China's gambit will backfireChina doesn't like high oil prices and it has decided to do something about it.
Last year, when nobody was buying oil, China filled every storage facility to the brim and then added more storage.
Now that oil prices have recovered and then some, China has decided to flex its buy-side power and draw down inventories and cut back purchases. To fortify its position, China has announced that it is ramping up coal purchases.
Way to go China.
China's strategy has been somewhat effective in the short term, as its cutbacks coupled with 4th wave fears has knocked 10% the price of oil. But, can it last? In a word, NO.
Unless China is prepared to take a huge step backwards in the development of its middle class it will have to rely upon oil or ramp up its nuclear capabilities.
I would add that surely China won't revert to coal power, but that is not a given. History has shown us that China is stubborn and patient and will go to great lengths to get what it wants.
If China does dig its heels in on coal and drags India into the fray, then we will have our answer about how utterly meaningless the effort in the west to reduce GHG has and will continue to be.