Gold is just one sign/warnig/indicator, but you can't eat gold, and put in your tank, so they should be focused on "economic goods and commodities". The real problem the Fed faces is that the only thing all their easy money (and enormous twin deficits) has caused is runaway demand in Asia for about everything
Message 19493297
and just a little inventory rebuild (that people are all excited about) at home. It hasn't done a damn thing for it's logically purpose, which was to light a fire under American wage and salary growth. I will have the DTS W&S numbers tomorrow for the past two weeks, but the preview looks par for the course, virtually flat, Y/O.
Reuters
China oil demand outpaces forecasts, imports rocket
Thursday November 13, 7:40 am ET
By Sujata Rao
LONDON, Nov 13 (Reuters) - Blistering Chinese economic growth is underpinning incremental world oil demand with China's September net crude and oil products at record highs, the International Energy Agency (IEA) said on Thursday.
"The breakneck pace of Chinese economic expansion is rapidly changing the oil demand map," the agency said in its monthly Oil Market Report.
"The Chinese economy will need to expand at torrid pace to create new jobs to be able to absorb displaced workers from inefficient and defunct state enterprises..."
The Paris-based IEA, the West's energy watchdog, estimated Chinese net imports at 2.79 million barrels per day of crude and refined products in September, up 676,000 bpd on the month.
September crude imports rose to 2.21 million bpd from August's 1.52 million bpd with products off just 10,000 bpd at 580,000 bpd.
Total net imports in the first three quarters of 2003 averaged 1.99 million bpd, up from 1.61 million bpd for all 2002.
The agency revised up its forecast for global oil demand growth in 2003 by 170,000 bpd to 1.28 million bpd, with China accounting for 90,000 bpd of the adjustment.
It pegged China's overall demand growth at 443,000 bpd or nine percent in 2003, followed at least by another 300,000 bpd or six percent growth next year.
Chinese apparent demand, defined as the sum of domestic product output and net product imports, next year will rise to 5.7 million bpd, it said. That would account for about a third of global demand growth, but the forecast had "considerable upside potential," it said.
Huge rises in factory output, a hot summer and growing car ownership in the industrial south propelled China's August oil demand to a record high and the underlying drivers of Chinese oil demand growth showed no signs of abating, it added.
"Although there are concerns about overheating, structural shifts in the Chinese economy appear to set the stage for another strong demand gain in 2004," the report said, identifying transportation, petrochemicals and power generation as the main drivers of extra consumption.
It said rising incomes, car-financing schemes, falling prices and rising imports had taken car purchases to a "fevered pitch" and set the stage for an explosion in motor fuel demand.
"Record-high increases in reported automobile sales, automobile ownership rates and the overall automobile population, coupled with aggressive road and highway building should fuel the steep gains in gasoline demand next year," the IEA said.
Rapid expansion of the Chinese petrochemical and plastics industry is also expected to keep naphtha demand growth on the boil, at least until projects to import pipeline gas and liquefied natural gas (LNG) reach fruition.
On the power generation front, exceptionally hot temperatures propelled fuel oil imports to record highs in the past summer.
This continued in September, with fuel oil imports at about 547,000 bpd, up from 500,000 bpd in August.
While demand will likely ease in the cooler months, the IEA said fuel oil consumption would inch higher next year.
"Existing power generation capacity will remain stretched in the face of fast-growing electricity demand until significant capacity additions are completed," the report said.
"Second, even if industrial output growth slows, China's construction boom, with hundreds of thousands of new air-conditioned units, has considerably raised baseline electricity demand, particularly in the peak summer cooling season."
One of the key changes to Chinese demand highlighted by the agency was the diminishing impact of cyclical and seasonal consumption patterns.
It said that until recently, increases in Chinese apparent demand tended to be cyclically offset by a subsequent period of contraction, when refiners reduced runs and imports to help the economy work off inventory builds.
"This has clearly not been the pattern in recent months," the report said, adding that even the demand dent caused by the summer outbreak of the SARS virus had been smaller than Chinese refiners had expected.
But the IEA also struck a note of caution, saying it was questionable to assume that Chinese economic growth would continue unabated.
"It is assumed that Chinese economic growth will continue into 2004 but slow down from current levels, partly in response to government measures," it said.
"At the same time we recognise that shifts in China's economy have led to structural gains in China's oil demand that even a marked slowdown in economic activity may not easily reverse." |
