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The death of fracking? June 30, 2019

Posted by hslu in 特朗普, 石油, Energy, Global Affair, Global Warming, Oil, Trump, US Government, 川普.
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NASA just made a stunning discovery about how fracking fuels global warming – ThinkProgress

http://flip.it/oNDl9z

If enough Democratic presidential candidates make this a campaign issue it might just be enough to put an end to America’s growing oil productions from fracking.

Afterall, we are talking about NASA here.

If methane production from fracking isn’t curtailed, summer will get hotter, winter will get colder and human will have no place to hide from the wrath of the mother nature.

Well, with Trump in the WH and with many Republicans and Fox News viewers denying the study results and the connection between methane and the rise of global temperature, America will be responsible for another catastrophy just around the corner.

In 2009, America and American elites took the world for suckers and the world body didn’t do anything to punish the U.S. government.

This time around, shouldn’t something be done to make the guilty party pay and punish the guilty ones?

The end of dollar hegemony is near August 27, 2018

Posted by hslu in China, 石油, 美國, Economics, Energy, Oil, Russia, Trade, Trump, U.S. dollar, 川普, 中國.
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Source: Yahoo News

.

http://flip.it/DMljla

The unintended consequence of U.S. sanctions against Russia, Iran, Turkey, China and many other countries, companies and individuals in the world is the rise of Renminbi as an alternative to U.S. dollar in global trades.

The U.S. sanctions forced these nations to come up with a new “SWIFT” system to move money without the use of the current SWIFT network which is controlled by the America.

Trump initiated the sanctions against the world and China’s currency received wider acceptance.

因果報應啊。

Another thing which reduces the global demand of the U.S. currency is, strangely enough, the rise of the shale oil production in the U.S. As America produces more from tight formations, oil imports from foreign countries is reduced by as much as 6 million barrels every day. At roughly $70 per barrel for WTI, that’s a reduction of $420 million of U.S. dollar in global commodity trades every day.

And what might be the consequence of that? It is hard to say now but it will happen when people are least expected.

It’s only fair to retaliate June 11, 2018

Posted by hslu in 特朗普, 石油, 美國, Economics, Energy, Trump, U.S. Foreign Policy.
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https://www.yahoo.com/newsroom/vibes/white-house/v-dd114874-7083-393e-8bf1-0ac1f74868c1_c-32d03981-e37a-3a14-bd3d-53e003c70c99_a-32d03981-e37a-3a14-bd3d-53e003c70c99

Since Trump unilaterally stabbed Canada in the back first, Canada has to retaliate. Now that Trump was humiliated by Trudeau, Trudeau has risen in ranks to became Trump’s public enemy number 1.

Since this was seen as an unforgivable sin by Trumpright before he meets Kim tomorrow, he immediately sent in 2 attacking dogs to ripped Trudeau apart and warned him of serious consequences to come. More tarrif against Canada is coming and it will be more severe than the one on the table now.

Our family was in Canada for a year and half in the late 80’s. I sensed a little resentment from my Canadian colleagues because I came from the U.S. My salary was nearly 50% higher than my counterpart in Canada because our salaries were the same in figures but I got paid in USD while they got paid in loonies. At that time, one Canadian loonie was worth 68 cents USD.

I eventually won them over by hard work and by completely blending myself into the project team. My original one year contract got extended to a year and half. Finally my manager called me back to the U.S. because he couldn’t afford the extra cost associated with Canadian tax and extra bonuses for working in a foreign country. Canadians don’t like the U.S. at all because Canada was poorer, its economy was controlled byAmerican economy and, worst of them all, Canadians didn’t get any respect from Americans. For that, Canadians hated the U.S. And I have all the reasons in the world to believe that that sentiment hasn’t changed at all.

Canada will fight Trump with all they have even though they will pay for it with higher prices and escalating inflation in years to come. I support Canada and wish them go all the way to fight Trump.

By working with China and sell more crude oil to them, maybe?

Petroyuan? March 30, 2018

Posted by hslu in China, 石油, Economics, Energy, Renminbi, U.S. dollar, 中國.
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A major step to increase the circulation of renminbi in a big way.

Structural Shift February 10, 2018

Posted by hslu in Congress, 特朗普, 石油, 美國, Debt and deficit, Economics, Election, Energy, Stocks, Taxes, Trump, U.S. dollar, 川普.
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What structural shift are we talking about?

The “structural” part of the shift is the fundamental change of the economy bought to you by none other than Trump and the Republicans. While we are at it, let’s add the inept Democrats to that bunch too because they are equally guilty for acting like a whole bunch of chickens without heads.

In a growing U.S. economy and the synchronized recovery of the world economies, as well as almost full employment of around 4% in the U.S., Trump and the Republicans passed “the biggest tax reforms in American history according to Trump ” without finding a way to pay for the massive tax cut for the riches. It simply is insane because of significant damages it will eventually bring to the masses.

Why did they do it?

Because the mid-term election is coming in 11 months. They congressional Republicans are fearful of losing their congressional seats and the majority of both houses.

The structural change is what the financial market is reacting to this week when the Dow took a fast elevator down to the basement of the correction territory: the dreaded inflation is just around the corner as indicated by the chart below.

Source: Federal Reserve

The tax cut at full employment doesn’t make economic sense because it clearly is inflationary. The bond market knows it because a massive amount of federal government borrowing in the amount of additional $500 billion a year will hit the Bond market soon.

The stock market is equally uncomfortable with the higher rate environment and crumbles under the weight of extended valuation.

The structural shift is important for the financial market at this juncture because a re-pricing of all financial instruments will take place in the months and quarters ahead.

Treasury and corporate bonds will drop. Stock market will correct to bring its valuation to a reasonable level. High yield bonds will tank. Housing prices will drop as mortgage loans demands wane. Commodity prices will decrease as US dollar strengthens. Interest payments on US national debt will rise as deficit grows to ~$1 trillion annually, or about 5% of the US GDP.

In short, the structural shift will shrink personal wealth as inflation bites.

Trading oil futures with Renminbi January 7, 2018

Posted by hslu in 石油, 美國, Energy, Renminbi.
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It is about to happen because the Shanghai International Energy Exchange (INE) 上海國際能源交易中心 will soon open to take your renminbi in exchange for energy future contracts.

https://www.bloomberg.com/news/articles/2018-01-01/how-china-will-shake-up-the-oil-futures-market-quicktake-q-a

Foreign traders are welcome because INE is registered in a pilot free trade zone in Pudong, Shanghai where foreign financial companies can set up their branches there. The headquarter of INE is 5 miles from my Pudong apartment near the Lujiazui financial district. I shall pay it a visit in time.

Crude oil, natural gas, and petrochemical products can be traded there.

Will the foreign energy traders come? I don’t know because China has capital flow restrictions but these restrictions may be less stringent in the pilot free trade zone for both the foreign companies and locals working with foreign institutions.

Will renminbi replaces US dollar as the dominant petro currency?

Probably not anytime soon giving the closer tie between Saudi Arabia and U.S. right now. However, with U.S. shale oil productions fixing to rise, thus reducing oil imports, as oil trades firmly above $50 a barrel and as Chinese economy grows, Saudi has to compete with Russia and other oil exporters to sell its oil to the Middle Kingdom. It is a given that China will insist on using renminbi to settle energy contracts on INE.

Will Saudi take renminbi for its oil? It probably has to.

Source: Bloomberg

 

 

Soon, financial institutions and national oil companies around the world will increase their renminbi reserves if they haven’t done so already to deal with China in the lucrative energy sector.

Next time when we visit Shanghai, we will check the INE out.

 

Mohammed bin Salman, Saudi Arabia, Iran and oil December 15, 2017

Posted by hslu in China, 石油, 美國, Energy, Global Affair, Islam, Middle East, Military, Oil, Putin, Trump, U.S. Foreign Policy, 川普, 中國.
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Mohammed bin Salman’s ill-advised ventures have weakened Saudi Arabia’s position in the world

http://flip.it/93wubN

The failed policies of Mohammed bin Salman, the growing influence of Iran and the formation of Shia cresent are the primary reason that WTI is trading above $55 a barrel and Brent crude at $63 a barrel. A 20% war premium has been added to the price of crude oil contracts since November. It has gained more than 30% since the low achieved in late June of this year.

Saudi Arabia has been fighting a proxy war with Iran via Yemen for 2 years with little but many dead Yemenis to show for. Saudi’s oil infrastructure is now under external threat from Yemen which will keep the price of Brent crude at an elevated level. 

US shale oil production is expected to rise because WTI is trading at a few dollars below $60/barrel. However, since US exports very little of its oil, the spread between WTI and Brent crude will widen.

Source: CNBC

Source: CNBC

With WTI comfortably trading above $45 a barrel, roughly the average price of WTI for the past three years, oil company stocks should see a nice rebound in 2018. If the tension between Saudi and Iran flares up further, oil companies should see more upside too. 

With an young and inexperienced prince in Rydah colluding with a dotard and impulsive Trump in the WH, giant mistakes will continue to happen.

It is bad for the world.

It is good for China and it will be great for the US oil companies.

Putin is smiling too.

Trump and Mohammed bin Salman November 19, 2017

Posted by hslu in 石油, 美國, Energy, Global Affair, Islam, Middle East, Muslim, Obama, Taiwan, Taxes, Trump, U.S. Foreign Policy, 川普.
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Trump has unleashed the Saudi Arabia we always wanted — and feared

http://flip.it/nNbGLY

Trump’s first foreign trip after his inauguration was to Saudi Arabia. 

Why?

What did his advisors tell him? 

What would he gain by talking to Mohammed bin Salman other than undo what Obama did to the Middle East before him?

Did he really think that he can make his mark in history with peace agreements between the enemies in the Middle East?

Did he try to lend legitimacy to a young and untested Saudi prince who requested the meeting in the first place?

Did Trump believe that Saudi Arabia might be on the cusp of forming an alliance with Russia to dominate the world oil market?

Did Trump want to tell the prince in person that America will no longer insert itself in any future Middle East conflict because Saudi is a big boy who should handle itself like a grown man instead of hiding behind the U.S.?

Did Trump just want to be bold,  unpredictable and keep people guessing?

Or mabe Trump want to check out Saudi’s golden toilet?

BBC News: The end of the Anglo-American order? July 6, 2017

Posted by hslu in China, Cold War, Economics, Energy, Global Affair, Globlization, Middle East, Oil, Shanghai, U.S. Foreign Policy.
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I saw this on the BBC and thought you should see it:

The end of the Anglo-American order? – http://www.bbc.co.uk/news/world-us-canada-40227270

With China being the largest crude oil importer in the world, with Renminbi being accepted by central banks as a reserve currency and with Saudi Arabia and some OPEC countries don’t like what America is doing in the Middle East, is it likely that we will soon see crude oil being traded at Renminbi instead of the U.S. dollar? 

Of course I am not talking about all oil trades will be settled on Renminbi but what about bi-lateral oil trades between Saudi and China and Nigeria and China. You know which side Rusdia stands on this. 

The Renminbi bilateral swap lines between China and 33 (wiki data) other countries will be replaced with a new trading platform next year. In the past, these swaps were cleared by SWIFT which is under America’s influence. The new platform will be under China’s control and will be located in Shanghai away from SWIFT.

The world order is fast changing in front of our eyes if you care to look.

Article: Trump to abandon millions of high-wage jobs to China January 8, 2017

Posted by hslu in China, Economics, Energy, Oil.
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Trump to abandon millions of high-wage jobs to China

http://flip.it/-A5CnG

Well, in a way, China has no other option but to go renewables in a grand scale to clean its air and environment. It is also a good way to reduce China’s dependence on foreign oil. China’s market on renewable is so huge that China doesn’t need anyone else to make it to work. 

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