall -allegedly- for? us goes under some cyber attack and WE have an internal war on our hands, ect ect. if there was a god of math, perhaps gold would have a shot. but since men rule..... Nukeing iran ? how primitive ! 401k's will be frozen? how about just have them invested in alibaba and the forty thieves and watch it go down? a 300 ft tsunami would have to be approved by the high councils, and that is just so sloppy, and wipes out so many fine homes, perhaps a smaller one? south central size perhaps? but why really, when poison is so available and people eat it so readily. Including you I bet ! Do you care to know what you put in your mouth? or does your tongue rule you more than any other power.

Mad Muppet's picture

I suppose this nuke will be delivered by a dirty Roosian commie bear, with sharp snarling teeth. Teamed up with an alCIAda thug, and piloting a black helicopter.

Againstthelie's picture

China and Russia may act as clever as they want to prevent war, but since US Americans are dumb as bread (attracted by "Yes, we can!" or "Change") the warmongers in New York, the City of London and Israel will get what they want.

Bloppy's picture

When China collapses will they really need all that oil?

 

Apple drop = CNBC panic

http://tinyurl.com/ku24gff

Leveraged Algorithm's picture

Where are they going to put it? In the empty warehouses?

Rock On Roger's picture

In a hole in the ground.

Just like where it came from.

 

Pump On

joego1's picture

It's not like they don't have enough excess steel to make tanks with.

himaroid's picture

Same goes for more strategic metal.

oak's picture

china tades the us$ with au and oil. the saudi is digging its own grave.

SilverIsMoney's picture

Saudi's are crashing oil in dollars as preparation for accepting the new gold backed Yuan and Ruble or Brics currency...

Maybe... maybe not... fun to guess...

dalitis's picture

As always, it is the long-term that counts. 

HeadintheGame's picture

Where is Chill Wills when you need him?

MarkAntony's picture

I think this crude drop is pre-planned to take the blame off of TPTB after our economy tanks next year following the bond market bubble burst.

stant's picture

All those empty cities are spares

tarabel's picture

 

 

The biggest winner is Saudi Arabia, which just unloaded a buttload of crude at an above-market price to a mercantilist nation that is already drowning in excess commodities and capacity.

The biggest losers are those oil-producing nations that are banking on future Chinese demand. Question: will the kleptocrats at various SOE sell themselves oil at 50 out of their mini-me SPR or buy it from overseas when the price goes back up to 100?

 

 

KuriousKat's picture

Meanwhile  back on the Eastern Front Russias Putin Turkeys Ergodan  close Gas Deal after EU and Bulgaria block Southstream

Dang That Putin guy is good. How does he do it?

 

http://rt.com/news/210511-russia-turkey-gas-pipeline/

    Home /
    News /

Gazprom to build new 63 bcm Black Sea pipeline to Turkey instead of S. Stream
Published time: December 01, 2014 18:13
Edited time: December 01, 2014 23:07
Get short URL
RIA Novosti/Michael Klimentyev

RIA Novosti/Michael Klimentyev
2.1K55010

Tags
EU, Gas, Russia, Turkey

Gazprom CEO Aleksey Miller said the energy giant will build a massive gas pipeline that will travel from Russia, transit through Turkey, and stop at the Greek border – giving Russia access to the Southern European market.

The pipeline will have an annual capacity of 63 billion cubic meters. A total of 14 bcm will be delivered to Turkey, which is Gazprom’s second biggest customer in the region after Germany.

Russia’s energy minister Aleksandr Novak said that the new project will include a specially-constructed hub on the Turkish-Greek border for customers in southern Europe.

READ MORE: Putin: Russia forced to withdraw from S. Stream project due to EU stance

While the pipeline will be registered as a Russian company, Miller said that Gazprom will “consider offers from Turkish partners if they express an interest in buying into the project.”

For now, the supply of Russian gas to Turkey will be raised by 3 billion cubic meters via the already operating Blue Stream pipeline, Vladimir Putin said during a joint press conference with his Turkish counterpart, Recep Tayyip Erdogan. Last year, 13.7 bcm of gas was supplied to Turkeyvia Blue Stream, according to Reuters.
 Moscow will also reduce the gas price for Turkish customers by 6 percent from January 1, 2015, Putin said. Later, Novak said the discount could reach 15 percent, subject to negotiations.

Novak later confirmed that Vladimir Putin personally ordered for the South Stream project to be mothballed, and its existing facilities to be repurposed for the new Turkish pipeline.

The much-delayed South Stream was supposed to connect underwater Black Sea pipelines with a network in Eastern Europe, with Bulgaria as the entry point.

The project had run into difficulties, as it violated EU regulations on the same company owning the pipelines and the gas they transported. While several previous governments in Bulgaria, which is wholly dependent on Russian gas lobbied Brussels to make an exception, the current government said it would not give Gazprom a building permit. The cost of the underwater and Eastern European segments of the project was estimated at €23,5 billion, by a senior Gazprom official last month.

The new project will include a specially-constructed hub on the Turkish-Greek border. Russia’s energy minister Aleksandr Novak said it will supply customers in Eastern and Southern Europe.

Schmuck Raker's picture

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Wahooo's picture

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usednabused's picture

Whats 84 tankers spread amongst Chinas population*usage? Hell not even a fart in a whirlwind! Id like to know is just how to forward contract my own gasoline bills at these prices for a few years down the road.

noben's picture
noben (not verified) Dec 2, 2014 12:43 AM

This is not "news".  ZH bloggers have pointed this out weeks and weeks ago.

Nothing like recycling/plagiarizing old blogs and presenting them as your own.  Makes me think of George Carlin and what keeps America going:  Bullshit!

coast's picture

At least the baltic dry index will go up now :-)

viedoklis_lv's picture

And the biggest looser is... Putin regime with it's undeveloped economy based on oil that now is crashing with it's weak ruble. From 33 RUB for 1 USD year ago to 53 RUB for 1 USD now.

U4 eee aaa's picture

Nothing solves low prices like low prices

Welcome to market efficiencies 101 kids

Incubus's picture

they're just stockpiling that shit for no reason.

 

Know what's going to happen when WWIII starts?

 

The hawks and neocons are going to go over there and liberate their oil stockpiles. 

game over.

Unless China and Russia really ramp up their military tech, this is going to be a one-sided game.

 

The US and the middle east agenda is a perpetual war by design.  The MIC is divorced from the civilian world, and it will consume the civilian aspect of american society if it becomes a necessity during WWIII.

If the US military machine wanted to "fix" the middle east, it would be over within a week.  Those talitubbies and their sand religion gets a boost to the apparent significance of their culture because the MIC needs them to be the emannuel goldstein.  Once a real adversary comes along, you'll see how quickly insignificant the whole terrorism threat becomes.

CHX's picture

Fizz delivery 4 $$. Sounds like a plan. 

F-X's picture

Quote:

"This is a golden time window to acquire more strategic oil at lower costs," notes one Hong-Kong based analyst,....

 

My Comment:

Good thing this highly paid analyst is willing to share valuable analysis wih Bloomberg. How else would we know?

 

Quote:

China boosted imports by 8.3 percent, or 460,000 barrels a day, in the first nine months of this year

 

My Comment:

This is less than half of 1% of world daily production. Not really that intense.

 

Quote:

84 tankers remain en route to Chinese destinations

 

My question

How many tankers are normally en route to China every day? 83? Without that info, it's not that interesting.

 

Quote:

  ...it buys all the physical it can get its hands on.

 

My Comment:

Not really. I suspect if it wanted more than 0.045% of world daily production it could get it quite easily.

Kina's picture

So China is backing up the truck. For oil and gold.

Yellow gold, black gold.

the6thBook's picture

Could be a good idea... but not if oil goes to $30/barrel.

AdvancingTime's picture

How these lower prices effect a particular nation will vary and will effect both their currency and how competitive they will be going forward.The decision by OPEC members Thursday to keep their production ceiling unchanged has sent crude prices into a tailspin. Dropping oil prices add a new surprising new dimension to the stability of the world financial system.

While often heralded as a godsend to the economy and the end consumer we must remember lower prices hurt both producers and those in the business of oil exploration, drilling, and sales. The shale boom has been one of the bright spots in the economy in recent years and acted as a tailwind that accounted for much of America's growth. Expect this to come to an abrupt halt and with it thousands of jobs. The article below delves deeper into the economic damage lower oil prices can foster.

http://brucewilds.blogspot.com/2014/11/dropping-oil-prices-increase-risk-to.html