• Tag Archives Oil
  • Asian Metals Market Update: July-27-2017

    Factors which can affect markets
    Short covering and renewed building of long positions will be there in gold and silver if they continue to rise today and tomorrow. If gold rises after the US July nonfarm payrolls (on 4th August) then I expect it to rise to $1508.10 before the end of this quarter. Short term gold and silver are bullish. Medium term to long term will trend after the US NFP will be the key.
    Expectation that the pace of interest rate hikes will be slower than markets discounted resulted in a crash of US dollar and zoom of gold. Copper had already risen before the FOMC so the impact was not felt. Next in line is next week’s US July nonfarm payrolls. Interest rate chapter of the Federal Reserve is closed for now. Technically a higher close today and tomorrow in gold, silver, copper and crude oil can result in another five percent gains by next week.

    This post was published at GoldSeek on 27 July 2017.


  • First Anadarko, Now Whiting: Second Shale Company Slashes CapEx Budget

    On Monday we reported that Anadarko, which previously had been lamenting the egregious amount of liquidity in the energy sector, became the first company to slash its full year capex budget by $300 million from a previous range of $4.5-$4.7 billion. As noted in our discussion, this was a material event not only for APC but the entire sector as “the Anadarko news is clearly negative for its shale peers, most of whom are set to announce similar capex declines.”
    Moments ago, this was confirmed when Whiting Petroleum, the largest oil producer in North Dakota’s Bakken region, became the second shale driller in the current cycle to slash its full year capital spending budget by 14% to $950 million from a prior estimate of $1.1 billion. .
    Whiting CEO James J. Volker explained it as follows: ‘One of our priorities is to maintain a strong balance sheet while delivering high returns and sustainable growth to investors. We plan to reduce capital spending to $950 million while achieving 14% production growth from first quarter to fourth quarter 2017. This is a testament to the high quality of our asset base, which is also evident in the strong 23% growth in proved reserves from year-end 2016 levels. A large component of this growth was driven by the effect of enhanced completions in the Williston Basin.’
    The recent collapse in WLL’s capex as a result of the drop in oil prices is shown below, and at the current budget it appears that there will be little if any incremental capex growth from here.

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


  • JULY 26/DOVISH FED WITH ‘LACK OF INFLATION’ SENDS GOLD AND SILVER SOARING AFTER COMEX CLOSES/NORTH KOREA WILL LAUNCH ANOTHER ICBM MAYBE BY TONIGHT/USA PASSES LEGISLATION ORCHESTRATING MORE SANCTI…

    GOLD: $1249.85 DOWN $2.55
    Silver: $16.46 DOWN 9 cent(s)
    Closing access prices:
    Gold $1260.75
    silver: $16.67
    SHANGHAI GOLD FIX: FIRST FIX 10 15 PM EST (2:15 SHANGHAI LOCAL TIME)
    SECOND FIX: 2:15 AM EST (6:15 SHANGHAI LOCAL TIME)
    SHANGHAI FIRST GOLD FIX: $1254.41 DOLLARS PER OZ
    NY PRICE OF GOLD AT EXACT SAME TIME: $1248.40
    PREMIUM FIRST FIX: $6.01
    xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
    SECOND SHANGHAI GOLD FIX: $1252.10
    NY GOLD PRICE AT THE EXACT SAME TIME: $1245.65
    Premium of Shanghai 2nd fix/NY:$6.45
    xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
    LONDON FIRST GOLD FIX: 5:30 am est $1245.40
    NY PRICING AT THE EXACT SAME TIME: $1246.50 ???
    LONDON SECOND GOLD FIX 10 AM: $1248.10
    NY PRICING AT THE EXACT SAME TIME. $1248.15
    For comex gold:
    JULY/
    NOTICES FILINGS TODAY FOR APRIL CONTRACT MONTH: 14 NOTICE(S) FOR 1400 OZ.
    TOTAL NOTICES SO FAR: 171 FOR 17100 OZ (.5318 TONNES)
    For silver:
    JULY
    21 NOTICES FILED TODAY FOR
    105,000 OZ/
    Total number of notices filed so far this month: 3170 for 15,850,000 oz
    XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
    WE HAVE NOW ENTERED OPTIONS EXPIRY WEEK:
    COMEX OPTIONS EXPIRY: TONIGHT JULY 26.2017
    LONDON BASED OPTIONS EXPIRY: JULY 31.2017 AT 11AM OR SO.
    (OTC/LBMA CONTRACTS)

    This post was published at Harvey Organ Blog on July 26, 2017.


  • Asian Metals Market Update: July-25-2017

    Factors which can affect markets
    Gold and silver need to break and trade over $1262 and $16.64 for another wave of rise. Sell off will be there if gold does not break $1262 and silver does not break $16.64. Trend after the FOMC statement will be the key. Cautious optimism for gold and silver despite the bullish technical. Crude oil seems to have formed a short term floor around $44 while copper seems to be in the race to outperform silver and zinc.
    Any reduction in Trump related risk is the only key factor that can cause precious metals to move into a short term bearish phase. I still expect an October interest rate hike by the Federal Reserve. Whereas markets are factoring in a December interest rate hike. One needs to watch for Trump related news as US economy is on a strong footing. Mild slowdown in US economy (if any) will be cyclical due to advent of American summer driving season.

    This post was published at GoldSeek on 25 July 2017.


  • S&P Futures Bounce As VIX Hammered, Europe “Euphoric”

    After sliding to 3 month lows on “car cartel” concerns yesterday, European stocks have rebounded after three days of declines, while oil extended gains after Saudi export cuts, with Brent rising above $49 and WTI just shy of $47. Asian stocks fell while S&P futures rose 0.2% to 2,473, putting yesterday’s GOOGL drop on plunging Costs-Per-Click in the rearview mirror.
    Helping today’s episode of global, pervasive complacency is the VIX which was hammered early by 3% in early Tuesday trading, down to 9.17. As previewed on Monday, the dollar rebounded after dropping to its lowest since August as investors await Wednesday’s U. S. interest rate decision; the greenback strength sent Gold lower for the first time in four days.
    US TSYs sell-off in relatively heavy volume after a large futures block trade in London hours and Bunds decline as strong German IFO data weighs. The dollar rallied from overnight low against G-10 and UST move helps USD/JPY trade through yesterday’s high.

    This post was published at Zero Hedge on Jul 25, 2017.


  • Caterpillar Hits All Time High After Raising Guidance On Chinese Construction Boom

    As is customary for the heavy-industrial equipment manufacturer, Caterpillar yesterday reported its retail sales, one day ahead of earnings, and as we discussed, the number was solid with Caterpillar reporting the longest positive streak in retail sales going back 51 months.
    It was also a hint as to what the Dow-member would report today for its second quarter earnings, which showed a surprisingly strong performance with CAT posting impressive Q2 Q2 EPS of $1.49, above the Est. $1.25, and revenue of $11.33Bn, also beating estimates of $10.89BN, both largely due to the ongoing Chinese construction boom as the company itself admitted.
    “Our team delivered an impressive quarter. As demand increased, we continued to control costs and generated higher profit margins,” said Caterpillar CEO Jim Umpleby. “While a number of our end markets remain challenged, construction in China and gas compression in North America were highlights in the quarter. Mining and oil-related activities have come off of recent lows, and we are seeing improving demand for construction in most regions.”

    This post was published at Zero Hedge on Jul 25, 2017.


  • Peak Shale: Anadarko Just Became The First US Oil Producer To Slash CapEx

    It appears that Horseman Global’s Russell Clark may have been spot on with his bearish take on the US shale sector.
    As a reminder, in his latest letter to investors, Clark said that “the rising decline rates of major US shale basins, and the increasing incidents of frac hits (also a cause of rising decline rates) have convinced me that US shale producers are not only losing competitiveness against other oil drillers, but they will find it hard to make money…. at some point debt investors start to worry that they will not get their capital back and cut lending to the industry. Even a small reduction in capital, would likely lead to a steep fall in US oil production. If new drilling stopped today, daily US oil production would fall by 350 thousand barrels a day over the next month.”
    What I also find extraordinary, is that it seems to me shale drilling is a very unprofitable industry, and becoming more so. And yet, many businesses in the US have expended large amounts of capital on the basis that US oil will always be cheap and plentiful. I am thinking of pipelines, refineries, LNG exporters, chemical plants to name the most obvious. Even more amazing is that other oil sources have become more cost competitive but have been starved of resources. If US oil production declines, the rest of the world will struggle to increase output. An oil squeeze looks more likely to me.
    While the bearish thesis has yet to play out, moments ago Anadarko poured cold water on US energy investors after it missed earnings badly, reporting a Q2 EPS loss of 77c, more than double the 33 cent loss expected. However, what was far more concerning to shale bulls (and perhaps oil bears), is that the company admitted that it can no longer support its capital spending budget, and it would cut its 2017 capital budget by $300 million, becoming the first major U. S. oil producer to do so, as a result of depressed oil prices. In March, Anadarko had forecast total 2017 capex of $4.5 billion to $4.7 billion, a continuation of the recent CapEx rebound which troughed in Q3 2016.

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


  • Barclays Exit Of Energy Business Triggers Surge In Oil Options Trades

    Several hours before the US stock market opened on Monday, the commodity world was shaken by an unexpected surge in crude options trades, with traders noting that “someone is either moving positions, blown up or getting out of commodities. MASSIVE amount of blocks going through in crude options.”
    Someone is either moving positions, blown up or getting out of commodities. MASSIVE amount of blocks going through in #crude #options.#OOTT
    — Mark Scullion (@mscullion) July 24, 2017

    A Bloomberg alert shortly after confirmed the huge size of trades crossing the tape, when nearly $100 million in oil options traded simultaneously:
    WTI crude oil options traded the equivalent of 48m bbl of contracts via block, according to data compiled by Bloomberg. Total value of all options combined is ~$99m Options include contracts from September 2017 through December 2020 5 largest blocks were: 4.4k Dec. $90 calls, 2.8k Dec. $60 calls, 2.5k Dec. $125 calls, 1.7k Dec. $95 calls, 1.4k Dec. $46 calls

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


  • Oslo Housing & Trade Balance Say: Tipping Point in Norway

    Traditionally, July is a slow month in Norway. Receiving sizable vacation pay in June, most Norwegian take three to four weeks off in July, enjoying most of their five-week annual vacation. If you worked overtime, you could add a few extra weeks, taking back those extra hours worked, turning that holiday into a sabbatical. However, while Norwegians live it up in Spain, Thailand, Croatia, and even America, trouble awaits them when they return home this fall.
    While housing prices may have finally reached the long-anticipated tipping point and the monthly trade balance posted a deficit for the first time since December 1998, the Norwegian Krone gained substantial strength, closing at 8.07 against the US Dollar. Going against the wishes and needs of exporters, that is well below the USDNOK=8.45 YTD average (July 23, 2017).
    However, Norges Bank indicated that rate cuts are over, following the ECB’s and US Federal Reserve Bank’s lead. Considering the importance of housing in the Norwegian economy and the need to boost exports, compensating for a fading oil sector, we can expect new and more exotic policies to push the NOK back down are already on the way.

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


  • Canadian Trading Trends: What Makes Markets Tick

    Everybody wants to make a buck on the markets. The problem for so many of us is that the financial markets can be confusing and intimidating at times. The S&P/TSX is the premier stock exchange for Canadians. It lists a large selection public companies and the market capitalization was reported at $2.2841 trillion as at 30 March 2017.
    There are multiple indices on the Toronto Stock Exchange (TSX) including the S&P/TSX Completion Index, the S&P/TSX 60 and the S&P/TSX Composite Index. Recently, the Toronto Stock Exchange hit an 8-month low. This presents many challenges to Canadian investors are looking to profit off the appreciation of stocks.
    Why are Markets Bearish in Canada? It’s important to understand that the Canadian economy is driven largely by commodities, notably crude oil. On Friday, 7 July 2017, the TSX plunged to a near 8-month low at 15,027.16. This was driven by multiple factors including weakness in oil prices and a desire for an interest rate hike by the Bank of Canada. Investors don’t miss an opportunity to make a buck on the markets. Since then however, the TSX has rallied. By Monday 17 July, 2017 the TSX was trading at 15,175.76 and is on a gradual uptrend. This is also being fuelled by rising oil prices, spurred by strong demand from China.

    This post was published at ZenTrader on July 24, 2017.


  • Venezuelans Are Now Paying 1000 Times More For US Dollars Than They Did In 2010

    The hyperinflationary-hell in Venezuela’s currency is deepening as a crippling dollar shortage and a threat of oil sanctions (amid President Maduro’s attempts to rewrite the constition to maintain his grip on power) take their toll on the economy.
    Venezuela’s Latin American neighbors urged President Nicolas Maduro to refrain from actions that might exacerbate the country’s political crisis in a disappointment to some regional governments that favored more direct and forceful criticism. As Bloomberg reports, Mercosur, South America’s largest trade bloc, called on ‘the government and the opposition not to carry out any initiative that could divide further Venezuelan society or aggravate institutional conflicts,’ in a joint statement issued at the end of a summit in Mendoza, Argentina. Member countries Brazil, Argentina, Uruguay and Paraguay were joined by Chile, Colombia, Guyana and Mexico in signing the statement.
    International condemnation of the Maduro government’s plan to rewrite the country’s constitution to maintain its hold on power is gathering pace after the U. S. said it would impose sanctions on Venezuelan officials if Maduro goes ahead.
    As we noted earlier in the week, The Trump administration is mulling over sanctions against senior Venezuelan government officials, and additional measures could include sanctions against the country’s oil industry, such as halting imports into the U. S., according to senior Washington officials who spoke to media.

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


  • Oil Rig Count Falls By 1 As Analyst Warns Permian Reserves Are Grossly Exaggerated

    For only the second time in the last 27 weeks (and 4th in the last 56 weeks), the number of US oil rigs fell last week (down 1 to 764 rigs). There is a growing concern that the rising rig count has now outpaced the lagged response to pricing and is due to rollover further…

    Notably the Canadian oil rig count rose by 12 last week.

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


  • Junk Bonds Are Finally Starting To Care About Oil

    Back in May, we pointed out an interesting observation made by Goldman: unlike late 2015 and most of 2016, when equities demonstrated surprising resilience to the swoon in oil prices, in 2017 OPEC’s failure to stabilize oil prices finally hit energy equities disproportionately. As Goldman said in mid-May, discussing the latest crude oil selloff, which has been “even more pronounced for longer-dated contracts reflecting increasing concerns over future balances in 2018 and beyond”… “in the HY market, the Energy sector has again outperformed its beta to crude over the past few weeks, a pattern that is reminiscent of previous oil sell-off episodes in the second half of 2016 and early 2017 (Exhibit 3).” Goldman also pointed out that the outperformance among energy high yield bonds “also contrasts with the sharp underperformance of Energy equities since the beginning of the year (Exhibit 4).”

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


  • Euro Surges To 2-Year High In “Bipolar” Draghi Reaction; Futures Flat

    The euro’s surge to an almost two-year high put a cap on the global market rally in Friday’s quiet session, with most major exchanges consolidating after a second strong week of gains. The MSCI Asia-Pacific index declined for first time in ten days while the European Stoxx 600 index was fractionally in the green as were US equity futures ahead of earnings reports from General Electric, Honeywell, Schlumberger and others. Oil gained with Brent flirting with $50, zinc rallied along with most base metals. European stocks are little changed, while Asian stocks decline with Tokyo shares falling for first time in three days.
    Also overnight, AUD traders were caught wrongfooted for the second time in one week after the Aussie fell sharply following an unexpectedly dovish speech from RBA Deputy Governor Debelle, who said there’s no significance in the board’s neutral rate discussion, which earlier this week sent the Aussie surging. “No significance should be read into the fact the neutral rate was discussed at this particular meeting,” Debelle said in text of speech. “Most meetings, the board allocates some time to discussing a policy-relevant issue in more detail, and on this occasion it was the neutral rate.” In addition to the drop in AUDUSD, Australian sovereign yields all dropped 5-7 basis points in bull steepening move; three-year yield drops as much as nine basis points to 2.00% – the steepest decline since March on a closing basis. Kiwi rallied to highest since September 2016 on Finance Minister Joyce comments; yen little changed. S&P futures near unchanged. WTI crude holds near $47; Dalian iron ore falls 0.7%.
    But most of the attention was on the EUR in the aftermath of Thursday’s paradoxical Draghi press conference, which led to a “bipolar” market reaction, seen as dovish by rates while hawkish by FX.

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


  • Visualizing The Countries Suffering Most From Low Oil Prices

    As Warren Buffet says, ‘Only when the tide goes out do you discover who’s been swimming naked.’
    And, as Visual Capitalist’s Jeff Desjardin details, in 2014, when oil prices crashed and burned, the tide was gone – and it was shown that too many countries were relying on frothy oil revenues to balance out their trade deficits.
    A LINGERING CRISIS
    Fast forward to today, and low oil prices are still causing big problems for many countries. The interactive visualization below from the Council of Foreign Relations shows how the world economies most reliant on oil exports have fared since the 2014 crash.

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


  • Gold and Silver Shine in the Midst of Commodity Slump

    Banks active in commodities have been hammered so far in 2017.
    According to reporting in the Financial Times, income from commodity trading and related activities at Goldman Sachs, Citigroup, JPMorgan and nine other investment banks dropped 40% in Q1 2017, and the struggles have continued into the second quarter.
    Weakness in the energy sector generally, and the price of oil in particular, drug down commodity trading. Gold and silver were the bright spot – an exception to the general commodity trend.
    Revenues shrank as banks became more wary of doing business with cash-strapped oil companies after the price of crude dropped below $30 a barrel. At the same time, there was little or no incentive for producers to hedge output at loss-making prices.’
    Goldman Sachs was the hardest hit. Its problems extended into the second quarter with another 40% plunge in fixed income, currencies, and commodities revenues. According to CNBC, the bank recorded its worst commodities quarter ever. Goldman CFO Martin Chavez called it a ‘challenging environment on multiple fronts.’

    This post was published at Schiffgold on JULY 20, 2017.


  • Global Stocks Hit Record High, Set For Longest Winning Streak Since 2015

    In what has been a less exciting session than the previous two, the euro retraced some recent gains as traders grew concerned they may have overestimated the ECB’s hawkish bias ahead of Thursday’s rate decision; in turn the dollar edged higher after the collapse of the GOP healthcare bill sent it to the lowest since September on Tuesday.
    Not even Citi could infuse any excitement in the overnight session, which its called “Purgatorial”:
    Markets are more or less flat so far today as we face a temporary dearth of data and speakers. USD remains weak, but there has been no real excuse to continue selling yet. The ECB and the BoJ are both up tomorrow and any potential moves may be linked to pre-positioning/squaring rather than anything that today may offer us…
    There is little of note this afternoon that could tickle the fancy of even the most excitable FX watcher – We are staring into the abyss… and DoE inventories are staring right back. As oil is flat so far today, that print could provoke a small twitch. Elsewhere, we get US housing starts and Canadian manufacturing shipments…
    In Dante’s inferno, Purgatorio immediately precedes Paradiso. Fingers’ firmly crossed.

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


  • The Plural of Anecdotes Is Beige

    As noted before, the Federal Reserve’s Beige Book collection of local bank district anecdotes are fascinating for all the wrong reasons. What is revealed is not the state of the economy, but rather the state of how policymakers perceive or often wish the economy was at various points. If the 2007 Beige Books are a collective case study in denial, those in 2008 are of borderline delusion.
    Everything had by summer 2008 turned or rolled over, including oil prices and, relatedly, Chinese currency appreciation. The global economy did, too, but you wouldn’t really know it from the Beige Book. The version from September 3, 2008, does not once include the word ‘recession.’ It does, however, mention the word ‘slow’ (or one of its semantic derivations like ‘slowing’ or ‘slower’) 62 times.
    The same is true for the Beige Book published on October 15, 2008, already after the initial panic had concluded. The word ‘slow’ appears 63 times, while again not a single mention of ‘recession.’ Finally, the word shows up just once in the December 3, 2008, Beige Book, but only in reference to the energy sector in the 11th (Dallas) District, talking about ‘recession-reduced industrial loads’ pertaining to just natural gas production.

    This post was published at Wall Street Examiner on July 19, 2017.


  • Asian Metals Market Update: July-19-2017

    The next two days are very crucial for all metals and energies. Gold, silver, copper and nickel are bullish but need to break key resistances for another wave of rise. If gold, silver, copper and nickel do not break key resistances then there can be a sell off. Zinc and lead are testing key short term support. Either zinc and lead hold those key supports or else there will be a sell off. Crude oil needs to break and trade over $49.00 this week to prevent short sellers from getting the upper hand. Natural gas is bullish but once again like bullion, they need to break key resistances for another wave of rise.
    Central bank currency wars are not over yet. Tomorrow’s European central bank meeting will be relevant only with statement directing at altering the current strengthening trend of the euro.
    Bitcoins – current price $2267.00
    Trend is bullish. Bitcoin can rise to $2370 and $2646 as long as it trades over $2224. Sellers will be there below $2224 to $2044 and $1882. Key support till Friday is at $2044.

    This post was published at GoldSeek on 19 July 2017.


  • Global Equity Markets Lifted By Upbeat Earnings, Rebounding Crude Oil

    This is a syndicated repost courtesy of Money Morning – We Make Investing Profitable. To view original, click here. Reposted with permission.
    (Kitco News) – World stock markets were mostly firmer overnight, supported in part by upbeat corporate earnings reports and the recent rally in crude oil prices. U. S. stock indexes are pointed toward slightly higher openings when the New York day session begins.
    Gold prices are weaker in pre-U. S. trading on a corrective pullback from recent gains that pushed prices to a three-week high on Tuesday.
    In overnight news, the German government 30-year bond (bund) fetched an average yield of 1.29%, which is a nearly two-year high.
    The ‘outside markets’ on Wednesday morning see Nymex crude oil futures slightly higher and trading around $46.50 a barrel. Recent upside price action suggests a market bottom is in place for oil. However, talk of OPEC over-production and big U. S. stockpiles will limit the upside for crude.

    This post was published at Wall Street Examiner by Jim Wyckoff ‘ July 19, 2017.