Peak Oil Passnotes: China Has Spoken

The market has spoken. For once the machinations of the market are being based not on herd mentality, software, technicals or the whims of the mass media. Instead the worrying thing is the moves to $100 oil are based on reality, demand. Chinese demand.

It has not mattered a jot to China as oil has risen in price. Some people might want to buy a house because they think they may make money, other people buy a house because they love someone and they want to live in the city without renting. China is the latter. China is not interested in a few billion dollars this way or that every month, it wants to live in the city called 21st century prosperity and it is going to do everything in its power to stay there. And it ain


If Chinese demand were going to slacken off it would have happened by now. But nothing of the sort is going on. Although, as we have said before here, the figures that come out of Beijing can be slightly odd, it appears Chinese demand is rising somewhere around 10 per cent per year at the moment.

The subsidies that people like Rex Tillerson of ExxonMobil hate so much are really nothing but an oily straw man. He claims the subsidies of the Chinese authorities are distorting the market, but in fact that may well be the opposite. Every time the price dips all this does is allow China to consume even more.

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