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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: NOW who wrote (21899)	1/21/2005 12:18:21 AM
From: mishedlo	Read Replies (2) \| Respond to of 116555

Oil halts price slide, China's crude imports surge Friday, January 21, 2005 3:22:07 AM reuters.com SINGAPORE, Jan 21 (Reuters) - Oil prices ticked higher on Friday, stemming heavy losses this week, with a bout of cold weather in the United States expected to keep up demand for heating fuels over the weekend. U.S. light crude <CLc1> climbed 13 cents to $47.44 a barrel. "There are two opposing forces at work. Short-term fundamentals are not strong in the United States as evidenced by this week's stocks data, but the Iraq election and OPEC's meeting at the end of the month is keeping the market from selling off," said Tony Nunan at Mitsubishi Corp. in Tokyo. Prices have fallen from levels close to $50 a barrel this week after U.S. government data showed a rise in fuel supplies in the world's biggest consumer at a time when inventories usually decline at the coldest point of winter. But worries of an escalation in sabotage attacks on Iraq's oil industry ahead of Jan. 30 elections and continued supply hitches across the globe have limited the losses. "In the medium to longer term we should still be bullish. Demand is steamrolling ahead in China and overall petroleum demand in the U.S. looks strong," Nunan said. Customs data released on Friday showed China's crude imports hit a record 12.1 million tonnes in December, sending total 2004 imports to 122.7 million tonnes, a rise of almost 35 percent from last year. Sharply higher oil demand in China, now the world's second biggest consumer, was partly behind the surge in oil prices last year to an all-time peak above $55 a barrel. "We should expect record import volumes from China every month. Demand growth is slowing but is still growing faster than domestic production," said Gordon Kwan, director of oil and gas research at CLSA in Hong Kong. OPEC SHIPMENTS DROP Crude prices are up 9 percent since the start of the year, with only nine days until the Iraqi elections, which dealers fear could spur further attacks on the country's oil infrastructure. Sabotage on Iraq's northern pipeline was expected to keep oil exports through Turkey at a standstill for another two to three weeks, an Iraqi oil official said on Wednesday. Iraq's southern exports of 1.5 million barrels per day (bpd) have been mostly spared the attacks that have paralysed northern supplies. Any additional disruption to Iraqi exports would add to pressure on the global supply chain, which has already seen outages in Nigeria, Norway's North Sea, the Gulf of Mexico and Canada. Shipments from the OPEC producers' cartel, which controls more than half of global exports, have also fallen in line with the group's pact last month to reduce excess supplies by 1 million bpd from Jan. 1. OPEC oil to be shipped in the four weeks ending Feb. 5 sank by 650,000 bpd, marking the biggest drop since April, a shipping analyst said on Thursday. The Organisation of the Petroleum Exporting Countries meets on Jan. 30 to discuss whether it needs to cut supplies further ahead of the second quarter, when winter demand ebbs. But prices are some way above the $40 target that some members recently mooted as a possible new price floor. The International Energy Agency's executive director, Claude Mandil, told Reuters that OPEC should refrain from more output cuts. "They don't have to be afraid of high stocks ... Prices are high compared to last year and there's still a lot of uncertainty," Mandil said.

To: NOW who wrote (21899)	1/21/2005 9:34:43 AM
From: Tommaso	Read Replies (1) \| Respond to of 116555

>>>"The word "deflation" as used in the past has always implied a general decline of prices of all goods and commodities, real estate, wages--everything" Really?<<< Yes. There has been no period of real deflation since 1933. Just fluctuating inflation and disinflation. The PPI and the CPI have done nothing but rise erratically over the last 70 years. By way of contrast, in the United States, general price levels fell steadily for more than fifty years following the Civil War, as the country gradually resumed a complete gold standard and retired the "greenbacks."