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SNP has gotten hammered since it peaked last October. A lot of potential but definitely a long term play. Good luck!

Until now Chinese govt. has subsidized the cost of oil. They have dictated pricing. Refineries and state oil companies hurt. We are talking about a Communist state with all the inefficiencies that by its very nature brings. Subsidies will soon either greatly diminish or end. Maybe consumption will drastically fall?

Chinese consumption may soon drastically decrease. If you are betting on great near term increases in oil consumption it is a very risky bet.



Pablo

I can't see them cutting their subsides. China wants to be a super power, and if it retreats back to pre-Mao days, that will disappear. The minimal consumption change that i will decrease during the Olympics is very low. Even a few years ago when fewer people owned cars there, they were still using a lot of oil, to power the corporate transportation(most employees are shuttled to from their apartments to the plant via a corporate bus) Prior most employees either lived above or next to their employer(as all housing is provided by the employer); nowadays it's becoming more of reverse suburban concept - living in the cities, and being bussed to the outlying plants.

there will be no great near term increase, but it will be steady increase. the amount of cars on the street has increased greatly over the past 3 yrars, I believe they are about to pass the US on the # of new cars purchased per year. Plus they're changing from buicks and chery's to bmw and audis. they will continue to consume more.

btw, I work 1/3 of the year in China, and have been for 3+ years. I'm well aware of their inefficiencies, and how people forget about them as being a communist state.

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Many economic factors come into play. The Yuan is pegged to the dollar. The world economy is slowing. China's strategic oil reserve is the lowest of any industrial country as they can't now afford the very oil they are subsidizing. Continued subsidies cause rampant inflation. Currency reserves (mostly dollars) have greatly depreciated in value. The managed economy of China will contract and stay beaten down for a long while. Only question is when. Today's political expediency ='s tomorrows economic disaster. For affirmation look at Japan.