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Faling Oil Prices dent Chavez clout & Programs

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This topic contains 7 replies, has 2 voices, and was last updated by  Charles Randall 14 years, 4 months ago.

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  • #3368

    Charles Randall

    Falling oil prices dent Hugo Chvez’s clout
    With oil prices down by half since July, the Venezuelan leader’s largess may dry up.
    By Sara Miller Llana | Staff writer of The Christian Science Monitor
    from the October 20, 2008 edition
    Mexico City – Sixteen months ago, Venezuelan President Hugo Chvez visited Nicaragua to lay the ceremonial cornerstone to a new $3.9 billion oil refinery to help “liberate” Nicaragua from poverty.
    Today, the cornerstone, outside the city of Len, sits among weeds. And with the price of oil 55 percent less than its peak in July, many Nicaraguans are starting to wonder if it will ever amount to more than a mere brick. “Countries like Nicaragua will no longer receive the largess that [Mr. Chvez] promised, including the oil refinery,” says Nicaraguan lawmaker Francisco Aguirre.
    The Organization of Petroleum Exporting Countries (OPEC) is expected to announce this week that it is cutting oil output to help lift crude prices. Of the dozen countries in the oil cartel – who all have benefited greatly from the high prices of the past few years – few have spread their largess to political friends as much as Chvez.
    With crude reaching $145 a barrel this year, the leftist leader has been able to pour billions into social programs at home and lavish the rest abroad, sending subsidized oil from Nicaragua to New York – including up to 100,000 barrels of oil per day to Cuba, discounted by as much as 40 percent – and making pledges to invest in infrastructure, refineries, and agricultural programs everywhere in between.
    Now that lower prices are a new norm, at $71.85 a barrel Friday, the clout such largess has earned him could begin to wane. Commodities prices overall are slipping, generating new concern in a region heavily vested in exports of soy, copper, and crude. But it is Chvez who could stand the most to lose: a new report from Deutsche Bank says that Venezuela needs prices to stay at $95 a barrel in order to balance its budget.
    Coupled with production declines, Chvez’s days as the ultimate benefactor could be coming to a close.
    “In terms of revenue and oil dependence, Venezuela is by far the most vulnerable,” says Ramon Espinasa, a former chief economist at Venezuela’s state-company Petroleos de Venezuela (PDVSA) and today an energy adviser for the Inter-American Development Bank. “It’s not just prices falling but volumes are down, which compounds the drop in revenue. That’s scary.”
    Oil income represents more than half of Venezuela’s federal budget and more than 90 percent of export earnings. With oil wealth, Chvez has poured billions into his social “missions,” which provide services such as healthcare and literacy programs for the poor.
    Spending on social programs, according to government figures, has increased from 8.2 percent of gross domestic product in 1998 to 13.6 percent in 2006. PDVSA contributed another $13 billion in 2006, or another 7.3 percent of GDP.
    Domestic spending is likely to remain stable for now, but Chvez’s “Bolivarian Revolution” abroad – via subsistence programs like Petrocaribe and the Bolivarian Alternative for the Americas (ALBA) – would probably be retooled, says RoseAnne Franco, lead analyst at PFC Energy in Washington.
    Chvez sends 300,000 barrels of oil daily at subsidized rates to needy countries in the region. Heating oil in the US and cut-rate fuel for London’s buses have also been gifted.
    Recently, President Manuel Zelaya of Honduras, who signed onto Petrocaribe and more recently ALBA, says that Chvez pledged $300 million a year for agriculture and other programs.
    Any investments in countries like Ecuador and Nicaragua, or helping the Bolivian oil company, it’s likely you won’t see those move forward,” says Ms. Franco. “If [Chvez] is under pressure [his government] will focus on the domestic.”
    Of all OPEC countries, it is Venezuela that is most vulnerable in the face of lower oil prices, says Franco. That is because Venezuela so heavily relies on imports, including for most of its food needs.
    PFC Energy published a report earlier this year saying that for 2008 oil had to stay at $94 a barrel and at $97 next year for Venezuela to finance the imports of goods and services, one macroeconomic indicator.
    Chvez has maintained that the Venezuelan government is in good shape, and the government has denied rumors that a currency devaluation and increased taxes or tax hikes loom. “Many people want oil to keep falling so they can see us fall, but Venezuela won’t sink,” Chvez recently told a state-run media outlet.
    Venezuela has $39 billion in foreign reserves. (The Venezuelan government also has money in a “rainy day” fund, which PFC Energy estimates is another $14 billion.) But some in Caracas express concern. “I am worried about the political and social problems it will bring,” says Alejandro Ovalles, an orange juice vendor in downtown Caracas. “We all depend on oil.”
    Production in Venezuela has slipped, too, from 3.1 million barrels a day in 1999 to 2.6 million barrels daily last year, according to the Energy Information Administration.
    And Chvez spends the money just as quickly as he earns it, says Ian Vsquez, director of the Center for Global Liberty and Prosperity at the Cato Institute, a libertarian think tank in Washington. “When you have an economic situation that depends on wealth distribution rather than wealth creation you expose yourself to being in a very precarious situation,” he says.
    For now, no one expects any immediate shock. “Right now, [with oil prices at $70], nothing happens. Below $65, that could change. But in the short term, there’s no effect,” says Luis Pedro Espana, director of Project on Poverty and an economics professor at Andrs Bello Catholic University in Caracas. “Part of the bonanza is in state banks and in international reserves. The government would not feel a recession in the short term.”
    If the situation does turn into a long-term readjustment for Venezuela, Mr. Espinasa says it could be a political blow. But the impact will be one of perception rather than real pullback, he says, adding that much of what Chvez has pledged has amounted to no more than promises.
    That is a sentiment expressed in Nicaragua. “It’s hard to say what impact a reduction in aid could cost the economy,” says Mr. Aguirre, the president of Nicaragua’s congressional budget commission. “For starters, we never knew how much aid Nicaragua received from Venezuela or what it was used for.”

    . Tim Rogers contributed from Nicaragua and Jos Orozco from Venezuela.

  • #6508

    Charles Randall

    Here is update on the Falling Oil prices mean to Venezuela & Chavez social programs and the dual impacts on revenue from reduced volume & price of crude oil exports.  And it couldn’t happen to a more deserving guy!
    The drop from $147-100/Bbl has put a lot of projects in financially troubled L. America countries in a great deal of doubt. The same of course will be true for other financial or credit troubled countries like Cuba & Argentina refinery projects.
    And the article indicates other projects underway & current Venezuelan/Chavez largess are already in trouble below the $92-95/Bbl that the Deutsche bank estimates Chavez needs to balance his budget for its import of goods & services, export subsidized oil and for current social programs / refinery projects.
    The article mentions that additional pressures are not likely to be felt until the current $70/Bbl falls below $65/Bbl. My past estimates put a price tag of $52/Bbl just for Chavez to finance social programs within Venezuela and that is without the cost needed to keep capacity from dropping off as it has during the last 4 years.

  • #6507

    Charles Randall

    3 oil countries face a reckoning
    By Simon Romero, Michael Slackman & Clifford J. Levy
    Published October 21, 2008  NY Times

    A pipeline in one of Gazprom’s newest and largest oil fields.
    (James Hill for The New York Times )

    CARACAS, Venezuela: As the price of oil roared to ever higher levels in recent years, the leaders of Venezuela, Iran and Russia muscled their way onto the world stage, using checkbook diplomacy and, on occasion, intimidation.
    Now, plummeting oil prices are raising questions about whether the countries can sustain their spending – and their bids to challenge United States hegemony. For all three nations, oil money was a means to an ideological end.
    President Hugo Chvez of Venezuela used it to jump-start a socialist-inspired revolution in his country and to back a cadre of like-minded leaders in Latin America who were intent on eroding once-dominant American influence.
    Iran extended its influence across the Middle East, promoted itself as the leader of the Islamic world and used its petrodollars to help defy the West’s efforts to block its nuclear program.
    Russia, which suffered a humiliating economic collapse in the 1990s after the fall of communism, recaptured some of its former standing in the world. It began rebuilding its military, wrested control of oil and gas pipelines and pushed back against Western encroachment in the former Soviet empire.
    But such ambitions are harder to finance when oil is at $74.25 a barrel, its closing price Monday in New York, than when it is at $147, its price as recently as three months ago.
    That is not to say that any of the countries is facing immediate economic disaster or will abandon long-held political goals. And the price of oil, still double what was considered high just a few years ago, could always shoot back up.
    Still, Russia, Iran and Venezuela have all based their spending on oil prices they thought were conservative but are now close to the market level. Significant further drops could tip the three countries into deficit spending or at least force them to choose among priorities. A worldwide recession, which many economists say is likely, would worsen matters, dampening energy demand and holding down prices.
    It is not clear whether the new pressures could create opportunities for the United States to ease tensions, or whether the three countries’ leaders will rely more on angry words even if they cannot afford provocative actions. Chvez has continued his overtures to Russia. He, Prime Minister Vladimir Putin of Russia and President Mahmoud Ahmadinejad of Iran may now see the United States, hobbled by financial crisis, as even more vulnerable.
    Daniel Yergin, chairman of Cambridge Energy Research Associates, a consulting firm in Cambridge, Massachusetts, said oil states were facing something of a reckoning. Originally, he said, they saw the economic crisis as a problem mainly for the United States – but then oil prices went into free fall.
    “Now, the producers are experiencing a reverse oil shock,” Yergin said. “As revenue went up, government spending went up and expectations of a continuing windfall led to greater and greater ambitions. Now they are finding how integrated they are into this globalized world.”

    Chvez was emphatic last month when he announced that Venezuela would engage in naval exercises with the Russian Navy in the Caribbean. “Go ahead and squeal, Yanquis,” he said. “Russia’s naval fleet is welcome here.”
    The moment, made possible in part by a flood of petrodollars used to buy Russian weaponry, must have been sweet for a man who has spent his presidency wagging his finger at the United States and railing against its capitalist model. Cozying up to Russia, whose leaders have been increasingly at odds with the United States, evoked cold war rivalries in the hemisphere.
    Chvez has also used his oil money – in direct payments and through subsidized oil shipments – to win friends in the hemisphere and elsewhere, including President Evo Morales of Bolivia, who expelled the United States ambassador in La Paz last month, saying the envoy was involved in plotting a coup.
    Domestic spending in Venezuela has also surged, through the creation of a wide array of social welfare programs that furthered Chvez’s goal of building a socialist-inspired state – and suppressed opposition. The 2009 budget, based on $60-a-barrel oil, includes a 23 percent increase in government spending, to $78.9 billion.
    At $140 a barrel for oil, that was conservative. With prices now uncomfortably close to $60 a barrel, economists in Venezuela are expressing alarm over the government’s ability to pay its bills, including those for arms purchases. Venezuelans are already struggling with an inflation rate of 36 percent, one of the highest in the world.
    Chvez said on Saturday that the country could endure any oil price decline, citing its $40 billion in foreign currency reserves, though he then qualified his remarks by saying that oil prices at $80 to $90 a barrel would be sufficient for his plans.
    Still, fears of an impending economic crisis in Venezuela are increasing because of a lack of transparency in public finances and because the economy has grown far more dependent on oil in the decade Chvez has been in power, with seizures of rural estates weakening agricultural output and nationalizations scaring away foreign investors.
    “This country will be paralyzed because it is so dependent on petroleum,” said Oscar Garca Mendoza, president of Banco Venezolano de Credito, a private bank.
    Anxiety over the economy already helped lead to a sell-off of Venezuelan government bonds, sharply limiting the country’s borrowing options.
    Last week, Venezuela’s embassy in Nicaragua said the Caracas government would postpone construction of a $4 billion oil refinery there. And the national oil company announced that it would tighten the terms for subsidizing oil exports to some Caribbean countries.
    “We’re in the same situation of people who have lost a limb but can still feel it,” said Ricardo Hausmann, a Venezuelan economist who teaches at Harvard University. “I don’t know how long it will take for Chvez to realize he’s lost a limb.”

    When President Ahmadinejad presented his budget to Parliament in 2007, the United Nations Security Council had already imposed economic sanctions on Iran because of its nuclear program. The president said it did not matter.
    “Even if they issue 10 more such resolutions,” he said, “it will not affect Iran’s economy and politics.”
    He was partly right. It hardly affected Iran’s politics. There was another resolution two months later, and another a year later – and still, Iran augmented its nuclear program, even as its economy was squeezed.
    One of the main reasons it was able to endure the economic punishment was the price of oil. Iran has the second largest known oil reserves in the world, and it has used them in the past four years as a political and economic weapon to defy and undermine the West while promoting its own agenda.
    Oil money helped Iran spread its influence in Iraq. Oil money helped it challenge Arab political dominance in the Middle East. Oil money helped spread its influence in Lebanon, through Hezbollah, and in the Israeli-Palestinian conflict, through Hamas.
    At home, oil money allowed Iran’s ideological hard-liners to preserve their monopoly on power, to buy political allegiances and to offset the fiscal damage of their economic policies. All that may now have to be recalibrated.
    “The drop in oil prices will make the Iranian regime re-examine its calculations because its political immunity is less,” said Mustafa El-Labbad, director of the East Center for Regional and Strategic Studies, an independent research center in Cairo. “Their regional presence and role will shrink.”
    Even before the global economic crisis undercut the price of oil, Iran was gripped by an economic crisis. Now, inflation is running at 30 percent, according to the Central Bank. And this month, bazaar merchants, who wield significant political power, went on strike after the government imposed a value-added tax.
    Ahmadinejad’s way of dealing with the general economic distress has been to increase government spending, primarily through imports. But the International Monetary Fund said in August that Iran faced unsustainable deficits should prices for its oil fall to $75 a barrel.
    It is not expected that economics will force Iran to change its underlying ideology – or long-term goals. Still, if prices stay depressed for long, it could mean a greater willingness in Tehran to find a compromise on the nuclear issue and, perhaps, a political shift that left Ahmadinejad vulnerable in June’s presidential election, analysts said.
    “The government has distributed money and has encouraged spending,” said Saeed Leylaz, an economist and political analyst in Tehran. “It has given high salaries to its own supporters. They have increased their expectations, and there is no way they can give them less now without making them unhappy. If the government fails to respond to their expectations, it might lead to a crisis.”

    On a winter day in 2006, Russia suddenly cut off the supply of natural gas to Ukraine, where a pro-Western government had come to power. The Kremlin cited a dispute over prices. But some Western officials said Vladimir Putin, Russia’s president at the time and still its paramount leader, was sending a message: Russia was willing to use its vast energy reserves to try to reassert the dominance it lost with the Soviet Union’s collapse.
    Two months ago, the muted reaction of some European nations to Russia’s invasion of Georgia seemed to indicate that Putin’s policy was working, some foreign policy analysts said. Europe had become dependent on Russia’s gas and could not afford to mount a strong challenge, they said.
    Now, however, with gas prices tumbling, this strategy has been thrown into question. Europeans may no longer be as intimidated, knowing that Russia is less able to pressure its customers. “The more other countries are nervous about their energy security, the better Russia is geopolitically,” said Peter Halloran, chief executive of Pharos Financial Group, an investment fund based in Moscow.
    Still, at least in terms of its domestic economy, Halloran and other experts said Russia was better positioned to weather lower prices than were many other oil and gas producers, because it had adopted conservative fiscal practices in recent years.
    The country deposited a significant portion of its oil revenues into two stabilization funds, which totaled $190 billion at the beginning of this month. The Russian budget is pegged to an oil price of roughly $70 a barrel – most revenues exceeding that have gone to these so-called rainy-day funds.
    The Kremlin also succeeded in recent years in establishing control over many of the pipelines that transport oil and gas in the region – an achievement that will endure despite the lower prices.
    The Kremlin has started tapping into its stabilization funds to prop up the banking industry and the stock market, which has been hard hit by the international financial crisis, dropping by more than two-thirds since May. The government may also have to rescue many of Russia’s oligarchs, the industrial magnates who were thriving with the high price of natural resources but have now been suffering steep losses.
    These bailouts, combined with declining oil and gas revenues, could make it difficult for the Kremlin to carry out plans to modernize the country’s aging infrastructure, from highways to schools, and still promote Russian ambitions abroad.
    Even so, opposition politicians in Russia said they did not perceive sagging prices as undermining Putin’s power.
    “I think that it’s too early,” said Grigory Yavlinsky, an opposition leader. “The crisis at the moment is not related to the population enough. The banks are still open, and unemployment is not yet going higher. It’s a threat, but it’s only a potential threat.”
    Simon Romero reported from Caracas; Michael Slackman from Amman, Jordan; and Clifford J. Levy from Moscow. Mara Eugenia Daz contributed reporting from Caracas, and Nazila Fathi from Tehran.

  • #6506

    Charles Randall

    Here is another update from NY Times on the impact of falling oil prices expanded this time to all 3 anti-US oil companies – Venezuela, Iran & Russia. As article mentions like Venezuela all three used oil money as political means to an ideological end but as oil drops below $70/Bbl it is likely the check book diplomacy & intimidation are likely to come to an abrupt end – leaving them with only angry words. Some of which already provide flavoring to price they are eating as result of antagonizing the Saudi’s at the last OPEC meeting which spurred them not to cut production in a falling market (at least not until the upcoming OPEC November meeting that has advanced to Oct 24 – lets hope Venezuela & Iran keep running off their mouth at this meeting as well).
    A Fourth is not mentioned here (because the motivating forces are different) is Mexico where oil production has fallen by over 10% and exports have decreased by over 18% – which are being blamed on several Hurricanes this year like Ike. And at the same time 2008 fuel imports into Mexico have hit a record by increasing over 71% from 2007 levels representing some $19.5 billion! Since Mexican government depends on oil revenue for over 90% of its budget funding this differential represents a crisis that cannot be continued.
    Although the Hurricanes are blamed as one time event – truth is Oil production has been falling since 2005 and it is unlikely the proven reserves will last more than 10 years from the aging fields of Pemex. The Mexican Senate Commission has at least admitted to themselves that something needs to be done and Monday approved a reform oil bill to spur private investments in the industry. The bill will be submitted soon to the full Senate for a vote according to legislators – but it is unlikely to do anything since all of the strongest privatizing aspects have been stripped from it.  But even the remaining proposal has drawn criticism from leftist who led oil industry nationalization in 1938, who still claim it represents a stealth privatization of the industry.  Either way it wont work & the sooner Senate / Leftist realize it the better off the country/Pemex/their export partners will be.
    This is the crux of Mexico/Pemex’s problem – they have new (HUGE) offshore reserves that cannot be developed without the help of global oil industry deepwater technology players who would want a portion of the find as offset to risk & level investment required.  Pemex & Mexico lack the technology & financing to develop the fields on their own and either the Leftist Democratic Revolution Party’s stranglehold on the Mexican oil industry has to break or the Country & Pemex will breakdown.
    You know if we really had a political leader, or Energy Department with Plan, or just someone to ask what the hell use is NAFTA to the US if Mexico can invest in US companies (i.e. like Cemex major owner of US Cement plants/industry/market) but the US is blocked from investment in Mexican companies that desperately need help but are blocked by outdated and useless political ideology?  Makes it as bad as the other 3 Oil Countries and it is past time for reckoning and some free market deleveraging!

  • #6504

    Charles Randall

    ‘Oil Falls as Saudi Arabian Minister Fails to Endorse OPEC Cut’
    By Alexander Kw’atkowsk”   Oct. 23, 2008 (Bloomberg) Crude oil fell, giving up earlier gains, after Saudi Arabia failed to endorse Iran’s call for an OPEC production cut when the group meets tomorrow.  Oil prices lost earlier gains after the oil minister of’ Saudi Arabia, the group’s biggest producer, declined to express his support for a possible cut on his arrival in Vienna. Iranian Oil Minister Gholamhossein Nozari had earlier called for the group to slash production by 2 million barrels a day.“OPEC’s major problem is that they have never faced a demand-led surplus before,” David Hufton of London-based PVM Oil Associates Ltd. sa’d ‘n an e-mailed note today. “Cutting’ supply when the other leg is being cut off faster does not restore the balance.”    Crude o’l for December delivery fell as much as 85 cents, or 1.3 percent, to $65.90 a barrel on the New York Mercantile Exchange. The contract traded at $66.88 at 1:57 p.m. London time. It earlier rose as much as $1.75 to $68.50 a barrel.   “Who said anything about a cut?” Saudi Arabia’s Ali al-Naimi said when asked whether he supports the possibility of the group agreeing to reduce output when it meets tomorrow. “Prices will be determined by the market.”    Prices have more than halved since rising to a record $147.27 on July 11 on concerns that the global economic slow down will cut oil demand. Yesterday, futures fell $5.43 to $66.75, the lowest settlement since June 13, 2007.                        U.S. Demand Falls     U.S. fuel demand during the past four weeks was down 8.5 percent from a year ago, according to an Energy Department report yesterday. Gasoline demand averaged 8.8 million barrels a day in the past four weeks, down 4.3 percent from the same period last year, the report showed.The global economy w’ll be in a recess’on through most of next year as weak demand ‘n the U.S. spreads to Europe and beyond, Dow Chem’cal Co. Ch’ef Executive Off’cer Andrew Liveris said in a telephone interview today.   “The rate of reduction in demand is good for cutting,” Iran’s Nozari told reporters today. Brent crude oil for December settlement fell as much as 52 cents, or 0.8 percent, to $64 a barrel on London’s ICE Futures Europe exchange. It traded at $64.51 at 1:45 p.m. local time.

  • #6503

    Charles Randall

    Saudi’s only need a $30-40/Bbl price to support their budgets and think they are going to continue teach lesson to Iran & Venezuela who need $90-100/Bbl to meet their budgets. Several analysts thought that OPEC has become non-functional anyway since all volume cuts to enforce directional moves have always fallen on Saudi’s while all the others cheat on targets to max profit.
    Last t’me Saudi’s decide to teach the cheaters (& loudmouths like Iran/Venezuela this time) the price dropped into the teen’s. It will be good opportunity for independents & non-integrated refineries but not as much for upstream heavy oil companies ……. UNLESS they use it as opportun’ty to pick up competitors reserves at a firesale price as they did in mergers 90’s where oil was purchased at less than $6/Bbl equivalent and refining assets were at $0.10-$0.40 per $1.0 replacement/invested value.

  • #6470


    Although OPEC announced production cuts of 1.5 million barrels per day last month, the oil price has failed to rebound, with the markets anticipating falling oil demand arising from the international financial and economic crises. In Venezuela, this has put pressure on both the government and state oil company PDVSA.
    Reliance on oil revenues. The government has based its 2009 budget on a price of $60 per barrel. Oil revenues account for some 90% of Venezuela’s export earnings, more than 50% of the government’s budget revenues and around 30% of gross domestic product.
    There is thus much at stake. Government rhetoric is now dominated by talk of saving money and austerity, and the country being able and willing to take steps to live with oil prices at 2007 levels ($60 to $70 dollars per barrel) or less. Stress is also being put on the scale of Venezuela’s international reserves of nearly $40 billion.
    Competition for government funds. PDVSA has been suffering from under-investment in its core business for some years, as windfall profits from rising oil prices are deployed in domestic social programs and to support international political ambitions.
    As prices and revenues fall, and inflation approaches 40%, the government will have to make some tough choices between domestic and international political priorities and investing to sustain its oil industry:
    Already it appears that construction of the ambitious $4 billion oil refinery project in Nicaragua is being “postponed.”
    Cuba could face a reduction in its 90,000 barrels per day of heavily subsidized crude oil, and Venezuelan support to upgrade Cuba’s Soviet-era refineries
    may become problematic.
    The logic and value of the subsidized oil supply arrangements for PetroCaribe’s participant countries must be under review, despite the contractual commitments involved.
    Policy shift? The falling oil price makes the need to address eroding Venezuelan production capacity even more urgent. It will need to lift its investment “game” if it is to sustain and grow its oil production to take advantage of global demand growth in the future.
    Therefore, the rapid fall in oil prices could prompt a material change in government priorities. Allowing PDVSA to retain a greater share of the revenue it generates to compensate for falling oil prices–so it can at least maintain its current investment plans–will be a first step and test of government intent. If PDVSA receives this support, there will obviously be even less funds for domestic and international commitments.
    The recent dramatic fall in the oil price could prove to be a brutal reminder that failure to continue to invest results in production decline. The longer prices remain low, the more difficult the situation will become for the government and PDVSA. If PDVSA fails to attract foreign funding, it may have to make major sacrifices in terms of domestic and international plans to maintain a satisfactory level of investment. The alternative is to sacrifice its future.

    To read an extended version of this article, log on to Oxford Analytica’s Web site

  • #6469

    Charles Randall

    Here is update on PDVSA/Chavez/Venezuela  – do you think Chavez will keep being idiot & go down with his anti-US program or will he suck it up & make nice with US consumers to stay in power now that his checkbook diplomacy is going under?
    The ink is still wet on the Nicaragua refinery news item & looks like it is now canceled!
    I Hadn’t seen that the Venezuela inflation was now 40%  – last I heard it was only 27%.
    The Chinese have canceled all Nov imports of Diesel due high Sept inventories that never went away & now may do same with crude and have already cutback several refineries or taken advanced shutdown scheduled maintenance.

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