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This could be good for the industry - especially as China is the world's second largest consumer. One major problem I see would be that it's yuan-denominated which wouldn't bode well if the PBoC continue some of their currency rate shenanigans. Then again if they decide to float their currency and remove the peg then a Chinese 'petro-dollar' could be quite powerful.
Can you help answer these questions from other members on NexusFi?
Trading: Primarily Energy but also a little Equities, Fixed Income, Metals, U308 and Crypto.
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My personal opinion is that it won't become a major contract, for two major reasons. The first as says, who wants to trade a yuan denominated contract (other than the Chinese) but secondly who is going to want to deploy significant capital into a market where the government could intervene and do anything they want at any time, including manipulating the market & halting the market.
Despite some claims in the news, Chinese demand for crude oil doesn't seem to be waning. Although its demand for refined products has decreased, this has been gradual as the country began to develop its own refining technology. It's …
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Here is the latest results from the 'China Oil Balance' data. It shows that net crude oil imports fell in August to 26.37 - moving lower back towards it's annual SMA of 27.1268:
Trading: Primarily Energy but also a little Equities, Fixed Income, Metals, U308 and Crypto.
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Worth noting that even with the production ESTIMATE drop, production is still 500,000bbl/day higher than a year ago and only back to levels seen at the beginning of this year.
Maybe more concerning is that refinery runs seasonally drop at least another 1 million bbl/day over the next 2 months.
As such crude inventories seasonally increase by 20ish million bbls in the next 2 months. If that happens it will put us close to the Apr all time stock highs.
The average drop in oil input to refineries from middle of July to middle of Oct is 1.235 for the years 2010-2014.
Oil inventory the last 5 years has started to rise the week ending 9/09. The 5 year average rise is 10 million barrels but that is affected by the 2011 abnormal drop in inventory. 2014 was up 15 mil. In 2013 +36 mil. 2012 +19 mil. 2011 it decreased 25 mil. 2010 +10 mil. If you throw out the high and the low then the average is 15 mil.
This year the rise started 2 weeks early. Mainly because oil input to refineries has decreased this year faster than normal from the peak.
On my iphone logged on to my options express account after my swim
around 8:00 am CL - 44.44 +0.44+ (1.00 %)
then again while walking around 9:40 am logged on - CL - 44.44 +0.44 (1.00 %)
Starting to look like a bullish flag pattern, that is probably too optimistic though. I am still holding my USO shares waiting for them to pay off LOL.