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As US Contemplates Releasing Crude From The Strategic Reserve, China Resumes Building Emergency Inventory
A tale of two civilizations, one in ascent and one in decline, can probably be best summarized by how they ration for the future in that most important of commodities - energy, in this case vis-a-vis the respective treatment of the strategic oil reserves of China and the US. Because while all the rage in D.C. political gab in recent weeks has been whether the US will allow a release of oil from the SPR, just to appease those Obama voters who actually have a job and have to take a car to get to it, things over at America's nemesis in civilizational conflict are diametrically opposite. As Bloomberg reports, China has "started filling its emergency petroleum reserve at Lanzhou in the nation’s northwest, according to an official at the nation’s largest crude producer." Unlike the US, where everything is now a function of market liquidity, evil speculators, and political ambitions (rest in peace supply and demand), China is completely ignoring all the day to day mundane drivel, and is doing what is right - which is to make sure it is prepared for an "eventuality" in the crude supply. Said eventuality is 100% guaranteed to happen if the Panetta-McCain is given a green light to allow the liberation of Iranian crude to finally proceed following years of foreplay.
From Bloomberg:
China, the world’s second-largest crude consumer, finished filling the first phase of its emergency stockpile with 103.2 million barrels of oil in 2009. The second phase, comprising eight locations with a storage capacity of 168.6 million barrels, is scheduled to be completed by early 2013. The Lanzhou depot has a capacity of 18.9 million barrels.
The nation imports 10 million metric tons of crude a year, or 200,000 barrels a day, from Central Asia via a pipeline from Kazakhstan that started in 2006. The annual capacity of the cross-border oil line, China’s first, will rise to 20 million tons by 2013, according to CNPC.
As a reminder, here is how Chinese crude imports stood most recently as of January:
Yes. A record.
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All your crude are belong to us.
Obama Strategic Election Reserve
Who needs an SPR when you can just go take it from Iran?
Yes who needs reality, when we can just take over the entire world! Pretty much baked in already....now they just have to pull it all off. Personally I think it all goes wrong.
Why take from Iran when it can be taken from Iraq or Afghanistan?
Oh, Wait. That nonsense did not happen either.
FukiSam had too many chili beans and the brain fart exploded.
It will probably take 100 barrels of oil powering our war machines to capture each barrel of oil in Iran
yep a nice circle jerk, the US Military uses something like 20% of America's crude...while they are getting America's crude
YEP, HOARDING DOES WONDERS TO SUPRESS PRICES!
AND BOY OH BOY WILL THE CHINESE FEEL LIKE IDIOTS WHEN WE'RE ALL DRIVING ELECTRIC CARS WHILE THEY HAVE BOUGHT ALL THE OIL IN THE WORLD! SUCKERS BITCHEZ!!! .... ....
How long till' the Chinese liberate Americans from themselves?
I understand Walmart is also building emergency reserves of cheap Chinese iThings.
Laughing all the way to the bank, but it isn't me.
"How long till' the Chinese liberate Americans from themselves?"
That's a 50-year project.
If that graph indicates anything it is that the US won't have the cheap oil resources necessary to build this fleet of electric cars that is supposed to "save" us.
Plant a garden.
People talk about the energy problem like it's a problem of production.
It's a problem of consumption. That's where we can make major breakthroughs, with existing technology. Plant a garden. Ride a bike. Turn off the air conditioner and sweat a little you fucking idiots.
Observe an entire country hooked on a drug.
And it ain't heroin.
I dont care about oil myself, I dont need it.
This will all really suck bad for the avg consumer-merican soon though.
I like oil but abhor the idea of murdering people to maintain an easy supply and low price of it.
It will not be an easy supply by any means. Any oil fields and pipelines not sabotaged by guerillas will come at a steep price of not just blood and money, but OIL used to power our war machines. It's a dead end attempt at a solution, but it makes rich and powerful people more rich and powerful so we all have to go along with it. Remember they hate us for our freedoms.
So you're saying you are typing on a keyboard made of wood?
Yep.
My PC is made from wood: http://www.frontiernet.net/~jimbot/allsparkproject.htm
(Well, most of it anyway:>))
The only real oil of value is Gash Oil.
Bullshit, even if you don't drive, you buy things that are transported using oil, oil is used for all farming. You eat don't you?
The SPR is a political tool, not an economic one.
they probably are trying to talk down the price, when Israel strikes Iran that is when they will have to release it, of course coordinated with Election
"..China Resumes Building Emergency Inventory"
Gotta get rid of those Dollars somehow so may as well swap the Fed toilet paper for something worthwhile
While I agree with that sentiment in theory, in practice, China needs to hold vast amounts of US dollars in order to maintain their currency peg.
But I suppose that doesn't preclude them from using some excess FRNs to get their hands on the black gold.
China is preparing to cut that peg. When that happens shit will hit the fan.
"China is preparing to cut that peg. When that happens shit will hit the fan."
---
Not sure if that is their intent, but it would sure be an effective way to wage an economic war against us. It would cost them as well, of course, but what war doesn't?
Why would they cut the peg?
They would be shooting themselves in the foot, unless you are arguing that they want to devalue, are you implying that?
The peg is how they devalue their currency, in effect cutting the wages of their workers among other things.
That of course helps their exports, but eventually they're going to need to get away from building stuff for us for slave wages. Once they get their infrastructure in place, and have the know how, and the trained workforce, they can stop taking our ever devaluing pieces of paper and make stuff for themselves, or for countries and people who can give them more value for it.
Price inflation is much worse when you have 1.2 billion mouths to feed. China should know that they helped build this monstrous system and are now just as beholden to it, if not more, than any other participant.
In the 1980s everything we bought had a "Made in Japan" label.
In the 2000s everything we bought had a "Made in China" label.
What happens to China if another name appears on all those labels? Are they ready for that?
ZH had an article on that. China is buying factories in eastern Europe to hedged against that happening.
Is Bulgaria really the answer? I'm being serious. Of all the countries I would be looking at to invest in that might be pretty low. I never hear a good story about Bulgaria, of all the former Eastern bloc countries.
They make decent AK's. LOL
Thought that was the Romanians? Actually all those former Soviet colonies probably make decent variants.
I have a Bulgarian base rebuild from Lancaster Arms and love it.
Bulgaria is a proper thug-ocracy, run by former weightlifters from their Olympic team. Yah those same guys you see on YouTube blowing enormous farts as they clean and jerk 700 pounds
Bulgaria runs a balanced budget and is ready to join the Euro zone. Bulgaria is actually a shining example to its neighbour, Greece.
One is looking long term, the other living day to day...
I find it hard to believe that China is somehow the ant in this story. If anything, it's the Chinese who are living paycheck to paycheck and kiting checks.
That is asinine. The Orwellian terminology has you terribly disillusioned.
Right! The printers belong to DC thus it must be better off!
"the other living day to day'
more like looting like there is no tomorrow (which there probably isn't)
The chess pieces continue to be moved in preparation for peak war.
'Check....checkmate....check....checkmate' for 3 years now.
Can't wait for the draft. I'd seriously go to war if some pig politicians got out of DC and went on the battlefield. But they won't, so fuck em. I'm not gonna fight someone else's war. My "war" is a socioeconomic one. My "war" isn't a physical one where pigs sit around in their suits and find boogeymen to throw "excess" human "labor" at.
LOL whats wrong....$106 oil putting a bit of a bind in the Maniacal Monetizers panties?
Skid marks
Is it possible that China's is a more capitalistic, more market-oriented economy than of the United States?
"than of the United States" = "than that of the United States"
I've never seen someone get junked for making a correction to their own post. Five times over, at that.
Just messin with the guy.
Lulz.
Just messin w u 2 sweetie
Good! Its nothin compared to the kornholin we're all about to get!
Agreed...
Had to junk you for the junking.
I'll be your huckleberry. I junked you for junking the junker!
Serves me right for wanting correct grammar. Bunch of backwater ingrates...
Yea really...friggin hicks...btw for future reference you can edit comments if you want.
You meant to write, "It serves me right for wanting correct grammar," right? If you're going to bitch about other people's bad grammar, you should use complete sentences.
No, actually I didnt down vote anything, and just offering helpful future advice.
No, just better at central planning since they are not subject to The Electoral Cycle.
Ha! you got junked for grammer-naziing your own post! Should have just used the Edit function ...
SPR = Peter North, US Consumer = Chicks Face, Effects are equal in time and enjoyment.
So Obama aids in 'the release' ?
I'm confused... you vist ZH to jerk-off?
You say that like its not normal.
I cum in my pants every time MillionDollarBonus_ posts .... don't you?
Energy wars. without the big E an economy will drop to subsistance level.
http://speaker.gov/UploadedFiles/gas_prices_chart.png
Go green muther fuckers! A Volt in every garage powered/charged by solar cells!
awesome.
Might I also add... "A Volt in every garage powered/charged by solar cells manufactured in China."
did someone mention chinese solars? where's Leo?
FYI, there is some indication from JODI and EIA both (the two agree in a rare case on China) that mid 2011 was China's domestic oil production peak. They hit 4.2 mbpd production in July of last year and November's data says 4.0 mbpd, with a steady decline in Aug, Sept, and Oct.
China may have hit their peak last year. Imports will ramp up sharply if the peak holds, because mostly of those 26 million new total vehicles they project to buy each year. Car sales were 14 million last year, another 1 million in heavy trucks and other vehicles. They are projecting 26 million/yr in years to come.
If you tack on 700K bpd of consumption each year (from 26 million new cars each year), and produce say 150K bpd less each year domestically, presto that's 850K bpd of import increase and it's EVERY YEAR. That's out of 3.3 million barrels/day of their present oil imports (the metric ton to barrel conversion is about 7, divide tons by 7 for barrels). That, my friends is friggin 26%/year increase in oil imports.
Where is that going to come from? Who isn't going to get it who is getting it now?
Look in the mirror if you're American and look at the face of economic decline.
Yeah... I saw this analysis/discussion on Chinese production...
Way too early to draw any conclusions, but it may herald that they are plateauing....
But, your long term argument is bang on re: Chinese imports...
The economic/demographic factor is whether the rate of noveau riche consumption in Asia is greater than the demand destruction amongst the lower rungs here (and elsewhere)... At present, it is clear what the trend is, however, to project that too far forward may be a mistake..,
No matter how you slice it and dice it, the current trends of rising Asian demand, declining net Exports and plateaued production will not make for a happy time when they intersect in the future....
China is also investing heavily in renewable and solar as well. From the basic research right on down to the manufacturing technology. No energy, no economy, it really is that simple. but I digress, it takes a lot of energy to feed a billion people too, and with the average Chinese citizen spending more than half their income on food alone, I say good luck China.
Yes, I agree, but based on history what country is better "psychologically equipped" to deal with the loss of ~10% of its population through famine and whatnot....
Good question, I would also add, what country is more prone to aggression, better armed, and has fought a civil war recently? How is your mandarin Flak?
I'm afraid, not very good....
When it comes to catastrophically bad decisions, I don't worry about the Chinese.... I worry far more about the "good guys"....
FWIW, the Chinese had a civil war more recently that the U.S.....
We'll have spending half our income on food in common with the Chinese soon enough.
Hmm, our Clowngress is full of "investments" too:
The Stimulus Plan The National Institutes of Health spending more than $400,000 in taxpayer money by paying researchers to cruise six bars in Buenos Aires to find out why gay men engage in risky sexual behavior while drunk -- and just what can be done about it.
The U.S. government is spending $2.6 million to make sure prostitutes in China consume less alcohol while working. As part of the five-year study that the National Institutes of Health bankrolled, researchers are visiting more than 100 houses of prostitution to monitor their employees, designated as FSWs, or female sex workers.
The National Institutes of Health (NIH) is funding a study on the use of ecstasy, LSD and other “party drugs” in Porto Alegre, Brazil. To do this, U.S. taxpayers will invest $117,876 for the three-year study, conducted by researchers from the University of Delaware, who will work in collaboration with researchers from Brazil's Federal University of Rio Grande do Sul.
Federal employees wasted at least $146 million over a one-year period in business- or first-class airline tickets bought in violation of travel policies, congressional investigators say.
It looks like Rep. Charles Rangel, D-N.Y., is going to get his wish – $2 million in taxpayer funding for a library commemorating his 37 years in the House of Representatives. The Charles B. Rangel Center for Public service will serve as a repository for his "papers," and the congressman will have his own office in the Harlem complex.
The earned income tax credit (EITC) provides $31 billion in refundable tax credits to 19 million low-income families. The IRS estimates that $8.5 billion to $9.9 billion of this amount—nearly one-third—is wasted in overpayments.
A recent audit revealed that between 1997 and 2003, the Defense Department purchased and then left unused approximately 270,000 commercial airline tickets at a total cost of $100 million.
Since World War II, the U.S. has spent $1.2 trillion on foreign aid to 70 countries – and all are worse off than they were in 1980, according to the U.N.
For the Department of Commerce for giving the City and County of Honolulu $28,600 in 1981 to study how they could spend another $250,000 for a good surfing beach.
For the Health Care Financing Administration for Medicaid payments to psychiatrists for unscheduled, coincidental meetings with patients who were attending basketball games, sitting on stoops, etc. -- the cost of which was between $40 and $80 million from 1981 to 1984.
The National Endowment for the Humanities for a $25,000 grant in 1977 to study why people cheat, lie and act rudely on local Virginia tennis courts.
The Office of Education for spending $219,592 in 1978 to develop a curriculum to teach college students how to watch television.
The Environmental Protection Agency for spending an extra $1 million to $1.2 million in 1980 to preserve a Trenton, NJ sewer as a historical monument.
In 2005 - $469,000 for the National Wildlife Turkey Federation in South Carolina
In 2005 - $100,000 for the Punxsatawny Weather Discovery Center Museum
In 2005 - $350,000 for the Inner Harmony Foundation and Wellness Center in Scranton, Penn.
In 2005 - $1,430,000 for various Halls of Fame, including $250,000 for the Country Music Hall of Fame and Museum in Nashville, Tenn., and $70,000 for the Paper Industry International Hall of Fame in Appleton, Wis.;
Spending our way to prosperity, one pork-barrel at a time!
" The National Endowment for the Humanities for a $25,000 grant in 1977 to study why people cheat, lie and act rudely on local Virginia tennis courts."
and...so why did they?? and was it only on the tennis courts? Huh? Where is that $25000 answer??
U.S. economic model now simply consists of fire hosing free money directly to banks at 0%, and tapping the strategic petro reserves....lol brilliant.
It's the Amerikan way....
Let's be honest -- the SPR is 'truly' meant for contingency situations for the military -- we can assume China's is meant for the same. However, just like Social Security, DC asshats are too busy dipping into the cookie jar for their own personal advantage.
Ants vs grasshoppers, people.
Were so fucked. We don't even know it. (except most ZH'ers)
You would be correct, sir. Truer words have not been spoken.
With the national emergency causing the releasing of the SPR being high gas prices, the SPR will be completely empty in no time.
Somebody please tell Obama that the purpose of the SPR is to stop America from being annahilated, not to hold down prices.
TheSilverJournal.com
ObaMao's main purpose IS to annihilate 'America'. Been trying to tell people that forever.
Hell, I wouldn't be surprised to see a direct transfer from our so-called SPR right into China's.
I wouldn't be surprised if this hasn't been happening for some time. China has/is buying up large chunks of this country, it would be illogical to think they wouldn't buy access to our SPR as well.
It is really pathetic watching our "leaders" do anything they can to hold on to the reigns of power. I wish they could see through the eyes of others just how feeble they look.
Who are these 'others' you speak of. Short of the few measly tens of thousands of us on blogs like this that's about all the 'others' that I see that know the real score. The other 300+ million Americans are blissfully sleepwalking through life eating cheetos in their underwear and cackling at the antics of those zany kids from New Jersey. Hell after 160+k votes on cnn asking if we should use military might to stop Iran from developing nukes, over 65% of the respondents said yes. And that was on the most liberal news site in the world. Imagine what the fox news results would have been. 45% of Americans still ardently support Oblamebush. Forget it man, there is NO hope for people 'getting it'.
"Short of the few measly tens of thousands of us on blogs like this that's about all the 'others' that I see that know the real score"
Those are the eyes I'm referring to. I know the rest aren't going to get it until it's too late. They are still arguing over which color is better ...red or blue.
But I read ZH while I eat cheetos in my underwear.
Where do I stand? Suddenly I'm so confused... Maybe I should turn on CNBC to get the real news.
and this is the reason why china's currency will be the most influential in 10 years. as i have said before, sadly, the u.s. can't see past its nose while china continues to build for the future..............
You know what makes me laugh is people reply 'Oh yea well China doesnt dare to do shit to us we'll just beat em with our super kewl military' BLAH BLAH...hell all China would need to do is dump $500 billion in UST's on the open market overnite and the lights go out here in 'Merika.
The Fed would just buy those Treasuries. The goal is to get American Workers, who feel they DESERVE a specific nominal wage, to be competitive with Chinese workers, while retaining their nominal pay / benefits / pension. China dumping UST might benefit this plan.
This is a universal goal that all the "owners" of the world banks are trying to implement, social and environmental consequences be damned. Glad to see more awakening.
I don't know about the lights going out, PRC has investment interest in electrical generation. Recent news about Progress Energy, Portuguese utilities, etc, suggests long term grip on the nads of what people consider a most important feature of a "modern lifestyle."
China is already dumping treasuries like crazy. If things are so "good" in China, then why do I recieve about 50 applications per month for the engineering positions I have? Just curious. I guess I'll find out in July when I am in Beijing. Damn hard workers. Not so innovative, but will run a process very efficiently.
LOL! Yeah, China's central banks never interfere in their currency markets. What color is the fucking sky in your world?
There is a clear failure of US policy in Syria. Sadad was capabale of destroying US/NAYO mercenaries and internal traitors/terrorists. It was done with Iran help.
Consequently, both Syria and Iran see clearly that anly brutal force and inflicting heavy losses on US/NATO they can prevail. As for Israeli, they only can fight unarmed civilians and pro-US Arab governments betraying its own people.
Lately Syria got a lot of Russian airdefense systems it will gladly share with Iran.
Finally, "official" Chinese defense budget exceeded $100B. Add to it:
Consequently, very soon, Chineses defense expenses will exceed the US defense spending. As for quality, Chinese will "get" the latest US defense technology...
In a few years, the USA will be in terrible shit.
My recollection is that the SPR is a STRATEGIC reserve, i.e. a national supply of readily available oil to fight a war if need be. SO...If war (which might deny access to oil beyond our shores) is no longer in the cards - then oil is not so important. World events suggest otherwise though.
Isn't it a given that we will take Iran's oil when we rid them of WMDs? So what if there's a temporary "supply disruption"? The price doubled after taking Iraq's oil and will probably double again if we take Iran's. Do you think the energy companies are worried about the price? As long as China can't buy iranian oil with Yuan or gold, don't you think the US government will pat itself on its back for a job well done?
We aren't going to get the Iranian oil and gold. This will be one war to many. Not to mention it will be a proxy war with China.
And hundreds of other angry bondholders and US financeers around the globe like Pootie Poot.
You think Greece wants out of the Euro? Wait to you see countries scramble to get out of the petrodollar cartel company scrip!
Iran's oil is not the objective. Maintaining the petro dollar status is. We could just as easily give all of Iran's oil contracts to China to achieve that goal. It's just a theory...
Like I said. One war too many. The petro dollar is doomed.
I concur that it is doomed, and I definitely do not believe the effort to maintain it will be successful. China may act as if it wants to help, but it is certainly snickering in private. The Russians are loving it too.
Heading to my Mandarin class.
Russian is an excellent choice as well.
.....mean while all these ships are idling around the ME,...buring oil.....
This isnt funny any more.
Anybody but Obamao.
Well anybody but Obamao, Santorum (the devil is everwhere), Gingrich, Romney. Did i miss anyone?
LaRouche the Douche.
And Nader: I hate that fucking goodie two shoes.
You missed Jeb Bush, lurking in the wings of a brokered convention.
Changing nation state's head puppets will not help.
"Oil's Well!!" - US
"You have something stuck in your Hormuz." - CHI(ra)NA
My favorite is the Hormuz Steak and Mashed Potato Microwave Meal
Why are people so surprised when China behaves in the most efficacious fashion possbile, designed to push growth and security forward?
Believe it or not, part of the answer is that the Chinese Bureaucracy rules things in a way that the short term gain of a few is subserviant to the goals of the collective... In other words, they are not going to let a few plutocrats enrich themselves in a manner that is detrimental to the long term goals... Moreover, they are absolutely ruthless in their pursuit of this policy...
the oily boid gets the woim
US spr : As of May 31, 2011, the inventory was 726.5 million barrels (115,500,000 m3), on a total capacity of 727 million barrels. This equates to 34 days of oil at current daily US consumption levels of 21 million barrels per day.
Chinese spr: currently 101.9 million barrels, with a maximum capacity of 475.9 million barrels. Interim plans are to have 204 million barrels with the goal of increasing China's SPR to 90 days of supply by 2020.
Comment: Sitting at full capacity, and oil prices on the rise, someone in the US thinks this is a good time to make some money.
China on the other hand is trying to fill their reserves, at only 25% they have a way to go.
Of course, one looks at the fact that a topped-off SPR is only a month's supply at current rates of consumprion, and has to wonder, "Why do we want to attack Iran?"
IIRC the SPR can only be accessed at a rate of ~2 mmbpd..
Ah... a trip down memory lane....
http://archive.arabnews.com/?page=6§ion=0&article=44011&d=29&m=4&y=2004
April, 2004: Saudi Oil Is Secure and Plentiful, Say Officials
I think this is a Rothchild fear, that one of the CBs would go off the reservation... China seems to be doing so by putting more emphasis on commodities than fiat. Russia probably belongs in this category as well. One things for sure, it ends with WW3.
Honestly, how many posters on this blog are un/under-employed English Majors ?
We cannot be this stupid.
Must not.
I like Mike Ruppert's idea of having a second, full SPR that only municipalities can access for true emergencies. Currently they can't directly access the SPR because it is in the control of the Feds.