Crude Oil

[Stockolio]

I'm hardly the first person to suggest that the 3 decade period of crazy Chinese acceleration is coming to a gradual close. They have established themselves as the world's low cost manufacturer but in terms of true legitimate IP development of genuine Chinese origin they are far behind. The Communist apparatchik is hiding some ghastly realities in the real estate sector and yes they are prolific currency manipulators on a grand scale. Modern Western economies have rightly become very wary of the perils wrought with Chinese theft of intellectual property and the security compromises associated with Chinese telecommunications gear and integrated circuits.

Deglobalisation, Automation and 3D Printing is the end of China, which is what were seeing, companies have been moving out of China since 2017, they are using the Trade War theme to try and calm down there people, Chinese are very greedy in general and will snap if they start losing that spending/buying power, government knows it... Small plastic gadget stuff is being moved to Vietnam/India and shoes, clothes and electronics could be done pretty much anywhere now

https://www.gq.com/story/nike-adidas-shifting-production-asia

https://www.economist.com/business/...ech-factory-brings-production-back-to-germany

 

[bone]

Deglobalisation, Automation and 3D Printing is the end of China, which is what were seeing, companies have been moving out of China since 2017, they are using the Trade War theme to try and calm down there people, Chinese are very greedy in general and will snap if they start losing that spending/buying power, government knows it... Small plastic gadget stuff is being moved to Vietnam/India and shoes, clothes and electronics could be done pretty much anywhere now

https://www.gq.com/story/nike-adidas-shifting-production-asia

https://www.economist.com/business/...ech-factory-brings-production-back-to-germany

In the 60's and 70's Japan was the world's low cost manufacturer. But there is a big difference between the Japanese and the Chinese. Japan also has a traditionally very deep native engineering and development culture. I don't see anything close to that in China. It's become a labor and shipping arbitrage - and as you mentioned other South East Asian Countries have entered the fray.

 

[Stockolio]

Cost to produce in China has gotten higher then other countries , they forgot Capitalism has no loyalty ? China is challenging Petro Dollar, challenging US for world supremacy in general, I think the US has to strike while there weak, no trade deal and let the bleeding keep going... Trump has to make sure he rejects China's offer, not other way around, to have Xi lose face in front of his people and Russia, hopefully get kicked out/hanged from his own people, and install a democracy instead of a psychopathic Social Credit System aka Minority Report 2.0

If Iraq told the US to fuck off and refused to go back to Petro Dollar, then surely the Chinese Dictator has to refuse to submit as well, imagine how he will be seen after being known as the guy who bent over to Trump ? As crazy as it sounds, I do not think there will be a deal, I just do not see him losing his legacy and life's work as a communist to something that affects them moderately, deglobalisation is affecting them much more financially then US tariffs

 

[bone]

The Petro Yuan is pure fantasy. Never happen as long as the Communist Party apparatchik continues to devalue the Yuan through constant dollar pegging. The reality is that all real players in the hydrocarbons market still value (price) their exports in US dollars. And the Arabs insist on taking US Dollars for their oil. The dominant OTC Swaps Contracts and Futures are priced in US Dollars.

 

[AAAintheBeltway]

Looks like Crude Oil has found it's footing in concert with a firmer equity market.

Bone, good calls in this thread. Do you think the Chinese are manipulating our markets to try to undermine Trump? Their sinking markets gave Trump leverage in the trade talks.

 

[bone]

Bone, good calls in this thread. Do you think the Chinese are manipulating our markets to try to undermine Trump? Their sinking markets gave Trump leverage in the trade talks.

The Chinese play the long game, and have been manipulative and highly exploitative for the past three decades - Trump has very little to do with it IMO. Trump called bullshit, and now Apple has called bullshit. Everyone wants to pretend that the status quo is 'just fine'. The Chinese hate transparency - and Trump and Tim Cook have been shining an uncomfortable light on them to be sure. Their regional neighbors are now on high alert and are very alarmed about Chinese geopolitical ambitions. But again the Chinese have been at this for going on thirty years now.

China desperately wants worldwide respect and recognition. But the very structures that they created to rise so rapidly are now weighing them down. They became the world's low cost manufacturer - but they have very little prowess to organically develop new technologies and innovate from within. The first thing their entrepreneurs do when they make some money is they invest it overseas - often in the United States or Europe. A government organized military branch tasked with stealing IP and outright theft only takes you so far. They are slaves to the labor and shipping rates arbitrage. They desperately want the Yuan to be the de facto global currency standard - but they refuse to let it float and be traded on the world markets like the US Dollar or the Swiss Franc or the Japanese Yen. There is a huge Communist Party bureaucracy tasked with pegging the Yuan at artificially deflated rates versus the dollar.

 

[Sinbin]

I think that Canada has a pretty influential Crude Oil market. Specifically the Athabasca Oil Sands (Alberta Sands Field). Produces 80.7% of the oil for the 4th largest exporter and producer in the world. Interesting that they’re also the largest exporter to the US (43% of US imports- 3.3mil barrels a day) while their is a decent differential in price... WTI being a benchmark for the US.

There seems to be a push whenever production stands from this specific field. Just at the end of November while price was tanking, Athabasca released a small regression in production since the markets are so saturated... along with most of their production going to a country with the mindset of lowering prices. Could’ve gotten a good profit on a short-term long. Have to be in and out though. Almost scalping at that point...

Seems like sometimes people forget about Cananda lol. I know I do sometimes. Just interesting to me that there is a good shift whenever Athabasca comes out with news.


I’m also really interested to see if it reaches the $40 mark and of it does... what happens after. Could be a potential to buy then.

 

[Stockolio]

I think that Canada has a pretty influential Crude Oil market. Specifically the Athabasca Oil Sands (Alberta Sands Field). Produces 80.7% of the oil for the 4th largest exporter and producer in the world. Interesting that they’re also the largest exporter to the US (43% of US imports- 3.3mil barrels a day) while their is a decent differential in price... WTI being a benchmark for the US.
View attachment 196656
There seems to be a push whenever production stands from this specific field. Just at the end of November while price was tanking, Athabasca released a small regression in production since the markets are so saturated... along with most of their production going to a country with the mindset of lowering prices. Could’ve gotten a good profit on a short-term long. Have to be in and out though. Almost scalping at that point...

Seems like sometimes people forget about Cananda lol. I know I do sometimes. Just interesting to me that there is a good shift whenever Athabasca comes out with news.


I’m also really interested to see if it reaches the $40 mark and of it does... what happens after. Could be a potential to buy then.
View attachment 196658

Oil topped for a while in 2019, can it go slightly higher ? Of course, but with moves being made in Oil and Junk bonds, I highly doubt it... Big boys buying up all the oil and junk bond etf's at the same time of buying huge amounts of PUTs, do the math =)

The days of Supply/Demand dictating the price of Oil are long gone

 

[Handle123]

My long term commodities system only allows for longs since 2015 and when patterns exist for topping, protecting open profits via hedging is done, It has made handful attempts of adding onto long position/hedged starting in Nov 2018, if it can get up 1.50, can exit 10% of position , all at breakeven stops.

I can see the next China being Vietnam.

 

[Stockolio]

My long term commodities system only allows for longs since 2015 and when patterns exist for topping, protecting open profits via hedging is done, It has made handful attempts of adding onto long position/hedged starting in Nov 2018, if it can get up 1.50, can exit 10% of position , all at breakeven stops.

I can see the next China being Vietnam.

Yes, Vietnam and India