China has oil and gas trump card on US

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neverfail
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Re: "Light at the end of the tunnel" (from an oncoming express train?).

Post by neverfail » Thu May 07, 2020 11:48 pm

https://www.marketwatch.com/story/us-to ... -121035610

The U.S. is removing Patriot antimissile systems from Saudi Arabia and is considering reductions to other military capabilities, marking the end, for now, of a large-scale military buildup to counter Iran, according to U.S. officials.

The U.S. is removing four Patriot missile batteries from Saudi Arabia along with dozens of military personnel sent following a series of attacks on the Saudi oil facilities last year, according to several U.S. officials. The attacks were part of hostilities that took place over several months.

Two U.S. jet fighter squadrons also have left the region, and U.S. officials also will consider a reduction soon in the U.S. Navy presence in the Persian Gulf, the officials said. The redeployment of the Patriot systems, which now is under way, hasn’t been previously disclosed.
The excuse being offered is that Iran is no longer a threat. :lol: :| :( . The reason (as distinct from the cover story) has more likely to do with Trump's concern about the low oil price and how inadequate returns are sending America's shale oil firms broke.

The removals could well be a nefarious "waving a red rag at the bull".

With the patriot batteries removed the Saudi oil terminal facilites on The Gulf are well neigh defenceless. Imagine if Iran were to make a strike now; possibly through their surrogate in Yemen in order to destroy Saudi Arabia's oil exporting capacity.

So much crude oil will be subtracted from the global market that the world price would have to rise. US shale oil might even become cost-effective to produce again.

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cassowary
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Re: China has oil and gas trump card on US

Post by cassowary » Sat May 09, 2020 7:47 am

neverfail wrote:
Wed May 06, 2020 6:16 pm
:lol: This would be funny were it not potentially so loser-tragic. :(
https://asiatimes.com/2020/05/china-has ... ard-on-us/

China will likely withhold promised big new energy purchases if US ramps up new trade tensions

DA NANG – The Donald Trump administration is ramping up retaliatory rhetoric against China over its handling of the coronavirus crisis and its corresponding devastation, a renewed trade war threat that promises to hit US energy producers if and when China retorts in kind.

(snip)

Last month, Trump said he was considering new tariffs on Chinese goods on top of an existing 25% levy punitively imposed on some US$370 billion worth of Chinese goods. If implemented as threatened, it will be bad news for America’s already beleaguered oil and gas producers.

US producers have already been hurt by the trade war. US crude oil exports to China, the world’s largest importer, were zilch in the first quarter of this year due to trade tensions. That’s eroded hard-fought market share US producers had previously steered away from entrenched Chinese suppliers, including oil kingpins Saudi Arabia, Russia and others.

US liquefied natural gas (LNG) imports to China were also hit last year by a punitive 25% levy, throwing several US LNG project proposals into doubt due to the likely lack of long-term Chinese off-take deals. Those proposals have also been stymied by the likely lack of Chinese investment needed to reach final investment decisions (FID).

In April, China procured its first US LNG cargo since March 2019, and has signaled that as many as four more are on the way. Now, with Trump’s ramped up trade war rhetoric and anti-China messaging in his re-election campaign, those promised new LNG imports will be in jeopardy if the US leader pushes through with his new threats.

China has not indicated how it would respond to a renewed trade war push, but last year’s tit-for-tat gives some indication on the energy front. In March 2019, as trade tensions spiked, Beijing hit US LNG imports with a 10% levy, then upped that duty to a prohibitive 25%.

The tariffs strategically hit the US energy industry’s underbelly, namely its LNG sector, which is increasingly trying to compete with top producers like Australia, Qatar and others for global market share.
:lol:

What I find utterly absurd about this scenario is that the global prices of both oil and natural gas are well below production costs in the USA - and likely to remain so for years to come.

So it stands to reason that each barrel of oil exported from the US to China at a loss to producers would amount to subsidised energy provided to the PRC by the USA at cost to the latter. :lol:

(To compound their error, they now want to tie up the markets of other importing countries like Japan, South Korea, India and Vietnam with the same loss-making product.)

Luckily China has been merciful towards the USA by not insisting on deliveries from that source but has continued importing oil and LNG from alternative sources where the price is presumably far closer to production costs.

What a farcical trade war! :lol:

Wake up, you bunch of dopes! It is a buyers' market for oil and gas out there now - not a sellers' market.
It does not matter, Neverfail. If China buys from the US or elsewhere. When they buy, it will push up oil prices. The US will benefit from higher prices. Somebody else will buy US oil at a higher price. Maybe Australia?
The Imp :D

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Doc
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Re: China has oil and gas trump card on US

Post by Doc » Sat May 09, 2020 9:23 am

cassowary wrote:
Sat May 09, 2020 7:47 am
neverfail wrote:
Wed May 06, 2020 6:16 pm
:lol: This would be funny were it not potentially so loser-tragic. :(
https://asiatimes.com/2020/05/china-has ... ard-on-us/

China will likely withhold promised big new energy purchases if US ramps up new trade tensions

DA NANG – The Donald Trump administration is ramping up retaliatory rhetoric against China over its handling of the coronavirus crisis and its corresponding devastation, a renewed trade war threat that promises to hit US energy producers if and when China retorts in kind.

(snip)

Last month, Trump said he was considering new tariffs on Chinese goods on top of an existing 25% levy punitively imposed on some US$370 billion worth of Chinese goods. If implemented as threatened, it will be bad news for America’s already beleaguered oil and gas producers.

US producers have already been hurt by the trade war. US crude oil exports to China, the world’s largest importer, were zilch in the first quarter of this year due to trade tensions. That’s eroded hard-fought market share US producers had previously steered away from entrenched Chinese suppliers, including oil kingpins Saudi Arabia, Russia and others.

US liquefied natural gas (LNG) imports to China were also hit last year by a punitive 25% levy, throwing several US LNG project proposals into doubt due to the likely lack of long-term Chinese off-take deals. Those proposals have also been stymied by the likely lack of Chinese investment needed to reach final investment decisions (FID).

In April, China procured its first US LNG cargo since March 2019, and has signaled that as many as four more are on the way. Now, with Trump’s ramped up trade war rhetoric and anti-China messaging in his re-election campaign, those promised new LNG imports will be in jeopardy if the US leader pushes through with his new threats.

China has not indicated how it would respond to a renewed trade war push, but last year’s tit-for-tat gives some indication on the energy front. In March 2019, as trade tensions spiked, Beijing hit US LNG imports with a 10% levy, then upped that duty to a prohibitive 25%.

The tariffs strategically hit the US energy industry’s underbelly, namely its LNG sector, which is increasingly trying to compete with top producers like Australia, Qatar and others for global market share.
:lol:

What I find utterly absurd about this scenario is that the global prices of both oil and natural gas are well below production costs in the USA - and likely to remain so for years to come.

So it stands to reason that each barrel of oil exported from the US to China at a loss to producers would amount to subsidised energy provided to the PRC by the USA at cost to the latter. :lol:

(To compound their error, they now want to tie up the markets of other importing countries like Japan, South Korea, India and Vietnam with the same loss-making product.)

Luckily China has been merciful towards the USA by not insisting on deliveries from that source but has continued importing oil and LNG from alternative sources where the price is presumably far closer to production costs.

What a farcical trade war! :lol:

Wake up, you bunch of dopes! It is a buyers' market for oil and gas out there now - not a sellers' market.
It does not matter, Neverfail. If China buys from the US or elsewhere. When they buy, it will push up oil prices. The US will benefit from higher prices. Somebody else will buy US oil at a higher price. Maybe Australia?
Actually it does not matter as the US doesn't export that much oil.

https://www.forbes.com/sites/arielcohen ... 4e9c1a5f3b
“"I fancied myself as some kind of god....It is a sort of disease when you consider yourself some kind of god, the creator of everything, but I feel comfortable about it now since I began to live it out.” -- George Soros

neverfail
Posts: 5828
Joined: Sun Dec 18, 2016 3:47 am
Location: Singapore

Re: China has oil and gas trump card on US

Post by neverfail » Sat May 09, 2020 2:01 pm

cassowary wrote:
Sat May 09, 2020 7:47 am

It does not matter, Neverfail. If China buys from the US or elsewhere. When they buy, it will push up oil prices.


Right in theory Cass. Unfortunately China, along with the rest of the World, has slumped into recession so therefore needs less oil than before. That maintains downward pressure on prices.
cassowary wrote:
Sat May 09, 2020 7:47 am
The US will benefit from higher prices.
But NOT the US consumer/motorist. Have you forgotten about him/her?
cassowary wrote:
Sat May 09, 2020 7:47 am
Somebody else will buy US oil at a higher price. Maybe Australia?
:lol: :lol: :lol:

What about Singapore? We import around half of our needs from Singapore as petrol and other refined products. If you in Singapore wish to buy the pricey American stuff and then sell it on to us at a loss then I would like you to know that I have no objections. :D

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