Even as the whole world seemingly is transfixed on economic recovery and what the stock indexes are up to, the 800 lb. gorilla in the room has grown to 1000 lbs.
There have been a recent spate of news articles and book reviews triangulating on the topic of Peak Oil, although none quite get to the heart of the problem, and I think it would be wise to keep the issue of oil and energy directly in view.
The first article I’d like to draw your attention to shows that, for a rapidly industrializing country, even the most destructive economic crisis in generations is not enough to halt consumption growth.
China oil demand in fastest growth in over 3 yrs
BEIJING, Oct 26 (Reuters) – China’s apparent oil demand rose 12.5 percent in September from a year earlier, the sixth rise in a row and the fastest rate since June 2006, as refiners operated at record rates amid a sustained recovery in economic activity.
However, the robust September rate, anticipated by some analysts, may have been inflated by a low base a year earlier when implied oil demand inched 2.3 percent as the global financial crisis began infiltrating into the world’s second largest oil market.
China used nearly 8.17 million barrels per day of oil last month, Reuters calculations based on official data showed on Monday, 460,000 bpd or 5.8 percent higher than August.
What we can draw from this is that when (if?) the trillions of dollars in stimulus money finally hit the real economy, the burst in oil consumption growth will run smack-dab into a resource wall that will precipitate the second wave of this crisis.