China’s still at it. Attempting to suck up every ounce of crude oil on a global basis, they are not unlike the Daniel Plainview character from There Will Be Blood, an oil magnate to whom you either leased your land or you watched as he drained the oil from it horizontally, right out from under you.
The Chinese have recently been shut down by Libya but have gotten quite a foothold in Iraq. Their African move, though, raised quite a few eyebrows this week…
The Chinese government is in a massive resource grab in Africa, which has huge ramifications for natural resource prices, not the least of which will be the cost of imported oil to the U.S., and ultimately the stock market and economy.
Beijing’s latest foray is trying to buy 6 billion barrels of oil that is already spoken for via leases to Exxon, Chevron, Royal Dutch Shell, and Total SA. The Nigerian National Petroleum Corp. presently leases 16 oil blocks on what remains of the oil industry’s dominant Seven Sisters.
The fastest growing and soon to be largest economy on earth doesn’t really care about the fact that the US and Europe are still losing jobs or that regional banks in Alabama may or may not be in trouble on some commercial real estate loans. They want more access to oil and they want it now. They are not waiting, nor can they afford to, as the chart above shows.
Oh, and it should also be noted that they will literally do business with anyone to gain access to oil rights or to development projects, including Venezuela, Russia and Iran.
In the time it took me to write this post, 25 new cars will have hit the road in Beijing (1200 new cars per day). They’re not f@ckin’ around over there, and prices of $70 a barrel, denominated in a currency that falls every day, are meaningless to them.
So why is it that we’re still asleep? And more importantly, how can we make money from this insatiable thirst that the credit crunch and global recession has done exactly nothing to slake.?