Oil Demand Signals Flashing Red
It was to be expected that the trade war between the US and China will serve as a handy excuse for all kinds of developments that are only superficially related to it. China was a bubble for many years and China also had purchased a lot of raw commodity abroad in order to keep feeding the bubble. Its ghost city construction business plus OBOR are just manifestations of this. Much of the oil that is imported underpinned such “work policy” based projects plus there must also have been a worry that the world might perceive China as being a problem if they don’t continue buying oil. So they built tanks, lots of tanks. Kills two objectives – lots of new construction plus you can store up the oil. Oil that’s not needed but less oil purchase means lower growth and that cant be. But now, the trade war allows China to lower growth officially as this is not the fault of Chinas establishment but rather of external factors. Neat …
Oil demand is shriveling as the trade war between the U.S. and China trips up the global economy. Estimates for March and April are pointing to year-on-year declines in regions that account for almost half of global oil demand, according to Morgan Stanley. Indicators including the profit from making plastics have been sinking while refining margins in Europe recently hit multiyear lows.
