• Tag Archives Oil
  • You’re Likely A Lot Less Prepared For Crisis Than You Realize

    It seems as if Mother Nature is waking up. Either she’s trying to send humans an important warning, or perhaps she’s just out to kill us all.
    Massive storms across the globe, earthquakes, and collapsing ecosystems all combine to remind us that we are indeed intimately connected to our planet’s natural systems. And that our well-being rests on staying on Mother Nature’s good side.
    Well, Mother Nature has seemed pretty pissed at us of late. Her recent punishments should be taken as a disciplinary wake-up call: It’s time.
    It’s time to prepare, everyone. Way past time.
    And it’s time to recognize that there are multiplying failure points across the many systems we depend on for our way of life — both natural and man-made. For example:
    The wealth gap between the rich and the poor is now grossly obscene and yet still growing wider. Our industrially-farmed soils are being depleted of their nutrients. Species are going extinct every single day. Global oil consumption ticks higher every year. Stock price overvaluation is about the highest it’s ever been. Bonds have never been more expensive (i.e. yields have never been lower) in all of recorded history. Debt levels have never been higher (both globally and, in most cases, locally). The planet’s population continues to explode (7.5 billion today, 10 billion by 2050) while key resources deplete at accelerating rates. Only the foolish, or the seriously self-deluded, would think that these observations and trends will be consequence-free.

    This post was published at PeakProsperity on Friday, September 22, 2017,.


  • WTI Hovers Above $50 As US Oil Rig Count Slides To 3-Month Lows

    With crude production rebounding back to pre-Harvey levels, and refinery demand coming back on-line, WTI has trod water around $50 all week. The US oil rig count dropped for the 6th straight week (down 5 to 744), back at its lowest level since early June.
    *U. S. OIL RIG COUNT DOWN 5 TO 744 , BAKER HUGHES SAYS :BHGE US *U. S. GAS RIG COUNT UP 4 TO 190 , BAKER HUGHES SAYS :BHGE US As Bloomberg reports, it looks like shale billionaire Harold Hamm might be right in saying U. S. producers are being more cautious than government output forecasts seem to imply.
    At least that’s what the Baker Hughes weekly drilling report suggests, showing producers idled five oil rigs this week, adding to 19 parked over the previous five weeks.
    The numbers released every Friday increasingly make it look like the drilling boom might have peaked, and that should impact output down the road.

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


  • Traders Yawn After Fed’s “Great Unwind”

    One day after the much anticipated Fed announcement in which Yellen unveiled the “Great Unwinding” of a decade of aggressive stimulus, it has been a mostly quiet session as the Fed’s intentions had been widely telegraphed (besides the December rate hike which now appears assured), despite a spate of other central bank announcements, most notably out of Japan and Norway, both of which kept policy unchanged as expected.
    ‘Yesterday was a momentous day – the beginning of the end of QE,’ Bhanu Baweja a cross-asset strategist at UBS, told Bloomberg TV. ‘The market for the first time is now moving closer to the dots as opposed to the dots moving towards the market. There’s more to come on that front. ‘
    Despite the excitement, S&P futures are unchanged, holding near all-time high as European and Asian shares rise in volumeless, rangebound trade, and oil retreated while the dollar edged marginally lower through the European session after yesterday’s Fed-inspired rally which sent the the dollar to a two-month high versus the yen on Thursday and sent bonds and commodities lower. Along with dollar bulls, European bank stocks cheered the coming higher interest rates which should help their profits, rising over 1.5% as a weaker euro helped the STOXX 600. Shorter-term, 2-year U. S. government bond yields steadied after hitting their highest in nine years.
    ‘Initial reaction is fairly straightforward,’ said Saxo Bank head of FX strategy John Hardy. ‘They (the Fed) still kept the December hike (signal) in there and the market is being reluctantly tugged in the direction of having to price that in.’
    The key central bank event overnight was the BoJ, which kept its monetary policy unchanged as expected with NIRP maintained at -0.10% and the 10yr yield target at around 0%. The BoJ stated that the decision on yield curve control was made by 8-1 decision in which known reflationist Kataoka dissented as he viewed that it was insufficient to meeting inflation goal by around fiscal 2019, although surprisingly he did not propose a preferred regime. BOJ head Kuroda spoke after the BoJ announcement, sticking to his usual rhetoric: he stated that the bank will not move away from its 2% inflation target although the BOJ “still have a distance to 2% price targe” and aded that buying equity ETFs was key to hitting the bank’s inflation target, resulting in some marginal weakness in JPY as he spoke, leaving USD/JPY to break past FOMC highs, and print fresh session highs through 112.70, the highest in two months, although it has since pared some losses.

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


  • The Low Oil Price Guts Another OPEC Oil Exporter

    The low oil price is negatively impacting another OPEC oil exporter as it continues to liquidate its foreign exchange reserves. Algeria, like Saudi Arabia, has seen its international reserves plummet by more than 40% as the oil price fell in half since 2014.
    Algeria joined OPEC back in 1969 and is currently producing 1.1 million barrels of oil per day (mbd). While Algeria is not one of the larger OPEC members, it still exports roughly 670,000 barrels of oil per day. At $50 a barrel, the country receives $33.5 million a day in oil revenues. However, Algeria’s oil revenues have taken a nose-dive as the oil price declined from over $100 in 2014 to below $50 currently:

    This post was published at SRSrocco Report on SEPTEMBER 20, 2017.


  • Answers Emerge from Harvey-Hit Houston

    Even before Hurricane Harvey, Houston’s economy was struggling.
    Auto sales collapse but will surge. Auto sales in the Houston metro, first battered by the oil bust and now by Hurricane Harvey, plunged to levels not seen since the depth of the Financial Crisis. New vehicle sales were already at Financial Crisis level in the 12 months before the hurricane hit, with dealers selling 284,000 units in the 12-month period, down 25% from the levels in late 2015 and early 2016.
    This was already an ugly reality. Then, just when people thought that sales might finally pick up a little in August, Hurricane Harvey approached. During the week before landfall, new vehicle sales plunged as potential car buyers had other things to worry about. And for the last week of August, when Harvey was pummeling the area, sales dropped to essentially zero.
    So for all of August, new vehicle sales plunged 45.5% from the already beaten down levels last year to just 15,473 vehicles, according to TexAuto Facts, published by InfoNation, and cited by the Greater Houston Partnership.

    This post was published at Wolf Street on Sep 20, 2017.


  • Oil Prices Today Are Finally Rebounding and Will Hit This Target Before 2018

    Oil prices today (Tuesday, Sept. 19) are trading above $50 a barrel, which puts oil on track for its highest closing price since July. And we predict oil prices will head even higher before the end of the year, too…
    WTI crude oil prices are trading at $50.26 a barrel today and are up 3.5% since just last week, when they opened at $48.23 on Thursday.
    Oil prices continue to rebound after Hurricanes Harvey and Irma wiped out demand across the southeast United States. The destruction of pipelines, refineries, and commerce across Florida and the Gulf Coast region meant oil pumped out of the ground was being stored instead of used. That boosted supplies and lowered prices. Commercial crude supplies rose 2.2% between the weeks of Aug. 25 and Sept. 8.
    Oil prices fell 4% between Aug. 25 and Aug. 30 as Hurricane Harvey made landfall in Texas, and they fell 3.2% between Sept. 7 and Sept. 12 as Irma barreled through the Caribbean and Florida.
    Oil prices have struggled to stay above the $50 a barrel mark this year, despite OPEC renewing its oil production cut in May.
    But our oil price forecast shows oil prices will continue to rise in 2017, and one important oil price indicator shows it’s about to happen soon…

    This post was published at Wall Street Examiner by Dustin Parrett ‘ September 19, 2017.


  • The World Is Creeping Toward De-Dollarization

    The issue of when a global reserve currency begins or ends is not an exact science. There are no press releases announcing it, and neither are there big international conferences that end with the signing of treaties and a photo shoot. Nevertheless we can say with confidence that the reign of every world reserve currency has to come to and end at some point in time. During a changeover from one global currency to another, gold (and to a lesser extent silver) has always played a decisive role. Central banks and governments have long been aware that the dollar has a sell-by date as a reserve currency. But it has taken until now for the subject to be discussed openly. The fact that the issue has been on the radar of a powerful bank like JP Morgan for at least five years, should give one pause. Questions regarding the global reserve currency are not exactly discussed on CNBC every day. Most mainstream economists avoid the topic like the plague. The issue is too politically charged. However, that doesn’t make it any less important for investors to look for answers. On the contrary. The following questions need to be asked: What indications are there that the world is turning its back on the US dollar? And what are the clues that gold’s role could be strengthened in a new system?
    The mechanism underlying today’s ‘dollar standard’ is widely known and the term ‘petrodollar’ describes it well. This system is based on an informal agreement the US and Saudi Arabia arrived at in the mid-1970s. The result of this deal: Oil, and consequently all other important commodities, is traded in US dollars – and only in US dollars. Oil producers then ‘recycle’ these ‘petrodollars’ into US treasuries. This circular flow of dollars has enabled the US to pile up a towering mountain of debt of nearly $20 trillion – without having to worry about its own financial stability. At least, until now.

    This post was published at Ludwig von Mises Institute on September 20, 2017.


  • Which Countries Have The Most Economic Complexity?

    As Visual Capitalist’s Jeff Desjardins notes, rvery country has an economy that is unique.
    In some places, such as the United States or Germany, economies are able to produce many different goods and services that get exported around the world. These countries tend to house world-class businesses in sectors like financials, technology, consumer goods, and healthcare, with companies that produce highly specialized goods like automobiles, software, or pharmaceutical products. Ultimately, these are innovative economies that can roll with the punches, creating growth even when prospects are dim.
    In other places, this level of sophistication is just not there. Innovation and knowledge are stunted or non-existent for most industries, and these countries may focus exclusively on one or two goods to pay the bills. Venezuela’s reliance on oil is an obvious example of this, but there are even many Western countries that miss the mark here as well.
    MEASURING ECONOMIC COMPLEXITY In 2009, a team at Harvard formalized a measure of economic complexity that compared nations based on the sophistication of their economies. Now known as the Economic Complexity Index (ECI), the exact measurement is complicated, but it essentially uses data on two main things to uncover the underlying level of economic complexity:
    1. Economic Diversity
    Measures how many different products a country can produce.
    2. Economic Ubiquity
    Measures how many countries are able to make those products.
    In other words: if a country produces only a few goods, that economy is not very complex. Further, if a country produces many different products, but they are all simple ones that can be replicated elsewhere, the economy is still not complex. See full details on the project here.

    This post was published at Zero Hedge on Sep 18, 2017.


  • Algeria Officially Launches Helicopter Money Amid Sliding Oil Revenue, Budget Crisis

    One year ago, the imminent arrival of helicopter money among endless discussions of pervasive lowflation was all the rage within high-finance policy circles. Then, everything changed as if on a dime, and in recent months the dominant topic has been global coordinated tightening – and in some cases even revisions to central bank mandates and the lowering of inflation targets – perhaps as a result of central banks’ realization that monetizing debt by central banks leads to bad outcomes, not to mention global asset bubbles.
    But not everywhere.
    On Sunday, Algeria’s prime minister unveiled a plan to plug the country’s budget deficit as the the OPEC member state looks to offset lower oil revenue by directly borrowing from the central bank, while avoiding international debt markets. In other words, direct monetization of debt, which bypasses commercial banks as a monetary intermediate, and is better known as “helicopter money.”
    According to Bloomberg, the five-year plan presented by Prime Minister Ahmed Ouyahia aims to balance the budget by 2022, and reverse a deficit that ballooned with the plunge in global crude prices, which also cut foreign reserves by nearly half.
    “If we turn to external debt, as the IMF suggests, we will need to borrow $20 billion a year to repay the deficit and within four years we will be unable to repay the debt,” Ouyahia said. ‘This is what made the government look at non-traditional financing.’

    This post was published at Zero Hedge on Sep 17, 2017.


  • Harvey, Irma, Gold and Bad Options

    In the Previous Three Weeks:
    Gold rose over $1,330. Silver reached $18.00. The DOW almost reached another all-time high. Hurricane Harvey slammed into the Texas coast, flooded Houston, and caused massive damage. Hurricane Irma crashed into Florida and created flooding and huge damage, although a late move west reduced potential destruction. China is preparing a crude oil contract that will allow oil exporters to sell their crude on a Chinese exchange and be paid in yuan, which can be sold on a Chinese exchange for gold. This could be very important for the gold market. The Federal Reserve met and … yada yada yada. North Korea and President Trump exchanged pleasantries in their great distraction game. GOLD: Year 1913: Price of gold: $20.67 per oz. U. S. national debt $3 billion. Year 2017: Price of gold: $1,300 per oz. U. S. national debt $20 trillion. The national debt is over 6,000 times larger than in 1913, yet the gold price is just 62 times higher.

    This post was published at GoldStockBull on September 14th, 2017.


  • Government Nearing Default on Debt to Russia

    The government in question is that of Venezuela, which is nearing default as it is running out of resources to pay back the money it owes to its Russian creditors according to the terms it accepted when it chose to borrow money from them.
    MOSCOW, Sept 8 (Reuters) – Russian Finance Minister Anton Siluanov told reporters on Friday that Venezuela is having problems with fulfilling its obligations on its debt to Russia.
    ‘We have a request from our colleagues in Venezuela to do a restructuring,’ Siluanov said.
    Venezuela owed Russia $2.84 billion as of September last year.
    The Venezuelan government is now scrambling to restructure its foreign-held liabilities following sanctions put on the country’s President Nicolas Maduro and 20 other individuals, and also the Venezuelan government-owned oil company by the US Treasury Department after Maduro rigged an election to select representatives to rewrite the country’s constitution in his favor.

    This post was published at FinancialSense on 09/15/2017.


  • Why Saudi Aramco Delayed Its IPO

    Authored by Cyril Widdershoven via OilPrice.com,
    The long-awaited Saudi Aramco IPO, scheduled for mid-2018, could be delayed to 2019.

    International news reports have stated that the Saudi government is currently putting together contingency plans for a possible delay to the biggest IPO ever. The listing of 5 percent of Saudi Arabia’s crown jewel, the world’s largest oil company Saudi Aramco, could bring in around $300-$400 billion, based on a valuation of Aramco at between $1.5-2 trillion. The cash generated by the IPO has already been earmarked for the coffers of the Saudi Public Investment Fund (PIF), to be used as financial support for Saudi Vision 2030, the economic diversification program proposed and pushed for by Crown Prince Mohammed Bin Salman (MBS).

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


  • Suddenly, ‘De-Dollarization’ Is A Thing

    For what seems like decades, other countries have been tiptoeing away from their dependence on the US dollar. China, Russia, and India have cut deals in which they agree to accept each others’ currencies for bi-lateral trade while Europe, obviously, designed the euro to be a reserve asset and international medium of exchange.
    These were challenges to the dollar’s dominance, but they weren’t mortal threats.
    What’s happening lately, however, is a lot more serious. It even has an ominous-sounding name: de-dollarization. Here’s an excerpt from a much longer article by ‘strategic risk consultant’ F. William Engdahl:
    Gold, Oil and De-Dollarization? Russia and China’s Extensive Gold Reserves, China Yuan Oil Market
    (Global Research) – China, increasingly backed by Russia – the two great Eurasian nations – are taking decisive steps to create a very viable alternative to the tyranny of the US dollar over world trade and finance. Wall Street and Washington are not amused, but they are powerless to stop it. So long as Washington dirty tricks and Wall Street machinations were able to create a crisis such as they did in the Eurozone in 2010 through Greece, world trading surplus countries like China, Japan and then Russia, had no practical alternative but to buy more US Government debt – Treasury securities – with the bulk of their surplus trade dollars. Washington and Wall Street could print endless volumes of dollars backed by nothing more valuable than F-16s and Abrams tanks. China, Russia and other dollar bond holders in truth financed the US wars that were aimed at them, by buying US debt. Then they had few viable alternative options.

    This post was published at DollarCollapse on SEPTEMBER 15, 2017.


  • Armstrong Logic?

    I had not planned on penning a public article today but my plans were changed by Martin Armstrong as he again is busy attempting to rewrite history. He is again trying to scare people away from their only financial hurricane insurance, gold …why? Any thinking person knows a credit disaster is coming. Heck, even he has called for a pending financial disaster himself…but gold is not a safe harbor ‘this time’?
    As a reminder of past fallacy, Mr. Armstrong wrote back in September 2015 ‘…’You are doomed if you cling to the idea that gold will rise simply because stocks decline. Gold was DEVALUED in 1934 since gold was MONEY. What it could purchase for $20.67 then cost $35. (this line has since been deleted from his original article) The government confiscated gold and moved to a TWO-TIER monetary system with gold used exclusively for international settlements, not domestic.’ … Martin Armstrong
    The fact is, gold was REVALUED 70% higher versus the dollar (and much more versus other assets) as what previously required $20.67 to purchase one ounce of gold moved to $35. I said at the time, what he wrote could not have been a typo or a mistake, his logic was in reverse and he was trying to rewrite history.
    ==============================================
    Fast forward to present, he is at it again. He recently posted ‘Am I certain about the strong dollar?’ Let’s take a look at a few glaring ‘alterations’ of history and poor logic according to Martin Armstrong.
    His article starts out with ‘You can denominate oil to peanuts in some other currency but that still will never put a dent in the dollar. Why? It is capital flows than count and trade is minimal’.

    This post was published at JSMineSet on September 14th, 2017.


  • Venezuela Has Officially Abandoned The Petrodollar – Does This Make War With Venezuela More Likely?

    Venezuela is the 11th largest oil producing country in the entire world, and it has just announced that it is going to stop using the petrodollar. Most Americans don’t even know what the petrodollar is, but for those of you that do understand what I am talking about, this should send a chill up your spine. The petrodollar is one of the key pillars of the global financial system, and it allows us to live a far higher standard of living than we actually deserve. The dominance of the petrodollar has been very jealously guarded by our government in the past, and that is why many are now concerned that this move by Venezuela could potentially lead us to war.
    I don’t know why this isn’t headline news all over the country, but it should be. One of the few major media outlets that is reporting on this is the Wall Street Journal…
    The government of this oil-rich but struggling country, looking for ways to circumvent U. S. sanctions, is telling oil traders that it will no longer receive or send payments in dollars, people familiar with the new policy have told The Wall Street Journal.
    Before we go any further, we should discuss what we mean by the ‘petrodollar’ for those that are not familiar with the concept. The following comes from an excellent article by Christopher Doran…

    This post was published at The Economic Collapse Blog on September 14th, 2017.


  • Oil Rich Venezuela Stops Accepting Dollars

    President Maduro ‘ Venezuela will create a basket of currencies to free us from the dollar,’ Oil traders ordered to stop accepting U. S. dollar in exchange for crude oil Order comes following calls from Russia and China to find alternatives to current reserve system U. S. Dollar accounts for two-thirds of global trade Venezuela has over ten-times more oil than United States Super powers are gradually turning to gold to avoid using world’s main reserve currency Are we seeing the beginning of the end for the U. S. dollar?

    This post was published at Gold Core on September 14, 2017.


  • Offshore Drilling Giant Seadrill Files For Bankruptcy

    Seadrill Ltd., the London-based offshore driller controlled by billionaire Norwegian shipping magnate John Fredriksen, filed bankruptcy protection in the Southern District of Texas after working out a deal with most of its senior lenders to inject $1 billion of new money into the company pursuant to a pre-arranged plan of reorganization. The filing was largely expected and came just a couple of days before the company’s $843 million 5.625% Notes of 2017 came due.
    According to Bloomberg, Fredriksen spent more than 18 months trying to strike an agreement with creditors to restructure the industry’s biggest debt-load after crude’s collapse curbed demand for Seadrill’s services. Daily leases for the company’s rigs, which once commanded up to $800,000, have dropped to around $200,000 as cheap oil from U. S. shale drilling continues to flood the market.
    ‘The deal gives us a great liquidity cushion,’ allowing Seadrill to survive the ‘mother of all downturns,’Chief Executive Officer Anton Dibowitz said by phone. The new capital is ‘underpinned’ by top shareholder Hemen Holding Ltd. and more than 40 percent of bondholders support the plan along with 97 percent of Seadrill’s secured bank lenders, he said. Dibowitz expects more bondholders to sign up to the deal.
    Bondholders are currently predicting their ultimate recovery is worth about 25 cents on the dollar as of today.

    This post was published at Zero Hedge on Sep 13, 2017.


  • Risk Appetite Remains Robust As World Stock Markets Higher

    This is a syndicated repost courtesy of Money Morning. To view original, click here. Reposted with permission.
    (Kitco News) – World stock markets were mostly firmer again overnight. Early this week has seen trader and investor risk appetite return to the world marketplace. U. S. stock indexes are pointed toward firmer openings when the New York day session begins. The U. S. stock indexes are at or near record highs. The world stock markets are so far ‘thumbing their noses’ at what have been historically troublesome months of September and October.
    News the United Nations Security Council late Monday imposed new sanctions on North Korea that were not as harsh as the U. S. wanted is being perceived as somewhat de-escalating the tensions between the U. S. and North Korea.
    Gold prices are lower in pre-U. S.-session trading, on more profit taking and on the ‘risk-on’ trader mentality in the marketplace early this week.
    ***
    The key outside markets on Tuesday morning see the U. S. dollar index slightly lower. Meantime, Nymex crude oil futures are also slightly lower this morning.

    This post was published at Wall Street Examiner on September 12, 2017.


  • Goldman Sachs & the Volcker Rule

    Last week we heard optimistic noises coming from some of the top executives in the world of mortgage finance at the Americatalyst 2017 event. Falling interest rates have managed to get new applications for mortgage refinancing even with purchase loans for the first time in months, this as the 30-year mortgage has fallen back to pre-election levels. We’re still calling for the 10-year Treasury to go to 2% yield or lower.
    The good news for Q3 ’17 earnings is that production volumes and spreads are improving for many lenders after a dreadful start of the year. Bad news is that falling yields on the 10-year Treasury implies a significant mark-down for mortgage servicing rights (MSRs). The movement of benchmark interest rates, coupled with significantly lower lending volumes and surging prices for collateral, could make Q3 ’17 a very interesting – and treacherous – earnings period for financials with exposure to MSRs and other aspects of residential housing finance.
    Away from the blissful consideration of the housing sector, tongues were set wagging late last week when Liz Hoffman at The Wall Street Journal reported that Goldman Sachs (NYSE:GS) commodities head Greg Agran will leave the firm. ‘Mr. Agran’s departure follows the worst slump in Goldman’s commodities unit since the firm went public in 1999. Bad bets on the prices of natural gas and oil contributed to a second quarter in which the unit barely made money,’ The Wall Street Journal reported.

    This post was published at Wall Street Examiner on September 11, 2017.