China's CNOOC Poised for Growth

Not to beat a dead horse, but we’re still impressed with China’s control over its fast growing economy. While the Chinese GDP down-throttled to single digits in the second quarter of the year, recent data points to a reacceleration. Among recently released figures, Chinese imports in August were exceptionally impressive. Imports grew by 35.2 percent during the month over the year earlier period, a vast improvement over July’s 22.7 percent growth, and easily outpacing expectations of 27.5 percent. The remarkable import number goes part in parcel with strong retail sales and industrial production reports as well. China’s economic strength is also evident in commodity and energy prices. Even with the largest economies in the world, the U.S. and Europe, struggling to make strides in their recoveries, the most economically sensitive resources are pointing higher. Case in point is copper which is holding steady just below $3.50 a pound. Another is crude oil, while pulling back a tad over the last couple days, remains above $75 a barrel. As the developed economies recover (be it with or without more government intervention), and the developing world continues to pursue energy intensive infrastructure projects, worldwide oil demand will continue to move higher. Most easy to reach oil supplies have been or are close to, exhausted, and the world’s turning more towards deepwater deposits to satisfy its oil thirst. It’s not surprising to see the better capitalized oil companies going after the rights to such deposits – many of which are located off the coast of Brazil.

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