• Category Archives Energy
  • WTI Tumbles Towards $45 Handle After Tanker-Tracker Signals OPEC Supply At 2017 Highs

    Despite the ‘bullish’ inventory data (and demand), WTI Crude just sank towards a $45 handle – red on the week – as tanker-tracking firm Petro-Logistics signals OPEC crude supply rising again this month will be the highest this year (along with US shale output at record highs).
    As Bloomberg notes, supply from OPEC members is set to exceed 33 million barrels a day this month, more than 600,000 barrels a day higher than the first-half average, according to Petro-Logistics. The data could reinforce skepticism about the effectiveness of the Organization of Petroleum Exporting Countries’ production cuts as officials from the group gather for meetings in St. Petersburg, Russia.
    This pushed prices below the pre-DOE data lows…and red for the week.

    This post was published at Zero Hedge on Jul 21, 2017.


  • Another Day, Another V-Shaped Panic-Buying Spree in Crude Oil

    Suuposedly catalyzed this time by EIA forecast production cuts, WTI crude has spiked off an early tumble for the 3rd day in a row, running stops above $45. It appears the algos missed the fact that EIA also cut its price forecasts for the next two years, cut demand growth estimates, and confirmed OPEC production is higher than expected…
    The trigger – apparently:
    *EIA LEAVES 2017 U. S. CRUDE OUTPUT ESTIMATE UNCH AT 9.33M B/D *EIA CUTS 2018 U. S. CRUDE OUTPUT ESTIMATE TO 9.9M B/D FROM 10.01

    This post was published at Zero Hedge on Jul 11, 2017.


  • Why Crude Oil Trades So Poorly

    Crude oil is the new widow maker. It trades heavier than a wet dawg in a New York thunderstorm. Rallies have no legs and its seems the only bid these days are the shorts with their family jewels caught in a vice grip.

    This post was published at Zero Hedge on Jul 9, 2017.


  • Dilbert Creator Suggests Novel Solution To The North Korea Situation

    I have some spare time this morning so I thought I would solve the North Korean nuclear threat problem.
    The current frame on how all sides are approaching the problem is a win-lose setup. Either North Korea wins – and develops nukes that can reach the mainland USA – or the United States wins, and North Korea abandons its nuclear plans, loses face, loses leverage, and loses security. Our current framing of the situation doesn’t have a path to success.
    So how do you fix that situation?
    First we must acknowledge that a win-lose model has no chance of success in this specific case because North Korea responds to threats by working harder to build nukes. That’s no good. You need some form of a win-win setup to make any kind of deal. That’s what I’m about to suggest. And by winning, I mean both sides get what they need, even if it isn’t exactly what they said they want.

    This post was published at Zero Hedge on Jul 7, 2017.


  • US Trade Stalls, Too

    This is a syndicated repost courtesy of Alhambra Investments. To view original, click here. Reposted with permission.
    US imports rose year-over-year for the seventh straight month, but like factory orders and other economic statistics there is a growing sense that the rebound will not go further. The total import of goods was up 9.3% in May 2017 as compared to May 2016, but growth rates have over the past five months remained constrained to around that same level. It continues to be about half the rate we should expect given the preceding contraction.
    Though price effects are tailing off, there was again a large base effect distortion from crude oil. US imports were up significantly again in May, by 41.8%, meaning that imports ex petroleum rose by just 4.8%. For the five months of 2017 so far, non-crude imports have grown by just 5% over the same period in 2016. That’s far too much like 2013 and 2014.

    This post was published at Wall Street Examiner by Jeffrey P. Snider ‘ July 6, 2017.


  • Why The Wall Street Journal Is Wrong About The US Oil Export Boom

    The lead editorial in Friday’s Wall Street Journal was pure energy nonsense.
    ‘Lessons of the Energy Export Boom’ proclaimed that the United States is becoming the oil and gas superpower of the world. This despite the uncomfortable fact that it is also the world’s biggest importer of crude oil.
    The Journal uses statistical sleight-of-hand to argue that the U. S. only imports 25% of its oil but the average is 47% for 2017. Saudi Arabia and Russia – the real oil superpowers – import no oil.
    The piece includes the standard claptrap about how the fracking revolution has pushed break-even prices to absurdly low levels. But another article in the same newspaper on the same day described how producers are losing $0.33 on every dollar in the red hot Permian basin shale plays. Oops.

    This post was published at Zero Hedge on Jun 20, 2017.


  • New Jersey Emergency Alert System ‘Accidentally’ Sends Nuclear Warnings To Some TVs

    Coming just a month after Project Gotham Shield, a major nuclear detonation drill in the New York-New Jersey area, a false alarm that went out to some people’s television sets Tuesday might have scared some in New Jersey.
    As NBC New York reports, a nuclear power plant warning issued in Cumberland and Salem counties was sent out by mistake.
    The message that was sent out said ‘a civil authority has issued a nuclear power plant warning for the following counties/areas.’

    This post was published at Zero Hedge on May 24, 2017.


  • OPEC “In Terrible Bind” As Monitoring Committee Proposes Nine-Month Extension

    In the end, the OPEC Vienna meeting – which technically won’t conclude until tomorrow – was anticlimatic, with the recommendation by Joint OPEC-Non-OPEC Ministerial Monitoring Committee in line with what was “trial ballooned”, and leaked in advance:
    The JMMC considered several scenarios presented by the JTC regarding the extension of the Declaration of Cooperation and decided to recommend that the production adjustments of the participating countries be extended for nine months commencing 1 July 2017. In this regard, the JMMC should continue monitoring conformity levels as well as market conditions and immediate prospects, and recommend further adjustment actions, if deemed necessary.

    This post was published at Zero Hedge on May 24, 2017.


  • WTI/RBOB Pop-n-Drop After Mixed Inventory Data

    More OPEC jawboning and continued (modest) draws in crude inventories beat production increases and SPR sales headlines heading into tonight’s API data and with inventory drawdowns across the entire crude complex sending both WTI & RBOB prices jumped higher. However, prices quickly reversed lower as traders realized the Crude draw was smaller than expected…
    API
    Crude -1.5mm (-2mm exp) Cushing -210k Gasoline -3.15mm (-1.08mm exp) Distillates -1.85mm The 7th weekly draw in crude inventories in a row (but it was smaller than expected). Gasoline continued to draw…

    This post was published at Zero Hedge on May 23, 2017.


  • Lower 48 Production Nears Cycle Highs As Rig Count Rises For 18th Straight Week

    While much was made of this week’s drop in US crude production, it was driven by an Alaskan supply drop, not the Lower 48 whose production is at Aug 2015 highs. WTI back above $50 on the back of more OPEC jawboning appears to have everyone convinced this time is different, but for the 18th week in a row US oil rig counts rose (by 8 to 720).
    *U. S. OIL RIG COUNT +8 TO 720 , BAKER HUGHES SAYS :BHI US *U. S. GAS RIG COUNT 180 , BAKER HUGHES SAYS :BHI US The 18th weekly oil rig count rise…

    This post was published at Zero Hedge on May 19, 2017.


  • Why OPEC Lost The War Against Shale, In Four Charts

    Undeterred by earlier failure to jawbone the price of oil higher, moments ago a new barrage of headlines hit courtesy of Reuters reiterating more of the same, and adding a new spin, namely that this time around the oil production cut being considered will last nine not six months, continuing at least through the end of Q1 2018.
    OPEC, NON-OPEC OIL PRODUCERS CONSIDERING EXTENDING GLOBAL SUPPLY CUT FOR NINE MONTHS OR MORE – SOURCES IN OPEC, INDUSTRY As Reuters adds, OPEC and non-member oil producers are considering extending a global supply cut for nine months or more to avoid a price-sapping output increase in the first quarter of next year, when demand is expected to be weak. OPEC countries including core Gulf members are discussing internally whether an extension of nine months or longer is needed to give the market more time to rebalance, the sources said. One industry source familiar with the talks said there had been discussions about extending curbs until the end of the first quarter of 2018, when crude demand should be seasonally weak.
    “To increase production in those months may have a negative impact (on prices). So we may ask for an extension until the end of Q1 of 2018,” the source said.

    This post was published at Zero Hedge on May 8, 2017.


  • “A Complete Mess” – China Stocks, Bonds, Commodities Crumble As Trade Data Disappoints

    The forced deleveraging of China’s WMP-driven excess was not helped overnight by disappointing trade data as both import and export growth slumped.
    April Imports grew at just 11.9% YoY (in USD terms), dramatically less than the 18.0% expectations and well down from March’s 20.3% growth.
    April Exports grew at 8.0% YoY (in USD terms), less than half the growth of March (16.4% YoY) and well below the 11.3% expectations.
    Bad news also hit the energy space after Saudi officials desperately triued to talk up OPEC production cut deal extensions, China’s trade data showed a collapse in oil demand in April (down almost 12%)…

    This post was published at Zero Hedge on May 8, 2017.


  • Hedge Funds Just Liquidated The Most Oil Longs Ever

    When one of the world’s largest oil hedge funds announced it had liquidated its entire long position, we suggested he would not be alone… and according to the latest CFTC data, he was not.
    The last two weeks have seen hedge funds liquidate over 120,000 WTI crude futures contracts (120 million barrels worth or approximately $6 billion notional).

    That drop is the largest ever recorded by CFTC and drops the managed money net speculative positioning to its least bullish since November’s OPEC production cut deal was agreed..

    This post was published at Zero Hedge on May 6, 2017.


  • Lackluster Trade

    This is a syndicated repost courtesy of Alhambra Investments. To view original, click here. Reposted with permission.
    US imports rose 9% year-over-year (NSA) in March 2017, after being flat in February and up 12% in January. For the quarter overall, imports rose 7.3%, a rate that is slightly more than the 2013-14 comparison. The difference, however, is simply the price of oil. Removing petroleum, imports rose instead 6.3% in March and just 4% for the first quarter overall. The value of inbound crude oil expanded by more than 70% for the second straight month.

    This post was published at Wall Street Examiner by Jeffrey P. Snider ‘ May 5, 2017.


  • As Oil Flash Crashes, One Trader Says The Commodity Selloff Is “The Single Largest Macro Factor” Right Now

    It was a very ugly night for the Andy Halls, Pierre Andurands and other crude longs, after oil flash crashed just before midnight ET, dragging WTI from above $45/bbl to below $44 in seconds on a surge in volume, to the lowest price since OPEC agreed to cut output in November.
    As shown in the chart below, in less than 10 minutes futures slumped more than $1 as volume surged 14 times.

    And while WTI eventually rebounded from its overnight snap, and was back above $45, putting this week’s rout in context, oil prices have collapsed by more than 10% %, sliding to lowest since Nov. 15, or two weeks before OPEC signed 6-month deal to curb production aimed at easing global glut. The decline has been driven by expanding U. S. output before OPEC is set to decide whether to prolong its cuts.

    This post was published at Zero Hedge on May 5, 2017.


  • Oil Fireworks Unsettle Global Markets Ahead Of Payrolls Report

    With all eyes on crude, following last night’s mini flash crash which sent WTI lower by 3% from just above $45 to under $43 in under 10 minutes, equity markets, generally quiet overnight, have taken on a secondary importance ahead of today’s key risk event, the April payrolls report (full preview here). In global equities, Asian and European stocks are lower, while S&P futures are little changed.
    The main in the overnight session was oil’s sudden slide below $45 a barrel for the first time since OPEC agreed to cut output in November. As noted earlier, in less than 10 minutes on Friday, U. S. futures slumped more than $1 amid a surge in volume, launching a modest scramble into safe haven assets such as Treasurys, yen and gold. They have collapsed 8.6 percent this week, erasing all gains since the Organization of Petroleum Exporting Countries signed a six-month deal in November to curb production and ease a global glut.

    Things only began to stabilize when Saudi Arabia’s OPEC chief did the usual jawboning routine, hitting the wires in European hours and saying there was a growing consensus among oil pumping countries that they needed to continue to “rebalance” the market. Specifically, the Saudi OPEC governor’s comments that: “A six-month extension (to production cuts) may be needed to rebalance the market, but the length of the extension is not firm yet.” Which while nothing new, provided a floor to the overnight dump and a signal to BTD.

    This post was published at Zero Hedge on May 5, 2017.


  • Black Gold Bloodbath – WTI Crude Crashes To $45 Handle, 9-Month Lows

    “Someone’s liquidating” warns one veteran energy trader as the sudden heavy volume surge to the downside in WTI crude futures smashes oil prices back to the lowest since August 2016.
    Surging US crude production (once again to August 2015 highs)…

    This post was published at Zero Hedge on May 4, 2017.


  • Here’s What Oil Did Today and Over the Past Three Weeks

    With a long list of culprits.
    The price of oil plunged nearly 5% today. West Texas intermediate is now at $45.41, down $2.41 per barrel. It has been a wild ride since April 12, when it still traded at $53 and the industry was talking about $60. Over the past three weeks, it has plunged 15%. It is now at the lowest level since November 30, when OPEC agreed to cut production.
    This chart shows the plunge over the past three weeks in five-hour increments:

    This post was published at Wolf Street by Wolf Richter ‘ May 4, 2017.