{"id":136284,"date":"2024-06-01T12:06:33","date_gmt":"2024-06-01T12:06:33","guid":{"rendered":"https:\/\/websitedesigns.com.au\/elankanew\/?p=136284"},"modified":"2024-06-02T00:12:12","modified_gmt":"2024-06-02T00:12:12","slug":"the-latest-blow-to-the-oil-and-gas-markets-chinese-manufacturing-sector-shrinks-again-by-hemantha-yapa-abeywardena","status":"publish","type":"post","link":"https:\/\/websitedesigns.com.au\/elankanew\/the-latest-blow-to-the-oil-and-gas-markets-chinese-manufacturing-sector-shrinks-again-by-hemantha-yapa-abeywardena\/","title":{"rendered":"The latest blow to the oil and gas markets: Chinese manufacturing sector shrinks again! &#8211; By  Hemantha Yapa Abeywardena"},"content":{"rendered":"<h2 style=\"text-align: center;\"><span style=\"color: #800000;\"><strong>The latest blow to the oil and gas markets: Chinese manufacturing sector shrinks again! &#8211; By Hemantha Yapa Abeywardena<span style=\"font-size: 16px; color: #000000;\"><img loading=\"lazy\" loading=\"lazy\" decoding=\"async\" class=\"wp-image-133337 size-thumbnail aligncenter\" src=\"https:\/\/websitedesigns.com.au\/elankanew\/wp-content\/uploads\/2024\/04\/Hemantha-Yapa-Abeywardena-150x150.jpg\" alt=\"Hemantha Yapa Abeywardena\" width=\"150\" height=\"150\" \/><\/span><\/strong><\/span><\/h2>\n<div class=\"separator\"><a href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEjkGVlacTntykdMhBZdhb-EC6bOd7XXyt5UDmjrk_Eh5fbd7i6RtvXllnQrzOn3gD_DzKmpNTn1G-SGW1oahBvnGbqvSgJg9TqNpsIX30P-FwIk0QkiYgLCr5jPc6_NuKlEx3710NOyDlJfU7_OL89oxXE2fD2KwxPPUnDou87B3OCDk9N7i7irsBAYbqQ\/s600\/chinese-contraction.jpg\"><img decoding=\"async\" class=\"aligncenter\" title=\"Chinese economic contraction - 2024\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEjkGVlacTntykdMhBZdhb-EC6bOd7XXyt5UDmjrk_Eh5fbd7i6RtvXllnQrzOn3gD_DzKmpNTn1G-SGW1oahBvnGbqvSgJg9TqNpsIX30P-FwIk0QkiYgLCr5jPc6_NuKlEx3710NOyDlJfU7_OL89oxXE2fD2KwxPPUnDou87B3OCDk9N7i7irsBAYbqQ\/s16000-rw\/chinese-contraction.jpg\" alt=\"Chinese economic contraction - 2024\" border=\"0\" data-original-height=\"411\" data-original-width=\"600\" \/><\/a><\/div>\n<div><\/div>\n<p><span style=\"font-size: 16px; color: #000000;\">Source:\u00a0<a style=\"color: #000000;\" href=\"https:\/\/www.oilfutures.co.uk\/2024\/06\/the-latest-blow-to-oil-and-gas-markets.html\" target=\"_blank\" rel=\"noopener\">oilfutures<\/a><\/span><\/p>\n<p><span style=\"font-size: 16px; color: #000000;\">In the ascending order of anxiety, the OPEC+ has been forced to accumulate a growing range of bad news in recent times for its decision makers to digest. In this context, the latest manufacturing data from China hardly comes as a catalyst for optimism, as far as the oil cartel is concerned.<\/span><\/p>\n<p><span style=\"font-size: 16px; color: #000000;\">China&#8217;s manufacturing PMI, the key indicator that reflects its production activity, has fallen yet again in May, indicating a significant contraction: it has come down to 49.5 in May, from 50.4 in April; the threshold is 50% and anything below it, is a contraction in the manufacturing sector.<\/span><\/p>\n<p><span style=\"font-size: 16px; color: #000000;\"><a style=\"color: #000000;\" href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEiu8ZZ7R_X6zizVIeKU0L7Eet_pD5rmhsCCX41r0N_CO9oWV8XnX4SVdIZlTq5aAUuoNm7lm2nVN342OgDKmjQicwd28frFioEyDTU9YvaERbc9Sjxpx3wdJ4arwy015NoLoZIMVby5CK67i57WacbhazSu-uLuFAHlr3TqNv2lVlIBKsVkPL1wCWj5Pho\/s633\/china-pmi-may.PNG\"><img decoding=\"async\" class=\"aligncenter\" title=\"China's Manufacturing PMI - May 2024\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEiu8ZZ7R_X6zizVIeKU0L7Eet_pD5rmhsCCX41r0N_CO9oWV8XnX4SVdIZlTq5aAUuoNm7lm2nVN342OgDKmjQicwd28frFioEyDTU9YvaERbc9Sjxpx3wdJ4arwy015NoLoZIMVby5CK67i57WacbhazSu-uLuFAHlr3TqNv2lVlIBKsVkPL1wCWj5Pho\/s16000-rw\/china-pmi-may.PNG\" alt=\"China's Manufacturing PMI - May 2024\" border=\"0\" data-original-height=\"388\" data-original-width=\"633\" \/><\/a><\/span><\/p>\n<p><span style=\"font-size: 16px; color: #000000;\">The disappointing news from the world&#8217;s second largest economy comes in the wake of the OPEC+ holding its meeting, scheduled to be held on June 1 in person, online &#8211; all of a sudden with no convincing explanation.\u00a0<\/span><\/p>\n<p><span style=\"font-size: 16px; color: #000000;\">Prior to that, there were reports that Kazakhstan, a member of the OPEC+ from the Central Asia, wanted to have a bigger quota for its production: in 2023, it produced 1.8 millions barrels per day and at present holds the18th position in the world, when it comes to oil production.<\/span><\/p>\n<div class=\"separator\" style=\"text-align: justify;\"><\/div>\n<div class=\"separator\" style=\"text-align: justify;\"><span style=\"font-size: 16px; color: #000000;\">In addition, some African members of the OPEC+ want similar increase in their production quotas in order to address growing local economic issues.\u00a0<\/span><\/div>\n<div class=\"separator\" style=\"text-align: justify;\"><\/div>\n<div class=\"separator\" style=\"text-align: justify;\"><span style=\"font-size: 16px; color: #000000;\">The key members of the OPEC+, especially Saudi Arabia, meanwhile, still want to maintain production cuts in order to what they call, &#8216;stabilizing&#8217; the markets. Judging by the unease felt by some members, if not all, this strategy can only be extended indefinitely at the expense of the unity of the OPEC+ &#8211; if it is a goal; the OPEC+ is going through a period of serious challenges since its inception in 1960.\u00a0<\/span><\/div>\n<p><span style=\"font-size: 16px; color: #000000;\">The less-than transparent trail left behind by Angola, while leaving the OPEC+ last year, is an inverse testament to the risks that the cartel face with, if key members get heavy-handed over the production cuts.\u00a0<\/span><\/p>\n<div class=\"separator\" style=\"text-align: justify;\"><\/div>\n<div class=\"separator\" style=\"text-align: justify;\"><span style=\"font-size: 16px; color: #000000;\">The global oil producers usually pin their hopes on the Chinese economy in the hope that it will push up the demand that has been stagnating for months. Unfortunately, the glimmer of hope appears to be getting dimmer by the month like a firefly in its last minutes of earthly existence &#8211;\u00a0 in the presence of contraction in the manufacturing sector, of course.\u00a0<\/span><\/div>\n<div class=\"separator\"><span style=\"font-size: 16px; color: #000000;\"><a style=\"color: #000000;\" href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEi-WUDFTd6RFLmwUaKpnz92W9958u8U7MiGe8rmGmtmTe0n5svwv_hs4l6om4zihWwr7jWQJGwf-PaexjZwSxuQwfgp_uMxeCCAWgw-H6bLPxrORPeZ5aCjwJaf4APfR9FV4tOvBG_5J7y85nOUBu13x-BSj-16xuxBsHYX9ZzNq0YYZ6CWOXQnSlOOz-k\/s619\/weekly-oil-prices.gif\"><img decoding=\"async\" class=\"aligncenter\" title=\"Weekly oil prices in 2023\/24\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEi-WUDFTd6RFLmwUaKpnz92W9958u8U7MiGe8rmGmtmTe0n5svwv_hs4l6om4zihWwr7jWQJGwf-PaexjZwSxuQwfgp_uMxeCCAWgw-H6bLPxrORPeZ5aCjwJaf4APfR9FV4tOvBG_5J7y85nOUBu13x-BSj-16xuxBsHYX9ZzNq0YYZ6CWOXQnSlOOz-k\/s16000-rw\/weekly-oil-prices.gif\" alt=\"Weekly oil prices in 2023\/24\" border=\"0\" data-original-height=\"447\" data-original-width=\"619\" \/><\/a><\/span><\/div>\n<p><span style=\"font-size: 16px; color: #000000;\">The crisis in the manufacturing sector in China has been exacerbated by the crisis in its property markets and growing chasm between the Asian giant and the West; at present, neither shows any sign of abating. The issue over Taiwan, meanwhile, has the potential to push the mistrust &#8211; or mutual loathing &#8211; beyond the hazy redline drawn in the ever shifting diplomatic sand.<\/span><\/p>\n<p><span style=\"font-size: 16px; color: #000000;\">Although the OPEC+ hoped that China&#8217;s purchasing power, when it came to the commodity in question, would grow steeply in the aftermath of the Covid-19 pandemic, it appeared to be illusive with fluctuating mixed signals: having been in the contraction territory for months, the PMI bounced back above the threshold, 50%, in March this year to 50.8, only to come down in April to 50.4. As mentioned above, it fell below 50% in May to 49.5, defying every single optimistic forecast that used to say otherwise.<\/span><\/p>\n<p><span style=\"font-size: 16px; color: #000000;\">The IMF, meanwhile, also paints a less-than-clear picture about the Chinese economy; it says the Chinese GDP will go up by 5% and 4.6% in 2024 and 2025 respectively, revising up its own forecast for 2024.<\/span><\/p>\n<p><span style=\"font-size: 16px; color: #000000;\">Analysts blame the Chinese manufacturing contraction on range of factors, both at economic and political levels. They also note that the inflation that has become a global concern due to high energy costs &#8211;\u00a0 for something that the OPEC+ is also responsible &#8211; is also a cause for the issue; export deliveries have come down in proportion to international orders that were on decline.<\/span><\/p>\n<p><span style=\"font-size: 16px; color: #000000;\">The oil producers, meanwhile,\u00a0 have been dealt yet another blow by the growing US crude stocks. It has been rising steadily since March, implying an consumption-apathy among the motorists in the world&#8217;s top economy, the US.<\/span><\/p>\n<table class=\"tr-caption-container\" cellspacing=\"0\" cellpadding=\"0\" align=\"center\">\n<tbody>\n<tr>\n<td><span style=\"font-size: 16px; color: #000000;\"><a style=\"color: #000000;\" href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEgBvc_kjq9qcWrNabBk_kr9g1SOrbr_W8_Z0P0Htxn3ICtIdWL-lZNtWVghurh94rprQME1ut_jIE7PKk4HI5uyizm0aWrtTCaUAdsPLoOW8FFDSCXE6c4pvPZin4gLY0K9VErlrYa-bNC2VbaONDTK2Tl8AttAxcABitgSB6hGRwDJMjKmNsG9_sGgNlw\/s634\/US-crude-stocks.PNG\"><img decoding=\"async\" class=\"aligncenter\" title=\"US crude stocks 2024\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEgBvc_kjq9qcWrNabBk_kr9g1SOrbr_W8_Z0P0Htxn3ICtIdWL-lZNtWVghurh94rprQME1ut_jIE7PKk4HI5uyizm0aWrtTCaUAdsPLoOW8FFDSCXE6c4pvPZin4gLY0K9VErlrYa-bNC2VbaONDTK2Tl8AttAxcABitgSB6hGRwDJMjKmNsG9_sGgNlw\/s16000-rw\/US-crude-stocks.PNG\" alt=\"US crude stocks 2024\" border=\"0\" data-original-height=\"420\" data-original-width=\"634\" \/><\/a><\/span><\/td>\n<\/tr>\n<tr>\n<td class=\"tr-caption\"><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<div><span style=\"font-size: 16px; color: #000000;\">All in all, the stakes have never been higher for the OPEC+ in the presence of many worrying factors. It certainly cannot afford to shoot in the foot, when the need is a shot in the arm.<\/span><\/div>\n<div><\/div>\n<div><\/div>\n<div><\/div>\n<div class=\"separator\" style=\"text-align: center;\"><span style=\"font-size: 16px; color: #800000;\"><em><span style=\"text-decoration: underline;\"><a style=\"color: #800000;\" href=\"https:\/\/websitedesigns.com.au\/elankanew\/elanka-newsletter-sign-up\/\" target=\"_blank\" rel=\"noopener\"><strong>Click here to receive your free copy of the eLanka Newsletter twice a week delivered directly\u00a0to\u00a0your\u00a0inbox!<\/strong><\/a><\/span><\/em><\/span><\/div>\n","protected":false},"excerpt":{"rendered":"<p>The latest blow to the oil and gas markets: Chinese manufacturing sector shrinks again! &#8211; By Hemantha Yapa Abeywardena Source:\u00a0oilfutures In the ascending order of anxiety, the OPEC+ has been forced to accumulate a growing range of bad news in recent times for its decision makers to digest. In this context, the latest manufacturing data [&hellip;]<\/p>\n","protected":false},"author":3,"featured_media":130916,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"aside","meta":{"footnotes":""},"categories":[20,63176],"tags":[65335,63197,65334,63638],"class_list":{"0":"post-136284","1":"post","2":"type-post","3":"status-publish","4":"format-aside","5":"has-post-thumbnail","7":"category-articles","8":"category-hemantha-yapa-abeywardena","9":"tag-chinas-manufacturing","10":"tag-hemantha-yapa-abeywardena","11":"tag-oil-and-gas-markets","12":"tag-opec","13":"post_format-post-format-aside"},"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v25.7.1 (Yoast SEO v25.9) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>The latest blow to the oil and gas markets: Chinese manufacturing sector shrinks again! - By Hemantha Yapa Abeywardena - eLanka<\/title>\n<meta name=\"description\" content=\"The latest blow to the oil and gas markets: Chinese manufacturing sector shrinks again! 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