OPEC, Russia Said To Announce Oil Pact Extension On Nov 30

Authored by Tsvetana Paraskova via OilPrice.com,
Saudi Arabia and Russia have agreed that OPEC and non-OPEC allies should announce an extension of the cuts at the highly-anticipated meeting in Vienna on November 30, Bloomberg reported on Friday, quoting people involved in the talks.
Recent OPEC/non-OPEC oil pact chatter had it that Saudi Arabia was pushing for an announcement of the cuts extension next week in Vienna, while Russia was more hesitant about telling the market on November 30 how the participants in the deal would act. Russia appeared to be stalling and playing for an announcement to be issued closer to the current expiration deadline of the deal, March 2018.
According to Bloomberg’s sources, now Russia and Saudi Arabia have agreed on the need to announce some sort of a deal next week, but Russia has insisted on additional phrasing in the extension deal that would link the size of the cuts to the state of the oil market.

This post was published at Zero Hedge on Nov 26, 2017.

Russian Anger Builds In Town Next To Leaking Nuclear Plant

Earlier this week, we noted that Russia’s state-owned nuclear energy agency had taken baby steps toward recognizing the dangers posed by an aging nuclear storage facility in Chelyabinsk, a town located on Russia’s southern border with Kazakhstan, when it officially acknowledged the extraordinary high levels of radiation in the area. Though the government refused to admit culpability, as many believe the radiation leaked out of the Mayak nuclear power plant, which has a history of serious nuclear accidents.
Still, a month after the mysterious radiation cloud was first observed over Europe, Russian authorities have said little other than admitting the spike in radiation – a troubling trend that’s making some locals nervous and angry.
As the Financial Times points out, 76 years after radiation first began seeping from Mayak into the surrounding rivers, lakes and atmosphere, Russian authorities admitted that the nearby town of Argayash was at the center of a radiation cloud containing ‘exceptionally high’ levels of radioactive isotope ruthenium-106, which spread so far west that it reached France.
But residents of the town are demanding more information from authorities, whom they blame for putting the health of locals at risk.
The FT described Argayash is a cynical, mistrustful town. Apparently, decades of being lied to by the government about being down the road from a leaking nuclear plant does that to a place. So too does watching generations of people dying of radiation-related ailments while officials assure them nothing is amiss.

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

Is $40 WTI Now More Realistic Than $60?

Authored by Tsvetana Paraskova via OilPrice.com,
The current rise in oil prices is more of a fear trade right now, driven by fear of what is going on in the Middle East, rather than a result of growing OPEC chatter or inventory reports, Todd Horwitz, chief strategist at Bubbatrading.com, told Bloomberg on Wednesday.
‘The oil premiums are very narrow going out to the future, which means that this is more of a fear trade in the front month,’ Horwitz said on ‘Bloomberg Markets’. ‘To me, this is more of just another farce of what OPEC is trying to do, and trying to push these prices higher,’ the strategist noted.
OPEC and its non-OPEC partners in the production cut deal are scheduled to meet in Vienna on November 30 to discuss the extension of their pact.

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

Shale Hedges Threaten Oil Rally

Surge in hedging puts downward pressure on the oil futures curve. By Nick Cunningham, Oilprice.com: The 20 percent increase in oil prices since September led to a wave of hedging by U. S. shale drillers eager to lock in future production at prices not seen in years. The flip side of that hedging wave is that locking in prices could cut the price rally off at the knees, ensuring that more supply will be forthcoming in the next few quarters.
Shale drillers were hesitant for much of the year, but kicked their hedging programs into high gear after oil prices posted strong gains beginning in September. ‘The past three months have seen a significant increase in oil hedging, with the volume of new positions more than twice the volume of Q3 hedges that rolled off the books,’ Standard Chartered wrote in a recent research note.

This post was published at Wolf Street on Nov 24, 2017.

WTI/RBOB Slide After Smaller Than Expected Crude Draw, New Record High Production

With WTI at its highest since July 2015, vol at 8mo lows, and the front-end flipped into backwardation for the first time since Nov 2014, it appears a lot of hope is priced into continued equlilibration (and OPEC). Last night’s API (crude draw) provided some more confirmation but this morning’s DOE data disappointed with a smaller than expected crude draw, and production rose once again to a new record high.
‘Domestic production is going to be the big nugget that everybody will be racing to see, in terms of whether those levels continue to rise or not,’ John Kilduff, a partner at Again Capital, says.
‘They likely will, so that can be a counter-balance to the drawdown’

This post was published at Zero Hedge on Nov 22, 2017.

Slaughterbots — Meh

The stupid, it burns!
A UC Berkeley computer science professor helped to create a video that imagined a world where nuclear weapons were replaced by swarms of autonomous tiny drones that could kill half a city and are virtually unstoppable.
Stuart Russell, the professor, said these drones are already a reality.
Meh.
This so-called “professor” needs to be taken out into San Francisco Bay where there are sharks and tossed overboard for this horse**** stunt.
Let me explain.
Yes, it is trivial, even today, to create a small drone that can “pierce” someone’s skull. You can quite-trivially recognize a “head” and aim at it, along with striking it. You don’t even need a lot of forward speed since the attack can come from above, using gravity, and with a small enough “snout” the amount of kinetic energy required is pretty small too.

This post was published at Market-Ticker on 2017-11-22.

Russia Confirms Toxic Cloud Of “Extremely High” Radiation; Source Remains A Mystery

This Part of Russia is Literally Exposed to 1000x the Normal Radiation Rate pic.twitter.com/AKbOJqUrhh
— News Cult (@News_Cult) November 21, 2017

One month after a mysterious radiation cloud was observed over Europe, whose source remained unknown last week speculation emerged that it may have been the result of a “nuclear accident” in Russia or Kazakhstan, on Tuesday Russian authorities on Tuesday confirmed the previous reports of a spike in radioactivity in the air over the Ural Mountains. In a statement, the Russian Meteorological Service said that it recorded the release of Ruthenium-106 in the southern Urals in late September and classified it as “extremely high contamination.”
Earlier this month, France’s nuclear safety agency earlier this month said that it recorded a spike in radioactivity, and said that “the most plausible zone of release” of this radioactive material “lies between the Volga and the Urals” from a suspected accident involving nuclear fuel or the production of radioactive material. The agency noted, however, that it is impossible to determine the exact point of release given the available data. Luckily, it said the release of the isotope Ruthenium-106 posed no health or environmental risks to European countries.

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

Nebraska Regulators Approve Keystone Pipeline Route Days After South Dakota Leak, Shutdown

TransCanada received its final required pipeline route approval, winning Nebraska’s permission to build its long-delayed Keystone XL crude oil pipeline across the state… just days after a 5,000 barrel spill in South Dakota shut the pipeline.
The decision will almost certainly be challenged in court.
Just a few short days after 210,000 gallons of crude oil spilled in South Dakota, Bloomberg reports that Nebraska’s Public Service Commission voted three to two Monday, removing one of the last hurdles to the Calgary-based company’s construction of the $8 billion, 1,179-mile conduit (1,897-kilometer), which has been on its drawing boards since 2008.
For those who aren’t familiar with the project, the pipeline links Canada’s Alberta oil sands to U. S. refineries. While a portion of the pipeline has been operating, part of it had still not been approved by state regulators… until today’s decision by Nebraska.

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

100 billion reasons to have non-reportable assets

In early March 1938 in a dusty corner of the Arabian desert, Max Steineke finally had the breakthrough he was hoping for.
Steineke was the chief geologist for the California Arabian Standard Oil Company (CASOC), a venture owned by what we know today as Chevron.
And he hadn’t had a lot of success despite years of effort.
Steinke was convinced that massive oil reserves were beneath the sands. He just couldn’t find any.
His prized oil well, what was called Dammam #7, had been riddled with mishaps, accidents, and delays, and it was costing the company a LOT of money.
Steinke was about to be shut down when, finally, on March 4, the well started gushing. And Saudi Arabia was never the same.

This post was published at Sovereign Man on November 20, 2017.

Huge Crude Stakes

This is a syndicated repost courtesy of Alhambra Investments. To view original, click here. Reposted with permission.
There is a titanic struggle going on right now in the oil market. On the one side of the futures market are the usual pace setters, the money managers. Last week, the latest COT data available, they went the most net long since March. If it continues, it will close in on the most positive futures position since the record long they established back in February.
Normally that would be insanely bullish for oil prices. But just as in February/March another part of the futures market has intervened on the other side. Back then it was the oil producers who rising inventory forced into a larger and larger offsetting net short (hedge).
This time, however, it is the swap dealers who are short for reasons that aren’t really clear. The weekly COT report for the last week in October showed a record net short for dealers, just beating their most extreme position from the middle of 2013 at -424k contracts. In the first week and November, they blew away that record at -470k.

This post was published at Wall Street Examiner by Jeffrey P. Snider ‘ November 16, 2017.

Solid Sales Growth and Margins at New Highs Drive 3Q17 Results

Summary: For the third quarter (3Q17), S&P earnings rose 12% yoy, sales grew 6% and profit margins expanded to new all-time highs.
These strong results are not due to the rebound in oil prices. Sales for the sectors with the highest weighting in the S&P have grown an average of 7% in the past year and 19% in the past 3 years. Moreover, margins outside of energy have expanded to a new high of 10.8%.
Bearish pundits continue to repeat several misconceptions: that “operating earnings” are deviating more than usual from GAAP measurements; that share reductions (buybacks) are behind most EPS growth; and that equity gains are unreasonably out of proportion to earnings growth. None of these are correct. Continued growth in employment, wages, and consumption tell us that corporate financial results should be improving, as they have in fact done.
Where critics have a valid point is valuation: even excluding energy, the S&P is now more highly valued than anytime outside of the late 1990s technology bubble. With economic growth of 4-5% (nominal) and margins already at new highs, it will take excessive bullishness among investors to propel S&P price appreciation at a significantly faster rate. At this point, lower valuations are a notable risk to equity returns.
92% of the companies in the S&P 500 have released their 3Q17 financial reports. The headline numbers are good. Overall sales are 6% higher than a year ago, the second best growth rate in nearly 6 years. Earnings (GAAP-basis) are 12% higher than a year ago. Profit margins are at a new high of 10.2%, exceeding the prior peak from 2014.

This post was published at FinancialSense on 11/16/2017.

Venezuela Signs $3.2 Billion Debt Restructuring Deal With Russia

As Venezuela teeters right on the brink of complete financial collapse, Bloomberg reports that Russia has agreed to restructure roughly $3.2 billion in outstanding obligations. While details of the restructuring agreement are scarce, both sides reported that the deal spreads payments out over 10 years with minimal cash service required over the next six years.
Russia signed an agreement to restructure $3.15 billion of debt owed by Venezuela, throwing a lifeline to a crisis-wracked ally that’s struggling to repay creditors.
The deal spreads the loan payments out over a decade, with ‘minimal’ payments over the first six years, the Russian Finance Ministry said in a statement. The pact doesn’t cover obligations of state oil company Petroleos de Venezuela SA to its Russian counterpart Rosneft PJSC, however.

This post was published at Zero Hedge on Nov 15, 2017.

Russia’s Alleged Meddling In Catalan Vote: Playing The Blame Game

Marine Corps veteran Tommy Waller, director of special projects at the Center for Security Policy, has warned President Trump about the EMP threat facing the United States.
“Winston Churchill once said, ‘History will be kind to me for I intend to write it’…
The surest way for history to be kind to President Trump is for him to write it, by being the first leader to truly address the existential threat of EMP.
The first and foremost thing he must write is an Executive Order establishing his own EMP Commission in the White House – a task force that draws from the experience of the previous EMP Commission.”
The grim warning is directed at North Korea and their ambitions to unleash a devastating atmospheric nuclear explosion above the United States that would collapse the nation’s power grid.

This post was published at Zero Hedge on Nov 15, 2017.

The White House Is Being Warned: North Korea Is Planning A “Devatstaing EMP Attack” On America

Marine Corps veteran Tommy Waller, director of special projects at the Center for Security Policy, has warned President Trump about the EMP threat facing the United States.
“Winston Churchill once said, ‘History will be kind to me for I intend to write it’…
The surest way for history to be kind to President Trump is for him to write it, by being the first leader to truly address the existential threat of EMP.
The first and foremost thing he must write is an Executive Order establishing his own EMP Commission in the White House – a task force that draws from the experience of the previous EMP Commission.”
The grim warning is directed at North Korea and their ambitions to unleash a devastating atmospheric nuclear explosion above the United States that would collapse the nation’s power grid.

This post was published at Zero Hedge on Nov 15, 2017.

IEA Pours Cold Water On OPEC Optimism, Warns Global Oil Demand Shrinking

Pouring cold water on yesterday’s optimistic demand forecast projected by OPEC, which projected global crude demand growth to rise by 1.5mm b/d in 2018, this morning the International Energy Agency warned that the crude oil price rally could be short-lived because, contrary to OPEC’s expectations, global oil demand will be weaker than expected this year and next. In its closely watched monthly oil report, the IEA cut its crude demand growth outlook by 100,000 barrels a day for 2017 and 2018, as the WSJ reported. The agency now expects demand to grow by 1.5 million barrels a day this year and 1.3 million barrels a day next year.
The IEA predicted that balances will likely show the crude market is oversupplied in Q4 2017 and the first half of 2018, with oil demand in 2017 at 97.7mmb/d, rising to 98.9 million in 2018. Meanwhile, non-OPEC Oil Supply is expected To rise by 700,000b/d In 2017 To 58.1mmb/d, and another 1.4 mmb/d in 2018 to 59.5mm b/d, led by shale output.
The IEA also noted that global oil inventories fell 63mm barrels In Q3, only second quarterly draw since 2014, with the call on OPEC crude seen at 32.6mmb/d in Q4, declining to 32.0mmb/d in Q1 2018.

This post was published at Zero Hedge on Nov 14, 2017.

Technical Scoop – Weekend Update Nov 12

Weekly Update
‘Buy when it snows, sell when it goes’
– old stock market proverb
November traditionally marks the start of the best six months of the year for stock markets. At least, that is what the record shows. The Dow Jones Industrials (DJI) has since 1950 had an average gain of 0.6% from May to October vs. an average gain of 7.5% from November to April. The period November to May has had over three times as many up periods as it has had down periods vs. the period from May to October which had only 1.5 times advantage in ups to down.
Of course, the strategy doesn’t work all of the time. Double-digit returns for the May/October period have occurred eight times since 1950. The most recent was the period just completed from May 1, 2017 to October 31, 2017 when the DJI jumped 11.6%. The best one was a 19.2% gain in 1958. In 2009, the May/October period gained 18.9%. But that was following one of the worst ever November/April periods that saw the DJI fall 12.4%. The November/April period has seen only three occurrences where it lost more than 10%. The most recent was the above-mentioned 2008 period where the DJI fell 12.4% while the other two occurred in 1969 and 1973. Interestingly enough, the first November/April period in 1969/1970 saw the Cambodian invasion while the 1973/1974 period was the OPEC oil embargo and the Watergate crisis.
Since we are just coming off a May/October period that saw double-digit returns it is interesting to look at what happened in the ensuing November/April period. As we noted there have been eight occurrences of double-digit returns for the May/October period. We summarize in the table below.
As can be seen from the table there were no occurrences of the DJI falling in the November/April period following double-digit gains in the May/October period. On five occurrences, the gains were also in double digits. On average, the November/April period saw gains of 14.6% following the May/October period that saw average gains of 14.5%. What all of that suggests is the coming six months could see double-digit gains once again for the DJI and the stock market as a whole.

This post was published at GoldSeek on 12 November 2017.

Chart of the Week: Another Compelling Note of Caution

This is a syndicated repost courtesy of Alhambra Investments. To view original, click here. Reposted with permission.
Leveraged loan prices and WTI tracked each other pretty well during the ‘rising dollar’, unsurprising given that the oil sector was over-represented in most new deals as the one truly booming part of the domestic US economy. That was the case on the rebound, too, where leveraged loan prices rose at the same time oil prices did. And then both started falling again earlier this year in March.
Only leveraged loan prices continued to fall, diverging noticeable from WTI in June/July. With prices still almost two years after the bottom significantly less than before the ‘rising dollar’, it’s an unmistakable note of caution amplified in the diverging trend recently from oil (indicating broader risk concerns than just US shale producers).
It’s a gentle downturn in prices at this point, but a persistent one (eight month so far). The last time this leveraged loan price index diverged so much from WTI? Summer 2013.

This post was published at Wall Street Examiner by Jeffrey P. Snider ‘ November 10, 2017.

Dramatic Footage: Bahrain Oil Pipeline Explodes, Bursts Into Giant Flames

#BREAKING : Huge #fire resulted in a gas pipeline explosion in #Bahrain while ago. (exact cause yet to be confirmed) pic.twitter.com/kAgQ1nJARa
— (@HSajwanization) November 10, 2017

An oil pipeline in Bahrain exploded, and burst into giant fireball, as numerous videos posted on social media showed. According to the Saudi Gazette, an explosion caused a fire in an oil pipeline near Buri village. It adds that no injuries have been reported, and that civil defense teams are extinguishing the fire.
More from Al-bilad Press (google translated):
A large explosion of one of the oil pipelines near the area of ??Buri overlooking the market Waqif, and evacuate all houses near the scene of the explosion. The Waqif market was completely closed so firefighters could control the fire. The Ministry of the Interior through its official account on the site “Twitter” there is no casualties at the scene. It also announced the cutting off of traffic on the Crown Prince’s road towards Hamad City.
The representative of the “country” from the heart of the pipe fire in the village of Buri that a huge fire block devoured a group of cars parked off the village and Souq Waqif.
The delegate added that the civil defense mechanisms rushed to the scene of the incident from the area centered in the village of Damastan and began to block the flames of escalating fire and has been strengthened from the number of other centers.

This post was published at Zero Hedge on Nov 10, 2017.

Radioactive Cloud Over Europe May Have Come From “Nuclear Accident” In Russia Or Kazakhstan

About a month ago, we noted reports from the French nuclear watchdog ISRN that a spike in airborne radioactivity had been detected in the air in Western and Central Europe: “Ruthenium-106 has been detected by several European networks involved in the monitoring of atmospheric radioactive contamination, at levels of a few milliBecquerels per cubic meter of air.”
According to IRSN calculations, the very low levels of atmospheric contamination of ruthenium 106 observed by European monitoring networks had no environmental or health consequences but several agencies across Europe were actively seeking answers on the origin of the contamination.

This post was published at Zero Hedge on Nov 10, 2017.