And so the lunacy hits a crescendo:
- U.S., U.K. AGREE TO EMERGENCY OIL STOCKS RELEASE, REUTERS SAYS
Hi China, this is Barrack, please buy our oil at firesale prices as you in turn build your strategic reserves. I have a reelection to win. Oh and when Iran attacks one of our 3 aircraft carriers parked next to Tehran in a false flag attack, at least oil will soar from a lower price point.
In other news, Barry's reelection is now a matter of national emergency.
Here is a chart of US SPR vs Oil, courtesy of Reuters.
And, as a reminder:
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.
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 February.
A new all time record.