When you think about how oil prices are determined, the conventional wisdom is supply and demand particularly by OPEC+ producers. How well do they match the supply and demand curves. To make money you often have to think about the nonconventional ideas.

In an article by Clyde Russell of Reuters, the nonconventional idea is what is China doing? In 2025, China is the world’s largest importer of oil, effectively used to powers to provide an effective price floor and ceiling by increasing or decreasing the volume of oil it sent to storage.

China does not release public information on its strategic or commercial stockpiles, but some things are clear. In 2025, China was buying more crude than it needed for domestic consumption and exports of refined products.

In the first 11 months of 2025, the surplus crude was 980,000 barrels per day, given that imports and domestic output combined were 15.8 million b/d, while refinery processing amount to 14.82 million b/d.

There is a solid correlation between the volume of surplus crude and the price of oil, with China adding barrels when prices dip but cutting back when they rise.

This leads to a key question – for 2026, will China continue to buy excess crude when prices drop, effectively providing a floor price?

Analysts believe China ha stored between 1 billion to 1.4 billion barrels of oil, which is the equivalent to 90 days of import cover. At least 700 million barrels are likely commercial inventory, implying a strategic reserve of 500 million barrels.

Will China add another 500 million barrels? What is known is China is building more storage with state oil companies including Sinopec and CNOC adding at least 169 million barrels across 11 sites in 2025 and 2026.

Past history shows China is quite prepared to use inventory as a pricing mechanism and as a buyer of 10 million b/d or 25% of global seaborne total, China is an important factor in oil markets.

Linking to dividend paying stocks, in the developed world because of global warming, governments are trying to do less with fossil fuels, this has meant the largest oil companies have less reserves than in the past. The good news for investors is the price of oil remains higher than exploration means the companies will continue with greater dividends and stock buybacks. Given the world, invariably there will be upwards pressure on oil prices meaning the total return on your investment should mean oil companies are worth holding in your portfolio.

There are more questions than answers, till the next time – to raising questions.

If you are an equity investor, you likely see the glass half full – there is always opportunity somewhere and if you can capture either a short term or long term wave so much the better. If you are a bond investor, you likely see the glass half empty, your big concern is getting paid monthly and getting your principal or money back. If you sense too much risk, the higher the interest rate not matter how sexy or hot the market is.

In an article by Joe Rennison of the New York Times News Service, for the past couple of years the AI trade has been the wave or the place to be on the equity markets. Some of those companies which need access to capital or credit go to the bond market, and the investors are increasing the interest rates for them to be protected.

In one debt deal, Allied Digital Corp, a data center builder, had to pay 3.75% higher in interest above similarly rated companies or 70% more in interest.

Construction delays at these data facilities could push out the time it takes before they can start generating revenue from their leases to AI companies. Investors worry about a glut of unneeded data centers and leading to defaults on the debt to build the buildings holding all the chips.

Will Smith, a portfolio manager at AllianceBernstein, not we have to be much more pessimistic and not buy into the hype.

Equity investors have unlimited upside for a company and its stock price to grow and keep rewarding their investment. Debt investors want to get their money back. If everything goes well and stock prices go up, bond investors do not benefit, that is why they are more focused on the downside.

Companies looking to finance the next leg of AI infrastructure have borrowed $100 billion in 2025 according to Refinitiv. Some of the money came from the large players such as Amazon who borrowed $15 billion for AWS.

Smaller companies such as Wulf Compute, a subsidiary of Terawulf Inc raised $3.2 billion. The company was a bitcoin miner and has expanded into building data centers. Wulf Compute is paying 7.75% until the deal comes due in 2030. A similarly rated issuer would pay 5.5%.

The smaller companies bring debt deals have either data-center builders or renters such as CoreWeave Inc.. CoreWeave rents the data centers and puts in high-powered computer systems to run large AI models for hyperscalers such as OpenAI and Meta Platforms.

Applied Digitial is heavily dependent on CoreWeave as its main tenant. CoreWeave rents its computing powers to companies such as Meta, OpenAI and Microsoft.

CoreWeave raised $1.75 billion received a rating agency of a single B and a 9% interest rate. The stock is up 70%, but the debt is trading at 90 cents on the dollar. Generally single B rated companies trade at 7% yield.

Linking to dividend paying stocks, whenever there is hype in the stock market, look to the bond market and what does it tell you. Given the complexity of the market, there is always hype somewhere and some of those returns will want you to invest. What does the bond market tell you about those companies? have you determined which company is the best of the breed or will lose you less money. Every industry has cycles, just as stocks will go up and down, sometimes there is value, but you must do your homework first.

There are more questions than answers, till the next time – to raising questions.

Every day the sun shines and in some places around the world, it is either sunny or cloud but always the sun shines. If the sun shines then it is possible to make money from the sun.

In an article by Somini Sengupta of the New York Times News Service, one place where the sun shines is South Africa. The country has been one of the leading economy countries in Africa because of its great mineral wealth.

That economic might means power generation and for years it has been Eskom. However, for a few decades the company has been mismanaged, but people now have an alternative – solar energy.

Thanks to China and its commitment to be the world leader in renewables, the prices of solar panels has dropped and it is feasible to install them. In South Africa, solar has risen from almost 0% to 10% of South Africa’s electricity-generating capacity.

When President Trump imposed tariffs on China, the Chinese went looking for new markets and that includes Africa, where 600 million people lack reliable electricity. Across the continent, solar imports from China rose 50% for the first months of 2025, according to Ember, a British energy-tracking group.

South Africa was the largest destination of solar, but not the only one. Sierra Leone imported the equivalent of more than half its total current electricity-generating capacity.

China through state-owned Power China is building utility-grade solar farms in South Africa. They are also bidding on contracts to add 8,700 miles of transmission lines in South Africa, because according to South Africa’s deputy minister for electricity and energy, Samatha Graham-Mare, we do not have the upfront costs to expand the grid. China does.

In South Africa, every kilowatt generated privately owned solar installation is a hit to the bottom line of the Eskom’s coal-burning plants which are old and in poor shape.

In the past 5 years, South Africans installed solar panels representing more than 7 gigawatts or about 1/10 of the total installed capacity of 55 gigawatts.

Eskom has removed onerous licensing requirements on private installations. It has allowed people to sell power to the grid. Eskom is planning to build large solar arrays on the grounds of its shuttered coal plants.

In theory, the solar panels could be made in South Africa, but they are made in China which means the manufacturing jobs are in China. The trade deficit with China continues to grow, while the US imposed tariffs on South African goods.

Linking to dividend paying stocks, if alternatives are viable, people will use alternatives. The task of the profit making company is to ensure the alternatives are limited. With changes in technology, how long will it last?

There are more questions than answers, till the next time – to raising questions.

If you listen to politicians China is the biggest threat to the US and President Trump imposed various tariffs on the country. Some were high, some were delayed, some stayed and similar to most people China is somewhere between a threat and friend. If you owned a company or invested in a company doing business with China, is that good or bad?

In an article from Reuters, Meta Platforms Inc announced it will acquire a Chinese-founded artificial-intelligence startup called Manus. Financial terms were not disclosed but Manus is value between $2 and $3 billion.

Manus went viral earlier in the year when it released what it claimed was the world’s first general AI agent, capable of making decisions and executing tasks autonomously, with less prompting that AI chatbots such as ChatGPT and DeepSeek.

With all the political talk about China, Manus moved its headquarters from China to Singapore.

Meta will operate and sell Manus service and integrate it into its consumer and business products.

Earlier in 2025, Manue backed by its parent Beijing Butterfly Effect Technologies raised $75 million at at a valuation of $500 million with US venture fund Benchmark leading the funding round. Other investors according to PitchBook include HSG formerly known as Sequoia Capital China, ZhenFund and Tencent Holdings.

Linking to dividend paying stocks, politicians have a say, but commerce moves the world. Wherever there is a good idea, commerce will learn about it and use it no matter what country it comes from. It is usually in the best interest of the company that it works with whatever government is in power, but commerce will win out.

There are more questions than answers, till the next time – to raising questions.

In the world of business often the first to the market gets most of the spoils. In the industry of car vehicles, the brand Tesla was one of the first EVs made and shortly after they came out, the cars were made better. If you rode in one, you have would enjoy riding in it, but maybe not want to pay the cost of owning one. The governments of the day introduced tax credits to lower the cost of the car and Tesla ended up as the best-selling EV vehicle. But every industry has competitors.

In an article by Paul Harloff and Bernard Condon of Associated Press, Tesla has lost the crown of the world’s largest selling electric-vehicle maker. Some of the reasons sales are down include the owner’s political actions, expiring US tax breaks and overseas competition.

Tesla said it delivered 1.64 million vehicles in 2015, down 9% from a year earlier.

Chinese rival BYD, sold 2.26 million vehicles. (apparently prices of EVs in China are falling and BYD and other Chinese EVs make greater margins and profits by exporting cars). The number one export market worldwide is Mexico and its appeal for low-cost vehicles.

If you own Tesla shares you need to be a big believer in the future lies with driverless robotaxis; energy-storage business and building robots for home and factory. The owner of Tesla Elon Musk is set to sell shares of his rocket company SpaceX.

Mr. Musk said he hopes software updates to Tesla cars will enable hundreds of thousands of Telsa vehicles to operate autonomously with zero human intervention by the end of the year. There are also plans to begin production of an AI-powered Cybercab with no steering wheel or pedals.

Linking to dividend paying companies, for years Tesla dominated at the high end of the EV market which meant the competition of Cadillac, BMW, Mercedes and others brought out EV vehicles. With the adoption and the infrastructure, it has been there is a demand for lower priced EVs and the Chinese manufacturers are sending EVs around the world in record numbers. Every market has the high-end and low-end and a wide variety of companies competing in both sides. When you make your investments, ideally you want some sort of barrier to entry which allows the company to make profits and reward you with dividends.

There are more questions than answers, till the next time – to raising questions.

Every geographic area has its assets and if you live in the area, you will soon find them and begin to treasure them. To make an income often requires the exporting of goods to other places or to bring in people to the area or a combination of both. If the place becomes too popular, which is a good thing for the economy, the locals think about times when it was not the place to be. There are cycles, a town which has not seen any significant activity for generations is rediscovered because the buildings were built in a different era and people visit. There are many reasons why cycles happen, sometimes politics adds a dimension.

In an article by Jeffery Collins of the Associated Press, if you think bourbon, you think of Kentucky products. 95% of all bourbon made in the US comes from Kentucky. The trade group estimates the industry brings more than 23,000 jobs and $2.2 billion to the state.

The number bourbon brand is Jim Beam and it takes at least 4 years of aging in barrels before being bottled. At the present time. there were 16 million barrels of bourbon aging in Kentucky warehouses, more than triple the amount held 15 years ago.

When President Trump introduced tariffs to every country in the world, the world leaders asked what product is primarily in a Republican state that is imported into their country? One of the answers is bourbon. In the April to June quarter, bourbon exports fell 85% in Canada and over 50% in Europe.

Jim Beam has a number of distilleries in Kentucky, the largest in Boston, Kentucky, has decided to halt production at its Clermont location. The bottling and warehouse remain open as well as the James B Bean Distilling Co visitor center and restaurant. At the moment, because Jim Beam can make improvements to the line, there are no layoffs at the present time.

Linking to dividend paying stocks, in business the hard part is the customer and ensuring customer needs and expectations are met. The easy part is supposed to be politicians because people who work tend to vote. If politicians do their best to partner with business, business leaders can worry about customers. Similar to economic cycles, sometimes governments help and sometimes they do not.

There are more questions than answers, till the next time – to raising questions.

All countries around the world wish to control their destiny, but in reality someone has to provide capital inflows. Capital will flow to any country which investors believe they can receive both short term and long-term returns. The longer the investment period, the greater the desire that the government is a willing partner for the business.

In an article from the Associated Press, recently there was an election in Bolivia and it changed from socialist to center right. The socialist administration had very particular expectations for companies and most of them started with distrust of foreign companies. The new administration of President Paz starts with the expectation, foreign companies can be helpful to the Bolivian economy.

The decree by the President will allow global satellite internet companies such as Starlink or Kuiper to provide access across the Andean nation as it tries to upgrade its technology and speed up its notoriously slow connectivity rates.

The President has also allowed more capital to flow into natural resources such as tin, silver and copper mining exploration companies.

Linking to dividend paying companies, because many tend to have global reach the ideal is to go into a country which welcomes foreign investments or flow of capital. Once that is done the company will need to ensure on balance that welcoming stays as welcome and try to do all the correct things to be a good citizen of the country. For investors, welcoming free flow of capital is the start of a good thing.

There are more questions than answers, till the next time – to raising questions.

President Trump signature slogan is America First and many in the US would agree with the slogan. However, there is a balancing act with the slogan because the President believes companies should make the goods in the US and sell to other countries around the world which is why he imposed tariffs. Think about the concept, why would the other companies buy the US brand rather than the local or homemade brand?

In an article by Nicholas P. Brown and Juveria Tabassum of Reuters, Nike is based in Oregan and if you ever owned them is a good shoe to own, they also sell branded sportswear, with the swoosh on it. Nike sells to countries around the world, it typically does the design in the US and makes the shoes in Southeast Asia.

China accounts for 15% of Nike’s annual revenues. Second quarter footwear sales dropped 21% in China and CEO Elliot Hill said we need to reset our approach to the China marketplace.

Mr. Hill has been trying to restructure the company by refreshing the offerings and cut legacy lifestyle lines. Instead, margin pain is mounting, 2nd quarter gross margins fell about 300 basis points, hit by tariff costs and a glut of obsolete inventory.

In the US, Nike has multi-channels to sell their products, in China brands commonly operate their own stores instead of selling through 3rd party retailers.

On the digital side, sales were down 36% competing against brands such as Anta and Li-Ning.

CEO Hill noted we firmly believe our growth will come through sport, but the reality is we have become a lifestyle brand competing on price in China.

Morningstar analyst noted Nike gets some benefit of the doubt, at least for a couple quarters because sales in America were not that good when Mr. Hill took over, but the results have gotten better.

Recently Apple CEO Tim Cook bought a few million dollars in shares and Nike shares jumped up.

Linking to dividend paying stocks, companies have many strengths and if they are in retail they must have what consumers want and willing to buy, not what they have in inventory. That line makes retailer a tough market, but if you do it well, margins increase and profits come along. The other issue for retail is goodwill and that is where politics come along, sometimes it helps and sometimes it does not.

There are more questions than answers, till the next time – to raising questions.