- China Says Africa Projects Should be Sustainable, Denounces Criticism
Chinese development projects in Africa must be sustainable, the government’s top diplomat told senior African ministers on Tuesday, as he denounced “outside forces” who seek to vilify cooperation by accusing China of creating debt traps.
Chinese President Xi Jinping pledged $60 billion to African nations at a China-Africa summit on cooperation in September, matching the size of funds offered at the previous summit in Johannesburg in 2015.
Beijing has denied engaging in “debt trap diplomacy” and Xi said in September government debt from Chinese interest-free loans due by the end of the year would be written off for the poorest African nations.
Chinese State Councillor Wang Yi told foreign and other ministers from some 50 African countries in Beijing his country does not pursue selfish geopolitical gains in Africa and would never impose its will on others.
He said China’s approach to cooperation with Africa had been different to that of traditional powers.
“For some time, however, some outside forces have tried to vilify and undermine China-Africa cooperation by cooking up (accusations of) so-called neo-colonialism and debt traps, which are totally groundless and are not accepted by African people,” Wang said.
“Such attempts expose a total lack of respect for Africa, lack of understanding about China, absence of knowledge about the true friendship between China and Africa that has stood the test of time,” he said.
Joint projects must be sustainable, he said.
“We need to take forward project cooperation in such a way as to ensure real economic and social benefits and respect market principles,” Wang said.
African countries running up debt they won’t be able to pay back, including to China, should not expect to be bailed out by Western-sponsored debt relief, the United States’ top Africa diplomat warned on Sunday.
The International Monetary Fund (IMF) and World Bank began the Heavily Indebted Poor Countries Initiative in 1996 to help the world’s poorest countries clear billions of dollars of unsustainable debt.
However, Africa is facing another potential debt crisis, with around 40 percent of low-income countries in the region now in debt distress or at high risk of it, according to an IMF report released a year ago.
Wang said the world should respect Africa.
“The African continent is the independent homeland for the 1.4 billion people of Africa, not a sphere of influence for any major country,” he said.
Oil Prices Recover Slightly Amidst Demand Concerns in U.S. and China
Oil Prices Continue Slide as Market Skepticism Grows Over OPEC+ Cuts
Global oil markets witnessed a continued decline on Wednesday as investors assessed the impact of extended OPEC+ cuts against a backdrop of diminishing demand prospects in China.
Brent crude oil, the international benchmark for Nigerian crude oil, declined by 63 cents to $76.57 a barrel while U.S. WTI crude oil lost 58 cents to $71.74 a barrel.
Last week, the Organization of the Petroleum Exporting Countries and its allies, collectively known as OPEC+, agreed to maintain voluntary output cuts of approximately 2.2 million barrels per day through the first quarter of 2024.
Despite this effort to tighten supply, market sentiment remains unresponsive.
“The decision to further reduce output from January failed to stimulate the market, and the recent, seemingly coordinated, assurances from Saudi Arabia and Russia to extend the constraints beyond 1Q 2024 or even deepen the cuts if needed have also fallen to deaf ears,” noted PVM analyst Tamas Varga.
Adding to the unease, Saudi Arabia’s decision to cut its official selling price (OSP) for flagship Arab Light to Asia in January for the first time in seven months raises concerns about the struggling demand for oil.
Amid the market turmoil, concerns over China’s economic health cast a shadow, potentially limiting fuel demand in the world’s second-largest oil consumer.
Moody’s recent decision to lower China’s A1 rating outlook from stable to negative further contributes to the apprehension.
Analysts will closely watch China’s preliminary trade data, including crude oil import figures, set to be released on Thursday.
The outcome will provide insights into the trajectory of China’s refinery runs, with expectations leaning towards a decline in November.
Russian President Vladimir Putin’s diplomatic visit to the United Arab Emirates and Saudi Arabia has added an extra layer of complexity to the oil market dynamics.
Discussions centered around the cooperation between Russia, the UAE, and OPEC+ in major oil and gas projects, highlighting the intricate geopolitical factors influencing oil prices.
U.S. Crude Production Hits Another Record, Posing Challenges for OPEC
U.S. crude oil production reached a new record in September, surging by 224,000 barrels per day to 13.24 million barrels per day.
The U.S. Energy Information Administration reported a consecutive monthly increase, adding 342,000 barrels per day over the previous three months, marking an annualized growth rate of 11%.
The surge in domestic production has led to a buildup of crude inventories and a softening of prices, challenging OPEC⁺ efforts to stabilize the market.
Despite a decrease in the number of active drilling rigs over the past year, U.S. production continues to rise.
This growth is attributed to enhanced drilling efficiency, with producers focusing on promising sites and drilling longer horizontal well sections to maximize contact with oil-bearing rock.
While OPEC⁺ production cuts have stabilized prices at relatively high levels, U.S. producers are benefiting from this stability.
The current strategy seems to embrace non-OPEC non-shale (NONS) producers, similar to how North Sea producers did in the 1980s.
Saudi Arabia, along with its OPEC⁺ partners, is resuming its role as a swing producer, balancing the market by adjusting its output.
Despite OPEC’s inability to formally collaborate with U.S. shale producers due to antitrust laws, efforts are made to include other NONS producers like Brazil in the coordination system.
This outreach aligns with the historical pattern of embracing rival producers to maintain control over a significant share of global production.
In contrast, U.S. gas production hit a seasonal record high in September, reaching 3,126 billion cubic feet.
However, unlike crude, there are signs that gas production growth is slowing due to very low prices and the absence of a swing producer.
Gas production increased by only 1.8% in September 2023 compared to the same month the previous year.
While the gas market is in the process of rebalancing, excess inventories may persist, keeping prices low.
The impact of a strengthening El Niño in the central and eastern Pacific Ocean could further influence temperatures and reduce nationwide heating demand, impacting gas prices in the coming months.
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