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Gold/Mining/Energy : Big Dog's Boom Boom Room -- Ignore unavailable to you. Want to Upgrade?

To: Broken_Clock who wrote (41423)	4/6/2005 12:53:17 AM
From: SliderOnTheBlack	Respond to of 206121

re: ["Do you have an answer for why Exxon liquidated its China holdings?"] Papaya King: ["The only reason I can come up with is that they have inside info and are waaaay ahead of the game. Perhaps they are expecting war?"] BINGO !!!!!!!!!!!! ......we've got a Bingo on table 41423 for P'K !!! AND - In addition to the China divestitures....why isn't Big Oil ramping Cap Ex in light of $50+ forward futures - years out ? ...can anyone answer that ? Obviously Chinton had a very valid point about the paper futures market... I guess when Lee Raymond also told us that the supply/demand fundamentals did not support present Oil prices - he is also putting XOM's Cap Ex Spending (Money) where his mouth is... ? - whodathunkit-I ? And given Raymond also said that XOM was having "no problem getting all the crude oil it needed for it's refineries"... given the week, after week, after week, after week Inventory Builds - now at 5 year HIGHS...Ya be thinkin' that maybe he was right on that as well ? - whodathunkit-II ? PS: Still waiting for an answer as to how Inventory's can build to 5 year highs if ANY of the following are true: 1. Production/Supply is collapsing 2. We are in a Demand Driven "Super Spike" Cycle 3. We have a global Refining Crisis * ....all while we've been refilling the USA SPR !?!?! If you are going to be riding the Oil Bull...you'd sure as hell had better understand "why" you made your money... if you plan on retaining any of it. ..because it wasn't because of #1, 2, or 3 above. And not to bust any more PermaBull Bubbles about how resilient Chinese Oil Demand is going to be.... - here's a little BOMB !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! * CONFUSCIOUS SAY.......CURE FOR HIGH OIL PRICE - IS HIGH OIL PRICE * -------------------------------------------------------------------------------------------------------------------------------- virtueel.com China Fuel Tax its Best Weapon to Check Oil Demand China's energy planners are ready to take the bitter pill of an unpopular nationwide fuel tax to put the brakes on runaway fuel demand in the world's second-biggest oil consumer. Analysts say Beijing is likely to consider a 20-50 percent tax on retail gasoline and diesel prices, which are among the world's lowest, emulating western Europe's policy of using high taxes to promote energy conservation and protect the environment. But imposing a tax at a time of record-high oil prices could hamper key economic sectors and anger the country's hundreds of millions of farmers, consequences which may delay any imminent implementation despite a surging dependence on fuel imports. "Beijing has well realised that the level of China's energy use demands a high tax levy. It will not be imminent but will be soon -- in a year or two," said Yang Fuqiang, the Beijing chief of the US-based Energy Foundation, which assists China in formulating sustainable development policies. Analysts say China may opt to introduce the new tax in phases to allow consumers to gradually adjust to higher costs and avoid any big negative impact to business and industry. But Beijing would have to boost prices by at least 25 percent to make a perceptible dent in demand, they say. China's oil imports hit a record in 2004, making up more than 40 percent of its 6.4 million barrels per day (bpd) of demand. That dependence is set to rise to roughly 65 percent by 2020. Swelling car ownership, sharply growing transport and petrochemical sectors, and a persistent power shortage drove consumption up almost 16 percent last year. IMPORT DEPENDENCE Demand remained robust despite international crude prices soaring past $50 a barrel as Beijing kept a rigid cap on retail prices to keep inflation in check and protect consumers. The government raised retail gasoline prices last week by 7 percent, the first increase since August but viewed as too little too late to have any significant impact on demand. Analysts say China would do its best to implement a new retail tariff with prices at peak levels if it is really going to tackle its growing dependence on foreign oil. "The best time to introduce taxes is when prices are high to curb demand and promote new technologies," said a senior tax researcher at State Council, who declined to be named. Yang from the Energy Foundation said the government should be confident that the world's seventh-largest economy could prove to be more resilient than expected to absorb higher prices. "It's like you catching a cold. But it will help improve your immunity," he said. Finance Minister Jin Renqing said this month Beijing was determined to enforce the fuel tax, but the timing was crucial. "The government is worried a big jump in oil prices may slow growth in key economic sectors. They don't want to see taxi drivers go on strike and trucks blocking up highways," said Yang. NO MORE CHEAP OIL Higher fuel costs may encourage the ballooning, but minority, young middle-class to buy energy-efficient, low-emission vehicles instead of gas-guzzling sport cars. But a sharp drop in car sales would hurt the auto-making sector, one of the country's cornerstone industries and a key tax revenue source for 80 percent of Chinese provinces. A big jump in the price of diesel would raise costs at manufacturers, which ship goods from the poorer inland regions to the booming coast for export. It would also threaten stability in China's 800-million strong rural community, which uses the fuel for ploughing and irrigation. Diesel makes up a third of total Chinese oil demand, double that of gasoline. The idea of a fuel tax was initiated in 1994, when oil was below $20 a barrel, as a means of replacing road tolls. But volatile prices and issues such as how to split tax revenues among government agencies have held it up so far. "Oil prices can't possibly go back to $25 a barrel. Shall we wait forever?" said Yang Zhigang, head of tax research at the China Academy of Social Science. China levies a 17 percent value-added tax and a fixed consumption tax of 117.6 yuan ($14.2) a tonne for diesel and 277 yuan a tonne for gasoline. The consumption tax accounts for 6 percent of the retail gasoline price and 3 percent of diesel's pump rate. These are sharply below tax rates of most OECD countries at 20-70 percent, which includes VAT. Source: Reuters ------------------------------------------------------------------------------------------------------------------------------- $yonara; $lider

To: Broken_Clock who wrote (41423)	4/6/2005 5:51:11 AM
From: Bob Swift	Respond to of 206121

Papaya King, Your guess is just as good as mine. SNP is not alone in spotting a low PE, the same is true with PTR and CEO. I guess XOM and these Chinese companies have very different philosophy. XOM spends its profit buying back shares whereas the 3 Chinese companies spend their profits in securing more oil for China (the government still is the biggest shareholder), even if they have to overpaid. XOM and BP, having to report to shareholders from quarter to quarter, want no part of this. This and the fact that the Chinese government caps the price of refined petroleum products (to protect their export economy) makes SNP less desirable to most investors. However, the profit that can be had by making up low margin with volume is nothing to sneeze at. The low PE suits me just fine. If war breaks out, China cannot possibly fight without oil. China has been spending billions and billions in building the oil export pipelines in a number of countries including the XXXistans in the West and potentially in Myanmar in the South. It has also just completed a port in Pakistan. If they are willing to spend billions on the infrastructure of other countries, what is $80 oil to them ? This rush to secure oil at any cost, in fact, is the reason I believe the Chinese government will buy crudes in the next few years nonstop, i.e. until their strategic oil reserve is built up. I just don't think the world's demand for oil will slow down in the next few years.