From Louis Gave (on Real Vision):
“2 and 1/2 years ago Xi Jinping went to Moscow and signed a 50 year deal where China was buying natural gas at a fixed price, which was like half the market from Russia, paid for in renminbi. Now when you think that, who's the marginal buyer of oil in the world? It's China. For all the talk about how Chinese growth is collapsing, et cetera, Chinese oil imports last year were up 16% year on year to new all-time highs. So China needs energy, and keeps on. The reason oil went to $150 was China's emergence. So when China does a side deal with Russia and says basically, hey, we're covered here, then if your marginal buyer disappears, then all of a sudden the cost of oil doesn't go to the price where the marginal buyer's willing to pay, it goes to the price of where the marginal producer produces it. And so it eventually went-- And now we're obviously at the marginal cost. But that marginal cost may go down again. Because now with Donald Trump, we're going to get the Keystone Pipeline. I mean, you go to Alberta, your oil is at $25 a barrel. It's stuck there because it can't move. You put the Keystone Pipeline in and oil price goes down…”
