The U.S. Is Weakening And China Will Determine The Future of Oil
On Monday the United Nations Security Council adopted a sanctions against North Korea nuclear test. It is reported that the sanctions set an upper limit of 2 million barrels a year of exports to North Korea, while crude oil exports to North Korea is set at current levels. But the most notable thing, which is also the "core" part of the sanction, is that the "oil embargo", which was previously hailed by the United States, did not appear in the sanctions list! Instead, it has become "oil restriction". According to AFP, to ensure the support from China and Russia, Washington's demands for a full oil embargo were compromised. It is not hard to see from the sanctions that oil is in the hands of the United States as a means of manipulation again. But the compromise of US oil sanction also reflects the China's influence is strengthening. The sanction, meanwhile, corroborate the oil industry's two laws: * America is weakening! China is strengthening!
American control is weakening
For some time, international oil trading has been a shadow of the United States. America tries its best to manipulate the oil. The typical and effective way for the United States to control oil is to manipulate the dollar. But today, the dollar is obviously not able to do the job. On September 11th, the Xinhua News Agency reported that, in September, the international foreign exchange market had the scenery that the dollar is weak, the RMB, the euro, the yen, and the Australian dollar and other non-us currencies have broken a rise against the dollar. Mizuho Bank says it is predicted that the dollar's decline is to be continued. The immediate consequences of the dollar's decline have caused some developing countries which cannot bear this situation abandoning the dollar. On September 7th, President of Venezuelan Nicolas Maduro said they would try to get rid of the dollar from next week, using the weakest of the two official exchange rates and a basket of currencies. In addition to the dollar, America's control on oil producing countries is weakening.
China is strengthening
On September 8th, Ministry vice-minister Xin Guobin gave a speech at an industry forum. He said some countries have formulated a timetable about stopping producing and selling traditional fuel vehicle. Now the ministry has launched the related research, and will also jointly with relevant departments to develop our country's schedule. These measures will promote the development of China's automobile industry conditions and dynamic profound changes definitely. When the news came out, it was like a bamboo shoot, brush the screen of people in the industry over and over again as fast as possible. Besides that, foreign media are also racing to forward. Without exception, the major content is that the world's largest consumer of cars is driving a revolution in fuel cars. The news has an indirect impact on international oil prices. It is widely believed in the industry that China will determine the future of oil.
Finally, relations between China and Russia which is the oil tycoon, and the European Union have become tighter and closer, which will reinforce China's voice in the oil industry. It is reported that China Huaxin Energy is the third largest shareholder of Rosneft. It is also reported that German Chancellor Angela Merkel will likely to win election on September 24th. The reason is that Chancellor Merkel is concerned about China. According to the data, China has become Germany's largest trading partner by the end of 2016,.
From this we can see that China will determine the future of oil!
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