International News 20/12
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Sinopec predicts oil consumption in China will peak in 2027
China's state-owned oil and gas company, Sinopec, has forecast that the country's petroleum consumption will reach its peak in 2027, driven by a decline in demand for diesel and petrol. In an official statement, Sinopec has indicated that China's oil consumption in 2027 will be no more than 800 million metric tonnes, or 16 million barrels per day. This represents a more precise forecast than that made by Sinopec last year, when peak oil consumption was estimated to occur between 2026 and 2030. The current oil consumption in China is down by approximately 10 million tonnes compared to last year, representing the second annual decline in two decades.
The incoming Trump administration in the US also introduces an element of uncertainty for China's energy industry. According to Wang Pei, Deputy General Manager of Sinopec Economics & Development Research Institute, the key factor to watch is Donald Trump's second term in 2025. Further potential changes to US sanctions on Iran and their impact on Iran's oil exports of 1.5 million barrels per day, as well as changes to environmental policies, trade, and technology barriers, will also affect China's economy and energy transition
New Zealand Sinks into Recession, Interest Rate Cuts Expected to Continue
New Zealand's economy has entered a recessionary period following a more pronounced decline in economic activity than anticipated. The latest figures show that the Gross Domestic Product (GDP) fell by 1.0% in the third quarter, exceeding market expectations of a decline of only -0.2%. In addition, the previous quarter's output has been revised downwards to -1.1%. This decline, spanning two consecutive quarters, meets the technical definition of a recession. Economists contend that this unanticipated data bolsters the case for more assertive interest rate reductions by the Reserve Bank of New Zealand (RBNZ). Analysts anticipate a 75-basis-point reduction in interest rates in February, resulting in a new rate of 2.25%. The market has already factored in the possibility of a 50-basis-point cut. These measures are deemed necessary due to the current state of the economy. This marks the most significant decline in two quarters since the economic crisis of 1991.
Jerome Powell: The Fed Won't Get Involved in Trump's Strategic Bitcoin Reserve Plan
During a press conference, Federal Reserve Chairman Jerome Powell confirmed that the US central bank is not allowed to own Bitcoin and has no intention of building a strategic Bitcoin reserve. Powell explained that the authority to change the law to allow the Fed to hold Bitcoin lies with Congress, but stated that the Fed is not pursuing such changes. These remarks come after a two-day policy meeting where the Fed decided to cut interest rates and adopt a more cautious approach in the future. Powell's statement was a response to President-elect Donald Trump's proposal to create a Strategic Bitcoin Reserve using bitcoins seized from criminal activity. The price of Bitcoin immediately reacted to Powell's comments, which had previously surged since Trump's victory in the election.
Broadcom Joins the US$1 Trillion Club, the New Semiconductor King of the AI Explosion Era
In December 2024, Broadcom, a leading company in the technology and semiconductor sector, saw a notable increase in its market capitalisation. The company has established itself as a global leader in digital transformation, particularly through its innovations in artificial intelligence (AI). Broadcom offers a comprehensive range of hardware and software solutions across multiple sectors, including cloud infrastructure, data centre, networking, broadband, and wireless. Its integrated product portfolio spans the entire data centre value chain. The company's competitive advantage lies in its ability to produce application-specific integrated circuits (ASICs), which offer a cost-effective alternative to graphics processing units (GPUs) manufactured by Nvidia. This positions Broadcom to become a dominant player in the AI market. In the fourth quarter of fiscal 2024, Broadcom reported revenue of $30.1 billion, representing a significant 44% increase from the previous fiscal year, driven primarily by high demand for AI.