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Forex Response To Oil And Gas Disputes In The South China Sea
Some still contend that the Vietnam War was all about oil in the South China Sea. Today there are new oil and gas finds in the Spratly Islands in the South China Sea and perhaps a threat of armed conflict. Our concern is the Forex response to oil and gas disputes in the South China Sea. Although the United States is no longer engaged in a ground war in Indochina its navy patrols the South China Sea. Toward the south of this region lie over seven hundred and fifty islands, cays, atolls, in islets called the Spratly Islands. This has long been a productive fishery with its many reefs. In the modern era the area promises to become important for extensive oil and gas deposits. The Spratly Islands lie off the West coasts of Malaysia, Brunei and the Philippines and the East Coast of Southern Vietnam. Mainland China and Taiwan are two and three times the distance from the islands. Our concern about a Forex response to oil and gas disputes in the South China Sea is similar to our concern about the Forex response to Persian Gulf Tension. It has to do with the militarization of this cluster of islands.
Just Who Owns the Spratly Islands?
Disputes over sovereignty in the Spratly islands go back years to when the French governed Indochina as a colony and pre-communist China under Chang Kai Shek argued over a French presence in the islands. Today Taiwan and mainland China each claim all of the South China Sea. Malaysia, Brunei, Vietnam and the Philippines claim parts of the islands. Mainland China, Taiwan, Vietnam, and the Philippines all have small troop garrisons in the islands. Brunei does not have troops to back up its claim. Tensions have recently risen as a Philippine company has found a new and large gas deposit. The Philippines already take natural gas from the area and pipe it to the island of Luzon. The Forex response to oil and gas disputes in the South China Sea could manifest themselves in a number of ways, both in direction and foreign currency trading volume.
Forex Response to Oil and Gas Disputes in the South China Sea
How Forex markets respond to disputes in the region will largely depend upon just how hot the situation gets. Last year a Chinese military vessel attempted to ram a Philippine oil exploration vessel. The US military has increased its presence in the area. In fact, the Philippines and other nations have sought closer ties with the USA in response to the perceived threat from China. Who gets to use the estimated twenty trillion cubic feet of natural gas just discovered could make a difference as well. When China’s industrial machine recovers from the recession and starts building again the rights to the energy wealth of the South China Sea could support their economy and the Yuan.
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3. Some still contend that the Vietnam War
was all about oil in the South China Sea.
Today there are new oil and gas finds in
the Spratly Islands in the South China Sea
and perhaps a threat of armed conflict.
www.TheForexNittyGritty.com
4. Our concern is the Forex response to oil
and gas disputes in the South China
Sea.
Although the United States is no longer
engaged in a ground war in Indochina
its navy patrols the South China Sea.
www.TheForexNittyGritty.com
5. Toward the south of this region lie
over seven hundred and fifty islands,
cays, atolls, in islets called the Spratly
Islands.
www.TheForexNittyGritty.com
6. This has long been a productive fishery
with its many reefs. In the modern era
the area promises to become important
for extensive oil and gas deposits.
www.TheForexNittyGritty.com
7. The Spratly Islands lie off the West
coasts of Malaysia, Brunei and the
Philippines and the East Coast of
Southern Vietnam.
www.TheForexNittyGritty.com
8. It is also close to Singapore.
Mainland China and Taiwan are two
and three times the distance from
the islands.
www.TheForexNittyGritty.com
9. Our concern about a Forex response
to oil and gas disputes in the South
China Sea is similar to our concern
about the Forex response to Persian
Gulf Tension.
It has to do with the militarization of
this cluster of islands
www.TheForexNittyGritty.com
10. Just Who Owns the Spratly Islands?
www.TheForexNittyGritty.com
11. Disputes over sovereignty in the Spratly
islands go back years to when the
French governed Indochina as a colony
and pre-communist China under Chang
Kai Shek argued over a French presence
in the islands.
www.TheForexNittyGritty.com
12. Today Taiwan and mainland China
each claim all of the South China Sea.
Malaysia, Brunei, Vietnam and the
Philippines claim parts of the islands.
www.TheForexNittyGritty.com
13. Mainland China, Taiwan, Vietnam,
and the Philippines all have small
troop garrisons in the islands.
Brunei does not have troops to back
up its claim.
www.TheForexNittyGritty.com
14. Tensions have recently risen as a
Philippine company has found a new
and large gas deposit.
The Philippines already take natural gas
from the area and pipe it to the island
of Luzon.
www.TheForexNittyGritty.com
15. The Forex response to oil and gas
disputes in the South China Sea could
manifest themselves in a number of
ways, both in direction and foreign
currency trading volume.
www.TheForexNittyGritty.com
16. Forex Response to Oil and Gas
Disputes in the South China Sea
www.TheForexNittyGritty.com
17. How Forex markets respond to disputes
in the region will largely depend upon
just how hot the situation gets.
Last year a Chinese military vessel
attempted to ram a Philippine oil
exploration vessel.
www.TheForexNittyGritty.com
18. The US military has increased its
presence in the area.
In fact, the Philippines and other
nations have sought closer ties with the
USA in response to the perceived threat
from China.
www.TheForexNittyGritty.com
19. Who gets to use the estimated twenty
trillion cubic feet of natural gas just
discovered could make a difference as
well.
www.TheForexNittyGritty.com
20. When China’s industrial machine
recovers from the recession and starts
building again the rights to the energy
wealth of the South China Sea could
support their economy and the Yuan.
www.TheForexNittyGritty.com
21. On the other hand, overt military
conflict, especially involving the USA
and China could wreak havoc on the
Yuan and US dollar.
www.TheForexNittyGritty.com
22. Some analysts expect the rhetoric to cool
down once the Chinese leadership
changes this year and lower level
functionaries no longer feel the need to
posture and appear decisive or strong.
www.TheForexNittyGritty.com
23. Then concern about a Forex response
to oil and gas disputes in the South
China Sea might diminish as well.
Then traders can go back to concerns
about such things as the China current
account surplus or deficit and not the
actions of the People’s Liberation
Army.
www.TheForexNittyGritty.com
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information regarding the Forex
markets and foreign currency trading,
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