Comments on: China’s Oil Manipulation, Gas Prices, and US Presidential Politics http://www.truthfromfacts.com/2008/05/28/chinas-oil-manipulation-gas-prices-and-us-presidential-politics/ Attacking by oblique means and stealthy feints since 2007 Mon, 14 Feb 2011 02:33:02 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Truth From Facts » China Makes Another Good Move for the Environment and International Oil Market http://www.truthfromfacts.com/2008/05/28/chinas-oil-manipulation-gas-prices-and-us-presidential-politics/comment-page-1/#comment-56 Truth From Facts » China Makes Another Good Move for the Environment and International Oil Market Thu, 19 Jun 2008 15:37:40 +0000 http://www.truthfromfacts.com/2008/05/28/chinas-oil-manipulation-gas-prices-and-us-presidential-politics/#comment-56 [...] month I brought you analysis of China’s Oil Manipulation, arguing that China’s price controls for energy is one of the reasons for the elevated [...] [...] month I brought you analysis of China’s Oil Manipulation, arguing that China’s price controls for energy is one of the reasons for the elevated [...]

]]> By: nator http://www.truthfromfacts.com/2008/05/28/chinas-oil-manipulation-gas-prices-and-us-presidential-politics/comment-page-1/#comment-49 nator Thu, 12 Jun 2008 10:39:43 +0000 http://www.truthfromfacts.com/2008/05/28/chinas-oil-manipulation-gas-prices-and-us-presidential-politics/#comment-49 SHTig, thanks for the explanation. But I still don't see why China's price controls are doing anything more than contributing--slightly--to global demand. I would imagine that manufacturing and heavy industry use a lot more oil than "Chinese consumers" (presumably automobile owners, mainly). It might be more accurate to say that Western companies who build in China, or even Western consumers who buy Chinese-made products, are the ones getting the biggest break on cheap Chinese oil, and the ones who are responsible for most of the upward pressure on global oil prices attributable this phenomenon. And I just don't think China's increased demand is doing all that much. I think it's safe to say that China's economy would be growing even with higher gas prices, and that demand for cars would be increasing as well. SHTig, thanks for the explanation. But I still don’t see why China’s price controls are doing anything more than contributing–slightly–to global demand. I would imagine that manufacturing and heavy industry use a lot more oil than “Chinese consumers” (presumably automobile owners, mainly). It might be more accurate to say that Western companies who build in China, or even Western consumers who buy Chinese-made products, are the ones getting the biggest break on cheap Chinese oil, and the ones who are responsible for most of the upward pressure on global oil prices attributable this phenomenon. And I just don’t think China’s increased demand is doing all that much. I think it’s safe to say that China’s economy would be growing even with higher gas prices, and that demand for cars would be increasing as well.

]]> By: brandonjusa http://www.truthfromfacts.com/2008/05/28/chinas-oil-manipulation-gas-prices-and-us-presidential-politics/comment-page-1/#comment-39 brandonjusa Sat, 31 May 2008 21:09:19 +0000 http://www.truthfromfacts.com/2008/05/28/chinas-oil-manipulation-gas-prices-and-us-presidential-politics/#comment-39 This article has many good points. One that I think is missing and is critical to viewing the situation correctly would be to know how much oil comes out of the ground in China. If you take in account how much money is being held by China in US dollars, you would realize that it is of greater importance to China as a nation to spend the US dollars or otherwise invest them than to sell its domestic oil to other countries which would result in growing their surplus holding of US Dollars. Now to my point. China sells it's fuel at a lower cost to Chinese people because it does spur growth and allows it's industry to continue developing at a smooth, if not quick pace. China's domestic oil is virtually free. Why? First, because it exists under China's land and secondly, the government controls what oil is allowed to be sold outside the country and what oil will be sold locally. All China has to worry about is paying the workers for pumping, processing and shipping the domestic oil all around the country. China's government will purchase oil on the open market if they need more than they have decided to use of their domestic supply. The result is a hedge of sorts against being totally dependent on world market prices of oil. China probably doesn't care much about how much higher the foreign oil is to domestic oil. They need to give people jobs so they will be busy. Busy people do not cause as much trouble as unemployed, hungry, bored people. This may affect prices outside of China as much as they add to the competition for oil in the open market, but selling that oil cheaply in their domestic market does not directly affect other countries, but allows China to remain stable and competitive with the outside world, regardless of the pollution consequences. As an American, I think this is smart policy on their account. It allows imports to remain competitive despite currency appreciation. I would hate to be a shareholder of Sinopec or PetroChina, but if you invest in the stock index in China (CSI 300) this may contribute to overall stability of your investment. I agree with George Soros when he says that policy is necessary to balance markets. This article has many good points. One that I think is missing and is critical to viewing the situation correctly would be to know how much oil comes out of the ground in China. If you take in account how much money is being held by China in US dollars, you would realize that it is of greater importance to China as a nation to spend the US dollars or otherwise invest them than to sell its domestic oil to other countries which would result in growing their surplus holding of US Dollars.

Now to my point. China sells it’s fuel at a lower cost to Chinese people because it does spur growth and allows it’s industry to continue developing at a smooth, if not quick pace. China’s domestic oil is virtually free. Why? First, because it exists under China’s land and secondly, the government controls what oil is allowed to be sold outside the country and what oil will be sold locally. All China has to worry about is paying the workers for pumping, processing and shipping the domestic oil all around the country. China’s government will purchase oil on the open market if they need more than they have decided to use of their domestic supply. The result is a hedge of sorts against being totally dependent on world market prices of oil. China probably doesn’t care much about how much higher the foreign oil is to domestic oil. They need to give people jobs so they will be busy. Busy people do not cause as much trouble as unemployed, hungry, bored people. This may affect prices outside of China as much as they add to the competition for oil in the open market, but selling that oil cheaply in their domestic market does not directly affect other countries, but allows China to remain stable and competitive with the outside world, regardless of the pollution consequences. As an American, I think this is smart policy on their account. It allows imports to remain competitive despite currency appreciation. I would hate to be a shareholder of Sinopec or PetroChina, but if you invest in the stock index in China (CSI 300) this may contribute to overall stability of your investment. I agree with George Soros when he says that policy is necessary to balance markets.

]]> By: nator http://www.truthfromfacts.com/2008/05/28/chinas-oil-manipulation-gas-prices-and-us-presidential-politics/comment-page-1/#comment-38 nator Wed, 28 May 2008 09:55:44 +0000 http://www.truthfromfacts.com/2008/05/28/chinas-oil-manipulation-gas-prices-and-us-presidential-politics/#comment-38 NATOR ASKS: SHTig, I question the connection between oil price controls in China and high prices globally. Can you explain this a bit more clearly? As I understand it, the government is paying global market prices for oil, controlling the sale price in China, <a href="http://english.tjcoc.gov.cn/htmlfiles/2008-3-21/200832192005.shtml" rel="nofollow"> paying subsidies to Sinopec and the other oil companies</a> so that they don't go bankrupt, and (presumably) funding these subsidies through taxes. So the price controls here shouldn't affect the global price beyond the slightly increased global demand created by low consumer prices in China--right? NATOR ASKS: SHTig, I question the connection between oil price controls in China and high prices globally. Can you explain this a bit more clearly? As I understand it, the government is paying global market prices for oil, controlling the sale price in China, paying subsidies to Sinopec and the other oil companies so that they don’t go bankrupt, and (presumably) funding these subsidies through taxes. So the price controls here shouldn’t affect the global price beyond the slightly increased global demand created by low consumer prices in China–right?

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