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Tug of war continues
Yes, the tug of war between optimists and pessimists continued last week, at issue? whether or not we’re in a global economic recovery. Seems to depend on who you listen to.
The market is closely watching every move by the third largest economy China. As they are apparently leading the world out of this debilitating recession. The NYMEX traders were hypnotized by the announced 8.7% stellar economic growth China achieved in 2009 and forecasts for possibly double digit advances in 2010.
These HUGE growth numbers compared to at best 3% growth forecast for the G-7 nations this year would mean China's growing appetite for all commodities including oil would dramatically increase. Energy prices were ready to take off. The energy market's euphoria was cooled quickly when the Chinese government suddenly announced credit restrictions and instructed banks to discontinue the practice of loaning to anyone who had a pulse for the balance of January.
Why is the Chinese government announcing credit restrictions? And, what will it mean to commodity demands and the global recover?
By: Roger McKnight, Senior Petroleum Advisor
Find out in this week’s Energy Report. Subscribe by sending your email to: info@en-pro.com.