1 Dec 2017: US net oil imports lowest since 1990, Saudi 'goosing' oil prices? China's lending crackdown, Brent Crude (ICE) $63.07
Hey OPEC, the World's Largest Oil Consumer Needs a Lot Less Oil By Laura Blewitt and Javier Blas November 30, 2017 -- U.S. net oil imports, including crude and refined products, last week dropped to just 1.77 million barrels a day, the lowest level in data going back to 1990, the U.S. Energy Information Administration reported Wednesday. That puts the country on track toward its lowest monthly imports since before the Arab oil embargo of 1973. Weekly net imports peaked in November 2005 at more than 14 million barrels a day.
https://www.bloomberg.com/news/articles/2017-11-29/hey-opec-the-world-s-largest-oil-consumer-needs-a-lot-less-oil
Aramco IPO: The Right Company At The Wrong Time Nov.13.17 by Albert Goldson -- An Aramco IPO represents a political tripwire endangering Saudi sovereignty over their oil resources. Crown Prince Mohammed bin Salman’s internal crackdown consolidates his power and gives him an open road to his ascendency as Saudi king before the November 30th OPEC meeting. Saudi Arabia’s deliberate inflammatory spat with Iran is misdirection from their internal political shakeup that is simultaneously ‘goosing’ oil prices to their benefit. https://seekingalpha.com/article/4124280-aramco-ipo-right-company-wrong-time
China's Lending Crackdown Is Notable for Three Reasons. The platforms have mushroomed from fewer than 10 to more than 2,000, but only a few hundred operate with government-issued permits, By Junheng Li November 30, 2017.... Although the measures haven't been made public, our industry checks suggest three notable changes. First, the issuance of new licenses to online micro-loan platforms is being suspended, suggesting that regulators are scrutinizing online lending practices. Second, banks and bank-holding companies are being told not to buy loans underwritten by online platforms because such assets are deemed too risky. Third, turning the loans into securities will be forbidden because regulators believe securitization amplifies risks and gives investors less of an incentive to perform due diligence on the underlying assets. https://www.bloomberg.com/view/articles/2017-11-30/china-s-lending-crackdown-is-notable-for-three-reasons
15 Jun 2017: Oil traders talk of a buyer’s market for light-sweet crude, China targets financial risk, lack of new safe-haven assets, Singapore feud, Exxon and climate change, Brent Crude (ICE) $46.95
Fed Lifts Rates, Sets Out Plan to Shrink Assets - The Federal Reserve said it would raise short-term interest rates and spelled out in greater detail its plans to start slowly shrinking its $4.5 trillion portfolio of bonds and other assets this year http://www.wsj.com/livecoverage/federal-reserve-june-meeting
Anbang Shows Billionaires Should Be Nervous in Xi's New China by Keith Zhai and Ting Shi June 14, 2017 -- Insurance giant’s chairman mysteriously absent from company, Xi targets financial risk, asserts power before party congress https://www.bloomberg.com/politics/articles/2017-06-14/anbang-shows-billionaires-should-be-nervous-in-xi-s-new-china
SIBLINGS OF SINGAPORE PM FEAR FOR THEIR SAFETY, ACCUSING HIM OF HARASSMENT AND TRASHING LEE KUAN YEW’S VALUES - ‘We feel big brother omnipresent. We fear the use of the organs of state against us’ BY BHAVAN JAIPRAGAS 14 JUN 2017 http://www.scmp.com/week-asia/politics/article/2098224/siblings-singapore-pm-fear-their-safety-accusing-him-harassment
The Lonely Drifting Oil Tanker That Signals OPEC's Struggle by Laura Hurst and Javier Blas June 13, 2017, 7:57 PM GMT+8 June 14, 2017, 1:36 AM GMT+8 -- Atlantic oil market oversupplied on Nigeria, Libya production. Oil traders talk of a buyer’s market for light, sweet crude... https://www.bloomberg.com/news/articles/2017-06-13/the-lonely-drifting-oil-tanker-that-signals-opec-s-struggle
Gasoline’s Unusual Summer Stockpile Surge Weighs on Oil By Laura Blewitt June 15, 2017 -- Gasoline inventories are moving in the wrong direction this summer, rising the most in the first two weeks of June since 2001. The U.S. is hoarding more than 242 million barrels of gasoline, the highest for this time of year in weekly data going back to 1990. The surge in stockpiles sent gasoline futures on the New York Mercantile Exchange plunging to the lowest since late November at $1.4294 a gallon and pulled crude oil below $45 a barrel.—With Michael Roschnotti https://www.bloomberg.com/news/articles/2017-06-14/gasoline-s-unusual-summer-stockpile-surge-weighs-on-oil
The Global Economy Is Rebounding, But There’s One Big Problem by Chris Anstey and Enda Curran June 14, 2017, 12:01 AM GMT+8 June 14, 2017, 2:26 PM GMT+8
There’s a dark cloud building behind the world’s best period of synchronous growth among developed and emerging economies this decade -- one that in time could rain down volatility in global markets... The problem, identified by strategist and hedge fund manager Stephen Jen, is a deepening imbalance in the lack of new safe-haven assets as the world’s output expands. https://www.bloomberg.com/news/articles/2017-06-13/synchronous-global-recovery-masks-a-deepening-asset-imbalance
Shareholders force ExxonMobil to come clean on cost of climate change: The ExxonMobil resolution, introduced by the New York State Common Retirement Fund, says that the company “should analyze the impacts on ExxonMobil’s oil and gas reserves and resources under a scenario in which reduction in demand results from carbon restrictions and related rules or commitments adopted by governments consistent with the globally agreed upon 2 degree [Celsius] target”. The resolution adds: “This reporting should assess the resilience of the company’s full portfolio of reserves and resources through 2040 and beyond, and address the financial risks associated with such a scenario.”
https://www.theguardian.com/business/2017/may/31/exxonmobil-climate-change-cost-shareholders
13 Feb 2017: Asia's potential trade hot spots, India oil demand plunges on cash ban
Asia's Potential Trade Hot Spots February 13, 2017 -- Most of Asia has largely escaped President Trump's glare on trade, but he may yet come looking. The U.S. runs trade deficits with many of its partners in the region. Bloomberg's Haslinda Amin reports on "Bloomberg Markets." (Source: Bloomberg)
https://www.bloomberg.com/news/videos/2017-02-13/asia-s-potential-trade-hot-spots
These Countries Could Be Trump's Next Trade War Targets by David Tweed -- U.S. has trade deficits with most Asian trade partners. Vietnam surplus with U.S. represents 15% of the economy...https://www.bloomberg.com/politics/articles/2017-02-12/asia-s-potential-trade-hot-spots-escaping-trump-s-glare-for-now
China Ready to Step Up Scrutiny of U.S. Firms If Trump Starts Feud: Sources by Bloomberg News January 6, 2017 -- Options include antitrust, tax probes of American companies. Tension has been building in run-up to Trump’s inauguration https://www.bloomberg.com/politics/articles/2017-01-06/china-said-to-mull-scrutiny-of-u-s-firms-if-trump-starts-feud-ixl2je3s
These Countries Could Be Trump's Next Trade War Targets by David Tweed -- U.S. has trade deficits with most Asian trade partners. Vietnam surplus with U.S. represents 15% of the economy...https://www.bloomberg.com/politics/articles/2017-02-12/asia-s-potential-trade-hot-spots-escaping-trump-s-glare-for-now
India’s Oil Demand Plunges Most in 13 Years Amid Cash Ban by Saket Sundria February 13, 2017 https://www.bloomberg.com/news/articles/2017-02-13/india-s-oil-demand-plunges-most-in-13-years-amid-cash-crackdown
12 Feb 2017: China - Companies asked to estimate highest duties they can bear for punitive US tariffs; Malaysia-Thailand have significant good trade surplus with US
Editor's note: Malaysia and Thailand have significant surplus in trade with US; with each of these two, US faces deficits that are 1/3 of the goods trade deficit that it has with Mexico. From US Census Bureau, ''trade in goods" data: US-Singapore in surplus $8-12b, US deficit trade partners: US-Indonesia $12b, US-Thai $19b, US-Malaysia $22b, US-Mexico $63b, US-EU $130b, US-China $300-360b.
China Said to Assess Impact of Possible Punitive U.S. Tariffs by Bloomberg News February 10, 2017 -- Companies asked to estimate highest duties they can bear, Donald Trump has accused China of unfair trade practices -- https://www.bloomberg.com/news/articles/2017-02-10/china-said-to-assess-impact-of-possible-punitive-u-s-tariffs
Trump Holds Call With China's XI, Honors One-China Policy February 10, 2017 -- President Donald Trump reaffirmed the U.S.'s long-standing support for the "One-China" policy in his first phone call as president with Chinese counterpart Xi Jinping. Bloomberg's David Tweed reports on "Bloomberg Daybreak: Europe." (Source: Bloomberg) https://www.bloomberg.com/news/videos/2017-02-10/trump-holds-first-call-with-china-s-xi
OPEC's Amazing and Shortlived Compliance By Julian Lee Feb 12, 2017 -- At 90 percent, it looks like January may be as good as it gets for compliance. We may have another month or so before Saudi Arabia needs to choose between cutting exports or boosting supply, but it is difficult to see overall adherence getting much better without involuntary cuts somewhere due to accident or unrest. https://www.bloomberg.com/gadfly/articles/2017-02-12/don-t-get-used-to-the-amazing-cuts-in-opec-oil-production
How Singapore plans growth in dark globalization mood - https://www.bloomberg.com/news/videos/2017-02-10/how-singapore-plans-growth-on-dark-globalization-mood
China Said to Assess Impact of Possible Punitive U.S. Tariffs by Bloomberg News February 10, 2017 -- Companies asked to estimate highest duties they can bear, Donald Trump has accused China of unfair trade practices -- https://www.bloomberg.com/news/articles/2017-02-10/china-said-to-assess-impact-of-possible-punitive-u-s-tariffs
Trump Holds Call With China's XI, Honors One-China Policy February 10, 2017 -- President Donald Trump reaffirmed the U.S.'s long-standing support for the "One-China" policy in his first phone call as president with Chinese counterpart Xi Jinping. Bloomberg's David Tweed reports on "Bloomberg Daybreak: Europe." (Source: Bloomberg) https://www.bloomberg.com/news/videos/2017-02-10/trump-holds-first-call-with-china-s-xi
OPEC's Amazing and Shortlived Compliance By Julian Lee Feb 12, 2017 -- At 90 percent, it looks like January may be as good as it gets for compliance. We may have another month or so before Saudi Arabia needs to choose between cutting exports or boosting supply, but it is difficult to see overall adherence getting much better without involuntary cuts somewhere due to accident or unrest. https://www.bloomberg.com/gadfly/articles/2017-02-12/don-t-get-used-to-the-amazing-cuts-in-opec-oil-production
How Singapore plans growth in dark globalization mood - https://www.bloomberg.com/news/videos/2017-02-10/how-singapore-plans-growth-on-dark-globalization-mood
Trump Holds Call With China's XI, Honors One-China Policy February 10, 2017 -- President Donald Trump reaffirmed the U.S.'s long-standing support for the "One-China" policy in his first phone call as president with Chinese counterpart Xi Jinping. Bloomberg's David Tweed reports on "Bloomberg Daybreak: Europe." (Source: Bloomberg) https://www.bloomberg.com/news/videos/2017-02-10/trump-holds-first-call-with-china-s-xi
OPEC's Amazing and Shortlived Compliance By Julian Lee Feb 12, 2017 -- At 90 percent, it looks like January may be as good as it gets for compliance. We may have another month or so before Saudi Arabia needs to choose between cutting exports or boosting supply, but it is difficult to see overall adherence getting much better without involuntary cuts somewhere due to accident or unrest. https://www.bloomberg.com/gadfly/articles/2017-02-12/don-t-get-used-to-the-amazing-cuts-in-opec-oil-production
How Singapore plans growth in dark globalization mood - https://www.bloomberg.com/news/videos/2017-02-10/how-singapore-plans-growth-on-dark-globalization-mood
26 Jan 2017: Trump Has 1.3 Billion Reasons Not to Pick a Big Fight With China Malaysia-China trade likely to rise to US$100b, China overtakes Japan in Indonesia direct investment, Brent Crude $55.40
Trump Has 1.3 Billion Reasons Not to Pick a Big Fight With China by Bloomberg News January 26, 2017 - Xi has little room to make concessions before party congress, China leaders already fanning national pride, stressing unity https://www.bloomberg.com/politics/articles/2017-01-25/trump-has-1-3-billion-reasons-not-to-pick-a-big-fight-with-china
Minister: Malaysia-China trade likely to rise to US$100b this year anuary 23, 2017 - See more at: http://www.themalaymailonline.com/malaysia/article/minister-malaysia-china-trade-likely-to-rise-to-us100b-this-year#sthash.jZqdad0v.dpuf
Hishammuddin: Malacca port not Chinese military naval base January 25, 2017 - See more at: http://www.themalaymailonline.com/malaysia/article/hishammuddin-malacca-port-not-chinese-military-naval-base#sthash.KMKp19JH.dpuf
China overtakes Japan in Indonesia direct investment - Chinese money flowing into the country grew fivefold from a year ago by WATARU SUZUKI and ERWIDA MAULIA, Nikkei staff writers January 25, 2017; http://asia.nikkei.com/Politics-Economy/International-Relations/China-overtakes-Japan-in-Indonesia-direct-investment
Chinese billionaire Jack Ma says the US wasted trillions on warfare instead of investing in infrastructure by Jay Yarow 18 Jan 2017 -- Ma called outsourcing a "wonderful" and "perfect" strategy... "The American multinational companies made millions and millions of dollars from globalization," Ma said. "The past 30 years, IBM, Cisco, Microsoft, they've made tens of millions — the profits they've made are much more than the four Chinese banks put together. ... But where did the money go?" ... He said the U.S. is not distributing, or investing, its money properly, and that's why many people in the country feel wracked with economic anxiety. He said too much money flows to Wall Street and Silicon Valley. Instead, the country should be helping the Midwest, and Americans "not good in schooling," too.... http://www.cnbc.com/2017/01/18/chinese-billionaire-jack-ma-says-the-us-wasted-trillions-on-warfare-instead-of-investing-in-infrastructure.html
China’s Debt-Trap Diplomacy JAN 23, 2017 13 by BRAHMA CHELLANEY -- Of course, extending loans for infrastructure projects is not inherently bad. But the projects that China is supporting are often intended not to support the local economy, but to facilitate Chinese access to natural resources, or to open the market for low-cost and shoddy Chinese goods. In many cases, China even sends its own construction workers, minimizing the number of local jobs that are created.... Several of the projects that have been completed are now bleeding money. For example, Sri Lanka’s Mattala Rajapaksa International Airport, which opened in 2013 near Hambantota, has been dubbed the world’s emptiest. Likewise, Hambantota’s Magampura Mahinda Rajapaksa Port remains largely idle, as does the multibillion-dollar Gwadar port in Pakistan. For China, however, these projects are operating exactly as needed: Chinese attack submarines have twice docked at Sri Lankan ports, and two Chinese warships were recently pressed into service for Gwadar port security. https://www.project-syndicate.org/commentary/china-one-belt-one-road-loans-debt-by-brahma-chellaney-2017-01
21 Jan 2017: Trump’s Tough Talk Further Rattles World Capitals, Full Inaugural Address video, Jack Ma says the US wasted trillions on warfare, China growth slips, U.S. Oil Producers Ramp Up Spending, Brent Crude $55.49
Trump’s Tough Talk Further Rattles World Capitals on Day One by Nick Wadhams and Josh Wingrove January 21, 2017 -- Pledges to ‘reinforce old alliances and form new ones’. Speech fuels concern in world capitals on U.S. leadership https://www.bloomberg.com/politics/articles/2017-01-20/trump-s-tough-talk-further-rattles-global-capitals-on-day-one
President Trump's Full Inaugural Address 1/20/2017 -- President Donald Trump delivered a 16-minute inaugural address on Friday that will be remembered for its populism and defiance. http://www.wsj.com/video/president-trump-full-inaugural-address/5DE6F5D4-6C70-4D7B-9354-F31F9D2CA6C5.html?mod=djemTEW_h
Transcript: President Donald Trump’s 2017 Inaugural Address https://www.bloomberg.com/politics/articles/2017-01-20/full-text-president-donald-trump-s-2017-inaugural-address
Buffett Supports Trump on Cabinet Picks ‘Overwhelmingly’ by Amanda L Gordon and Noah Buhayar https://www.bloomberg.com/news/articles/2017-01-20/buffett-says-he-supports-trump-s-cabinet-picks-overwhelminglyJanuary 20, 2017
Chinese billionaire Jack Ma says the US wasted trillions on warfare instead of investing in infrastructure by Jay Yarow 18 Jan 2017 -- Ma called outsourcing a "wonderful" and "perfect" strategy..."The American multinational companies made millions and millions of dollars from globalization... The past 30 years, IBM, Cisco, Microsoft, they've made tens of millions — the profits they've made are much more than the four Chinese banks put together. ... But where did the money go?" ... He said the U.S. is not distributing, or investing, its money properly, and that's why many people in the country feel wracked with economic anxiety. He said too much money flows to Wall Street and Silicon Valley.. http://www.cnbc.com/2017/01/18/chinese-billionaire-jack-ma-says-the-us-wasted-trillions-on-warfare-instead-of-investing-in-infrastructure.html
Chinese growth slips to slowest pace for 26 years - With fears about the Trump presidency, rising debt levels and an unwinding property boom, the world’s No 2 economy is set for an uncertain 2017 by Katie Allen 20 January 2017 16.04 GMT https://www.theguardian.com/business/2017/jan/20/chinese-economic-growth-dips-to-67-the-slowest-for-26-years
18 Jan 2017: China’s Xi Jinping Seizes Role as Leader on Globalization, Trump favors a weaker dollar.
China’s Xi Jinping Seizes Role as Leader on Globalization, ‘No one will emerge as a winner in a trade war,’ Chinese president says By STEPHEN FIDLER in Davos, Switzerland and TE-PING CHEN and LINGLING WEI in Beijing Jan. 17, 2017... In a keynote address, Chinese President Xi Jinping issued a full-throated defense of international trade and economic integration, portraying Beijing as a benevolent power intent on upholding an international order that has boosted common prosperity. With doubts about the merits of globalization mounting in the U.S. and elsewhere in the West, Mr. Xi’s speech was portrayed by some who saw it as a move to fill a global leadership vacuum. Some in the audience questioned China’s readiness. Mr. Xi, the first Chinese head of state to attend the forum, also offered an implicit rebuke of Mr. Trump, who has threatened to impose tariffs on China. “No one will emerge as a winner in a trade war,” he said. http://www.wsj.com/articles/chinas-xi-jinping-defends-globalization-1484654899?
Dollar Tumbles on Trump Comments - Dollar falls to one-month low after President-elect Donald Trump describes it as ‘too strong’ By CHELSEY DULANEY, IAN TALLEY and IRA IOSEBASHVILI Updated Jan. 17, 2017 -- Mr. Trump said in an interview published Monday that he favors a weaker dollar, breaking with decades of tradition and intensifying investor concern over the new administration’s capacity for surprising policy shifts. Still, with markets improving and a pro-business administration poised to take over in Washington, the mood among global corporate and financial leaders in Davos is upbeat... http://www.wsj.com/articles/trump-comments-send-dollar-reeling-1484666714?
16 Jan 2017: Malaysia (with China) to challenge Singapore on logistics. High level questions on China's impact on Malaysia jobs, land and more amidst general pessimism. Oxfam targets feted billionaires and says to curtail rewards for those at the top.
Editor's note: From talking to Malaysia business stakeholders on China-Malaysia economic ties, I have been hearing for perhaps two years about their hope of China investments helping Malaysia gain market share on Singapore (harking back to the Mahathir vs LKY FDI plays?). In Singapore, there seemed assurance on good relations with China and that interests would prevail rather than contests. In recent weeks, regional news headlines is replete with economic implications arising from China's shifting relations in the region. Notably, SCMP reported on some (unofficial) negative opinions from China on Singapore, and then came the seizure of Singapore military vehicles in transit in HK. See news links below for comments on a potential renewed logistics role tussle.
How will Singapore navigate the choppy regional waters? By The Edge Singapore / theedgemarkets.com.sg | January 13, 2017 http://www.theedgemarkets.com.sg/sg/article/how-will-singapore-navigate-choppy-regional-waters
China projects to hit Singapore BY HO WAH FOON 15 January 2017 -- “This is a dream of a lifetime for Malaysia to eventually stop cargoes transiting through Singapore, with the generous inflow of direct investments and expertise from China now. In 10 years or so, Malaysia can say bye-bye to Singapore,” says a veteran port operator and logistics consultant with experience in Malaysia, Singapore and China.... http://www.thestar.com.my/news/nation/2017/01/15/china-projects-to-hit-singapore-the-giant-republics-aggressive-investments-in-ports-and-rail-links-i/
We are not selling off country to foreigners, says Najib 16 January 2017 -- http://www.thestar.com.my/news/nation/2017/01/16/we-are-not-selling-off-country-to-foreigners-says-najib/
Muhyiddin slammed for China deals remark BY THO XIN YIandGAN PEI LING 11 January 2017 -- MCA president Datuk Seri Liow Tiong Lai slammed Muhyiddin’s claim as ‘illogical’. “It seems that he has changed his mind after shifting his political alliance. “When he was deputy prime minister, he led missions to China to attract Chinese investors to Malaysia.http://www.thestar.com.my/news/nation/2017/01/11/muhyiddin-slammed-for-china-deals-remark-former-dpms-criticisms-not-logical-say-leaders/
Foreign ownership of land, clear policy needed BY SALLEH BUANG - 12 JANUARY 2017 Read More : http://www.nst.com.my/news/2017/01/203696/foreign-ownership-land-clear-policy-needed
DPM: Malaysians have right to assess working visit to China January 15, 2017 -- Zahid discussed the recognition of halal goods in China, especially in Yunnan province, which has great potential for Jakim and the Halal Industry Development Corporation (HDC). He identified problems faced by Yunnan entrepreneurs wanting to export their goods since Malaysia and China have yet to sign a Free Trade Agreement (FTA). On tourism, Zahid said he was waiting for feedback from the Chinese side on what more can be done to draw more tourists from the country to visit Malaysia. Tourist arrivals from China surged following the visa waiver or ENTRY (electronic travel registration) a year ago. ....http://www.themalaymailonline.com/malaysia/article/dpm-malaysians-have-right-to-assess-working-visit-to-china#sthash.uxEykVJ0.dpuf
Malaysians’ views on economy, politics at record lows, FT survey finds January 4, 2017 -- While the rest of Asean is unanimously predicting improvements in both areas, Malaysians responding to FT Confidential Research’s Economic Sentiment and Political Sentiment held opposing views about their own country. “Malaysians were the most pessimistic respondents in the Asean region, being the only ones expecting their domestic political and economic situations to deteriorate over the next two quarters,” FT wrote. ... http://www.themalaymailonline.com/malaysia/article/malaysians-views-on-economy-politics-at-record-lows-ft-survey-finds#sthash.tIgeIm2Q.dpuf
Oxfam targets feted billionaires and says to curtail rewards for those at the top... http://www.scmp.com/news/world/united-states-canada/article/2062441/obscene-these-eight-men-are-rich-half-all-humanity
11 Jan 2017: Big Oil Hits Sweet Spot, Oil Discoveries Seen Recovering After Crashing to 65-Year Low, Chinese Companies Find New Ways to Borrow, Go-Jek, BHP Held Talks With Trump, Brent crude $53.77
Big Oil Hits Sweet Spot as New Projects Reap Rewards of Recovery by Rakteem Katakey January 11, 2017 https://www.bloomberg.com/news/articles/2017-01-11/big-oil-hits-sweet-spot-as-new-projects-reap-rewards-of-recovery
Oil Discoveries Seen Recovering After Crashing to 65-Year Low by Mikael Holter January 10, 2017 Explorers found 3.7 billion barrels in 2016: Wood Mackenzie. Last year will probably be the low point for discoveries... https://www.bloomberg.com/news/articles/2017-01-10/oil-discoveries-seen-recovering-after-crashing-to-65-year-low
Strapped-for-Cash Chinese Companies Find New Ways to Borrow by Bloomberg News January 11, 2017 ABS sales by Chinese companies more than doubled last year. Doubts about ring-fencing of collateral for ABS: Genial Flow. https://www.bloomberg.com/news/articles/2017-01-10/china-inc-turns-to-structured-debt-for-cash-as-funding-squeezed
Indonesia’s First Billion-Dollar Startup Races to Kill Cash by Yoolim Lee January 11, 2017 https://www.bloomberg.com/news/articles/2017-01-10/indonesia-s-first-billion-dollar-startup-races-to-kill-cash
Uber Problem. Go-Jek Solution By Tim Culpan Jan 10, 2017 -- For sure, the Indonesian unicorn is entering a crowded and competitive market where Grab Taxi, Lippo Group and Ascend Money are vying for the same mobile-payments business. I'm not even convinced that Go-Pay will be the leading player, but it doesn't have to be. All Go-Pay has to do is make life easier for Go-Jek customers and service providers and not lose money (easier said than done). https://www.bloomberg.com/gadfly/articles/2017-01-11/uber-problem-go-jek-solution
BHP Held Talks With Trump Amid China Tariff, Climate Concerns by David Stringer January 11, 2017 -- BHP CEO, chairman met with president-elect in New York. Trump’s infrastructure pledges seen as positive for demand... Trump’s signals that he could spend as much as $500 billion to rebuild U.S. infrastructure lifted metals and producers in the wake of his election, promising to bolster global demand and add to a commodities price revival driven in 2016 by stimulus in China. The Bloomberg World Mining Index has advanced about 4 percent since Trump’s victory in November, while the London Metal Exchange Index of six key metals jumped about 6 percent.... https://www.bloomberg.com/news/articles/2017-01-10/bhp-held-talks-with-trump-amid-china-tariff-climate-concerns
5 Jan 2017: Gloom on Malaysian Ringgit and Singapore seeks new growth, economic forecasters on 2017, bond market outlooks, read Stiglitz, Brent Crude $56.26
Things Will Get Worse for the Malaysian Ringgit: BMI Research by Will Davies January 5, 2017 https://www.bloomberg.com/news/articles/2017-01-04/things-will-get-worse-for-the-malaysian-ringgit-bmi-researchSingapore to Deliver New Growth Map With Economy Under Strain by David Roman January 5, 2017 https://www.bloomberg.com/news/articles/2017-01-04/singapore-to-deliver-new-growth-map-with-economy-under-strain
Best Economic Forecasters Lay Out 2017 Calls - Our most-accurate predictors of inflation, unemployment and growth explain their outlook for this year by Jeanna Smialek January 4, 2017 https://www.bloomberg.com/news/articles/2017-01-04/best-economic-forecasters-lay-out-2017-calls
The 2017 Bond Strategy Backed By Goldman and BlackRock by Brian Chappatta and John Gittelsohn January 4, 2017 https://www.bloomberg.com/news/articles/2017-01-03/the-2017-bond-strategy-that-goldman-blackrock-and-tcw-all-back
Goldman Confronts Protesters Inside New York Headquarters by Dakin Campbell January 5, 2017 https://www.bloomberg.com/news/articles/2017-01-04/goldman-sachs-confronts-protesters-inside-new-york-headquarters
Harvard Academic Sees Debt Rout Worse Than 1994 ‘Bond Massacre’ by Anchalee Worrachate January 4, 2017 https://www.bloomberg.com/news/articles/2017-01-04/harvard-academic-sees-debt-rout-worse-than-1994-bond-massacre
Joseph Stiglitz | The age of Donald Trump: On 20 January 2017, Donald Trump will be inaugurated as the 45th President of the United States. I would hate to say “I told you so,” but his election should not have come as a surprise. As I explained in my 2002 book Globalization and its Discontents, the policies we have used to manage globalization have sown the seeds of widespread disaffection....Of course, there is no going back. China and India are now integrated into the global economy, and technological innovation is reducing the number of manufacturing jobs worldwide. Trump cannot recreate the well-paying manufacturing jobs of past decades; he can only push for advanced manufacturing, which requires higher skill sets and employs fewer people.....Rising inequality, meanwhile, will continue to contribute to widespread despair, especially among the white voters in Middle America who handed Trump his victory. As the economists Anne Case and Angus Deaton showed in their study published in December 2015, life expectancy among middle-age white Americans is declining, as rates of suicides, drug use, and alcoholism increase. A year later, the National Center for Health Statistics reported that life expectancy for the country as a whole has declined for the first time in more than 20 years...In the first three years of the so-called recovery after the 2008 financial crisis, 91% of the gains went to the top 1% of earners......Obama brought “change you can believe in” on certain issues, such as climate policy; but with respect to the economy, he bolstered the status quo—the 30-year experiment with neoliberalism, which promised that the benefits of globalization and liberalization would “trickle down” to everyone. Instead, the benefits trickled up, partly owing to a political system that now seems to be based on the principle of “one dollar, one vote,” rather than “one person, one vote.”.... http://www.livemint.com/Opinion/mssPFfoIzskf8gQCuRrSIO/Joseph%ADStiglitz%AD%ADThe%ADage%ADof%ADDonald%ADTrump.html
4 Jan 2017: China credit worries, HSR, China Railway to European cities, Trump picks import-curbing trade negotiator, will solar get cheaper than coal? Brent Crude $55.47
Can China Connect the World by High-Speed Rail? | Gerald Chan | TEDxKFAS https://www.youtube.com/watch?v=uRdQ_2sjF2s&feature=youtu.be
China’s Credit Engine Is Running Out of Gas by Bloomberg News January 4, 2017 -- President Xi Jinping and his top economic lieutenants last month pledged prudent and neutral monetary policy and proactive fiscal support for 2017 along with sharper focus on avoiding financial risks and asset bubbles. Meanwhile, the PBOC has been allowing a steady increase in money-market rates to squeeze leverage in the bond market, prompting firms to cancel or postpone bond selling of more than 100 billion yuan ($14 billion). ... https://www.bloomberg.com/news/articles/2017-01-03/china-s-credit-engine-is-running-out-of-gas-as-debt-risk-rises
Stratfor - A Problem China Cannot Outgrow by Analysis DECEMBER 29, 2016 Beijing appears to be on the verge of making a difficult choice: Sacrifice growth (and by extension, political support) to tackle Chinese debt head-on, or risk suffering the same debt-driven banking crisis seen in so many countries. https://www.stratfor.com/analysis/problem-china-cannot-outgrow?id=be1ddd5371&uuid=c31b4d91-710b-4276-97ec-534f851eb1d9
'China freight train' in first trip to Barking 3 January 2017 -- China Railway already runs services between China and other European cities, including Madrid and Hamburg. The train will take about two weeks to cover the 12,000 mile journey and is carrying a cargo of clothes, bags and other household items. It has the advantage of being cheaper than air freight and faster than sea. http://www.bbc.com/news/business-38497997China’s Credit Engine Is Running Out of Gas by Bloomberg News January 4, 2017 -- President Xi Jinping and his top economic lieutenants last month pledged prudent and neutral monetary policy and proactive fiscal support for 2017 along with sharper focus on avoiding financial risks and asset bubbles. Meanwhile, the PBOC has been allowing a steady increase in money-market rates to squeeze leverage in the bond market, prompting firms to cancel or postpone bond selling of more than 100 billion yuan ($14 billion). ... https://www.bloomberg.com/news/articles/2017-01-03/china-s-credit-engine-is-running-out-of-gas-as-debt-risk-rises
Stratfor - A Problem China Cannot Outgrow by Analysis DECEMBER 29, 2016 Beijing appears to be on the verge of making a difficult choice: Sacrifice growth (and by extension, political support) to tackle Chinese debt head-on, or risk suffering the same debt-driven banking crisis seen in so many countries. https://www.stratfor.com/analysis/problem-china-cannot-outgrow?id=be1ddd5371&uuid=c31b4d91-710b-4276-97ec-534f851eb1d9
Donald Trump’s pick to be the nation’s chief trade negotiator Robert Lighthizer - a veteran lawyer who spent three decades fighting for punitive tariffs on U.S. companies’ overseas rivals http://www.wsj.com/articles/trumps-pick-for-trade-representative-signals-focus-on-curbing-imports-1483466041?
Ford Motor Co. is scrapping a plan to build a $1.6 billion small-car factory in Mexico after Donald Trump slammed the investment for more than a year, with company executives attributing the move to slumping demand for compact cars and optimism over the president-elect’s “pro-growth” strategies. http://www.wsj.com/articles/trump-targets-gm-on-chevy-cruzes-imported-from-mexico-1483448986?
Solar Could Beat Coal to Become the Cheapest Power on Earth by Jessica Shankleman and Chris Martin January 3, 2017 -- The average 1 megawatt-plus ground mounted solar system will cost 73 cents a watt by 2025 compared with $1.14 now, a 36 percent drop, said Jenny Chase, head of solar analysis for New Energy Finance. That’s in step with other forecasts. https://www.bloomberg.com/news/articles/2017-01-03/for-cheapest-power-on-earth-look-skyward-as-coal-falls-to-solar
21 Dec 2016: OPEC, non-OPEC agree to trim almost 2 million b/d next year, Ringgit Dips to Weakest Since 1998 AFC, Equities Traders Happy as Fear Infects Bonds, Brent Crude $55.54
OPEC Deal Makes Oil Investors Most Bullish Since Slump Began by Mark Shenk December 19, 2016 -- Net-long position climbs to highest since July 2014: CFTC, OPEC, non-OPEC agree to trim almost 2 million b/d next year https://www.bloomberg.com/politics/articles/2016-12-19/opec-deal-leaves-oil-investors-most-optimistic-since-slump-began
Ringgit Dips to Weakest Level Since 1998 Asia Financial Crisis by Y-Sing Liau and Netty Idayu Ismail December 19, 2016 -- Malaysia’s ringgit touched its lowest level since the Asian financial crisis in 1998, as investors continue to sell down emerging-market assets and after a crackdown on currency speculators last month exacerbated outflows. https://www.bloomberg.com/news/articles/2016-12-19/ringgit-dips-to-weakest-level-since-1998-asia-financial-crisis
Equities Traders Target a Happy New Year as Fear Infects Bonds by Garfield Clinton Reynolds December 20, 2016, VIX gauge for S&P 500 is dropping toward the lowest since 2014 https://www.bloomberg.com/news/articles/2016-12-20/equities-traders-target-a-happy-new-year-as-fear-infects-bonds
Bond volatility elevated after worst rout since 1990s
The record-setting U.S. stock rally is wiping out almost any hint of fear for equity investors as this turmoil-filled year in global markets draws to a close. Bond and currency traders face a more complicated future.
A $33 Billion Manager Who Bought at Low Shifts to Cash by Tom Redmond December 18, 2016 https://www.bloomberg.com/news/articles/2016-12-18/a-55-billion-manager-who-bought-at-market-low-returns-to-cash
Why You Might Want to Pass on the Shrimp Cocktail December 20, 2016 -- Bloomberg Businessweek's Megan Murphy reports on antiobiotic-tainted seafood from China. She speaks on "Bloomberg Markets." https://www.bloomberg.com/news/videos/2016-12-19/why-you-might-want-to-pass-on-the-shrimp-cocktail
China's Tiger Moms Are Spending Big on Tech Classes for Their Kids by Lulu Yilun Chen December 20, 2016 https://www.bloomberg.com/news/features/2016-12-20/china-s-tiger-moms-are-spending-thousands-for-stem-education-and-robot-classes-for-their-kids
2 Dec 2016: OPEC deal pushes up oil price, Trump trades created massive November for markets, China worries about yuan and cash outflow, China-Singapore angst, Brent crude $53.52
OPEC Deal Hinged on 2 a.m. Phone Call and It Very Nearly Failed by Javier Blas and Grant Smith December 1, 2016 — 7:01 PM EST -- Saudi call with Russia led to first supply cut since 2008. Deal finally gets struck after Indonesia is sidelined. After months of meetings from Doha to Moscow, it was a 2 a.m. phone call between two of the most powerful men in the global oil industry that finally broke the impasse..... https://www.bloomberg.com/news/articles/2016-12-02/opec-deal-hinged-on-2-a-m-phone-call-and-it-very-nearly-failed
Brent Oil Jumps to Highest in More Than a Year After OPEC Accord by Mark Shenk November 30, 2016 — 6:28 PM EST December 1, 2016 — 3:49 PM EST xporter group agrees to reduce production in landmark deal. https://www.bloomberg.com/news/articles/2016-11-30/oil-rally-holds-after-opec-deal-as-focus-shifts-to-execution
Energy companies are biggest winners in European markets.
OPEC Confounds Skeptics, Agrees to First Oil Cuts in 8 Years by Nayla Razzouk , Angelina Rascouet , and Golnar Motevalli November 30, 2016 — 8:25 AM EST November 30, 2016 — 10:54 PM EST -- Broader than expected agreement to include non-OPEC countries. Benchmark Brent crude prices climb in London to top $50
https://www.bloomberg.com/news/articles/2016-11-30/opec-said-to-agree-oil-production-cuts-as-saudis-soften-on-iran
Wall Street Wins Again as Trump Picks Bankers, Billionaires by Max Abelson November 30, 2016 -- Mnuchin would be third Goldman Treasury secretary since 1990s. ‘I think Donald Trump conned them,’ says hedge fund manager. https://www.bloomberg.com/news/articles/2016-11-30/wall-street-wins-again-as-trump-chooses-bankers-and-billionaires
Dollar Slips With Asian Stocks as New Angst Unseats Trump Trades by Emma O'Brien and En Han Choong December 1, 2016 — 5:55 PM EST December 1, 2016 — 7:55 PM EST https://www.bloomberg.com/news/articles/2016-12-01/asian-futures-signal-stock-retreat-as-trump-trade-loses-momentum
Why November Was a Massive Month for Markets Around the World - Last month changes everything by Sid Verma December 1, 2016 — 8:49 AM EST https://www.bloomberg.com/news/articles/2016-12-01/why-november-was-a-massive-month-for-markets-around-the-world
China's Central Bank Is Facing a Major New Headache Bloomberg News December 1, 2016 — 11:01 AM EST December 1, 2016 — 7:12 PM EST Economist: It may take a while before the situation stabilizes. Central bank focus for yuan seen shifting as FX reserves bleed. People’s Bank of China Governor Zhou Xiaochuan already has one policy headache with the currency falling to near an eight-year low. He could have an even bigger one next month.
https://www.bloomberg.com/news/articles/2016-12-01/pboc-s-headache-to-worsen-as-new-50-000-conversion-quota-looms
China-Singapore Tensions Spill Into Open After Customs Spat Bloomberg News November 30, 2016 — 4:00 PM EST December 1, 2016 — 4:26 AM EST -- Protest over military shipment from Taiwan seen as warning. Beijing concerned Singapore moving too far into U.S. orbit. https://www.bloomberg.com/news/articles/2016-11-30/china-singapore-tensions-spill-into-public-view-via-customs-spat
29 Sep 2016: OPEC agrees to freeze on Saudi u-turn but Russia output awaited, China property and GMO uncertainty, Deutsche Bank woes, Brent crude $48.78
In U-Turn, Saudis Choose Higher Prices Over Free Oil Markets by Javier Blas Grant Smith September 29, 2016 http://www.bloomberg.com/news/articles/2016-09-28/in-u-turn-saudis-pick-cash-over-flirting-with-free-oil-markets
OPEC Agrees to First Oil Output Cut in Eight Years by Grant Smith Angelina Rascouet Wael Mahdi September 29, 2016 http://www.bloomberg.com/news/articles/2016-09-28/opec-said-to-agree-on-first-oil-output-cut-in-eight-years
Saudi Arabia unveils first public sector pay cuts 27 September 2016 -- A royal decree said ministers' salaries would be reduced by 20%, and housing and car allowances for members of the advisory Shura Council cut by 15%. Lower-ranking civil servants will see wage increases suspended, and overtime payments and annual leave capped. About two-thirds of working Saudis are employed in the public sector. Their salaries and allowances accounted for 45% of government spending in 2015. http://www.bbc.com/news/world-middle-east-37482690
China's Red-Hot Property Market Risks Missing Lessons From Japan's Crash by Bloomberg News September 29, 2016 http://www.bloomberg.com/news/articles/2016-09-28/china-s-bubble-trouble-risks-missing-lessons-from-japan-s-crash
Why People Have Been Worrying About Deutsche Bank, in 12 Charts - The bank's troubles, in pictures. BY Sid Verma September 28, 2016 http://www.bloomberg.com/news/articles/2016-09-28/why-people-have-been-worrying-about-deutsche-bank-in-12-charts
China Wants GMOs. The Chinese People Don't. SEP 27, 2016 -- On Wednesday, China's Ministry of Agriculture responded to a social media storm by suspending operations at the center.... That might take care of the current scandal, but the Chinese public's hostility toward GMOs won't go away so easily. Those concerns have only grown over the past decade as the government has increased its support of GMOs, including approval of the state-owned ChinaChem Group's $43 billion takeover offer for the Swiss seed giant Syngenta.... These efforts have galvanized a very public opposition that transcends China's typical political fault lines, and created one of the government's most intractable headaches....https://www.bloomberg.com/view/articles/2016-09-28/china-wants-gmos-the-chinese-people-don-t
19 Sep 2016: Middle East producers opened the taps, Brent Crude $46.27
Source: Bloomberg.com 5-year price chart
OPEC production rose last month as Middle East producers opened the taps, the IEA said. Saudi Arabia, Kuwait and the United Arab Emirates pumped at or near record levels and Iraq pushed output higher, according to the agency.
14 Sep 2016: Oil S&D is not going to balance in 2016 after all, exotic routes on the rise, Hanjin fallout, Brent Crude $47.36
IEA Changes View on Oil Glut, Sees Surplus Enduring in 2017 Grant Smith September 13, 2016 -- Faltering Asian demand has weighed on consumption this quarter. Market set for fourth year of surplus as Gulf OPEC pumps more....World oil stockpiles will continue to accumulate through 2017, a fourth consecutive year of oversupply, according to the IEA. Consumption growth sagged to a two-year low in the third quarter as demand faltered in China and India, while record output from OPEC’s Gulf members is compounding the glut, it said. Just last month the agency predicted the market would return to equilibrium this year...... http://www.bloomberg.com/news/articles/2016-09-13/iea-changes-view-on-oil-glut-sees-oversupply-persisting-in-2017
The Crazy, Mixed-Up Global Oil Market - Algerian oil finds an unlikely home far away in Australia when cheap shipping redraws long established trade routes September 13, 2016
http://www.bloomberg.com/news/articles/2016-09-13/the-crazy-mixed-up-global-oil-market
Hanjin Brings One of World's Busiest Shipping Terminals Close to Standstill Heejin Kim September 14, 2016 http://www.bloomberg.com/news/articles/2016-09-13/last-holdout-in-korean-war-sees-once-busy-docks-idled-by-hanjin
Hanjin Fall Is Lehman Moment for Shipping, Seaspan CEO Says Rishaad Salamat Kyunghee Park September 13, 2016 http://www.bloomberg.com/news/articles/2016-09-13/hanjin-s-fall-is-lehman-moment-for-shipping-seaspan-ceo-says
Fires, Floods, and Scorchers: Earth Destroys Yet Another Heat Record - July was the hottest on record, the 15th consecutive record-breaking month. August 18, 2016 Tom Randall
http://www.bloomberg.com/news/features/2016-08-17/fires-floods-and-scorchers-earth-destroys-yet-another-heat-record
18 August 2016: Saudi Stabilization Talk, China fishery and Silk Road, Brent Crude $49.78
Oil on Brink of Bull Market Amid Saudi Stabilization Talk: Chart by Ben Sharples August 18, 2016 http://www.bloomberg.com/news/articles/2016-08-18/oil-on-brink-of-bull-market-amid-saudi-stabilization-talk-chart
Indonesia Palm Exports Seen at 3-Month High on China Demand by Yoga Rusmana, Eko Listiyorini August 18, 2016 — Shipments seen 6.7% higher in July as China, India buy more. Inventories fall 4.4%, while output rises 0.5%, survey shows. Palm oil shipments from Indonesia, the world’s largest grower, probably rose to the highest level in three months in July after buyers from China to India boosted purchases.... http://www.bloomberg.com/news/articles/2016-08-18/indonesia-palm-exports-seen-at-three-month-high-on-china-demand
Rupiah’s Five Year of Losses Seen Ending by Top Forecaster by Lilian Karunungan August 18, 2016 http://www.bloomberg.com/news/articles/2016-08-17/rupiah-seen-ending-five-years-of-losses-on-11-billion-inflows
Singapore Non-oil domestic exports dropped 10.6 percent in July from a year earlier, worse than the median estimate of a 2.5 percent decline... That compares with a revised 2.4 percent decline in June... the Monetary Authority of Singapore signaled it’s not ready for a second-round of easing after an unexpected move in April http://www.bloomberg.com/news/articles/2016-08-17/singapore-s-export-decline-deepens-again-local-dollar-falls
Malaysia Plans Legal Moves Against Any 1MDB Defrauders, Low Says by Pooi Koon Chong August 18, 2016 http://www.bloomberg.com/news/articles/2016-08-18/malaysia-plans-legal-moves-against-any-1mdb-defrauders-low-says
Malaysia oil tanker 'not hijacked' despite earlier reports 17 August 2016 http://www.bbc.com/news/world-asia-37103871
Cathay Says Premium Travel Slumping, Prompting Discounts by Kyunghee Park August 18, 2016 -- The lack of first and business-class travelers from the Asian financial center -- the worst since the global financial crisis days of 2009 -- is such a dent on Cathay’s financials that analysts are asking whether Chief Executive Officer Ivan Chu needs to find a Plan B. http://www.bloomberg.com/news/articles/2016-08-17/cathay-pacific-says-premium-travel-slumping-prompting-discounts
China's Empty Oceans - Aug 17, 2016 5:00 PM EST By Adam Minter -- On Wednesday, Indonesia celebrated its Independence Day with a bang -- blowing up several Chinese boats that had been caught fishing illegally in its waters and impounded. China doesn't dispute Indonesia's territorial claims, but Chinese fishermen have more pressing concerns. According to reports in Chinese state media this week, overfishing and pollution have so depleted China's own fishery resources that in some places -- including the East China Sea -- there are virtually "no fish" left. That's a frightening prospect for an increasingly hungry country: China accounted for 35 percent of the world's seafood consumption in 2015. Seeking catches further afield -- including in Indonesian waters -- isn't really a solution; fish stocks in the disputed South China Sea have themselves fallen by as much as 95 percent from 1950s levels. If China doesn't want the rest of Asia's fisheries to suffer the same fate as its own, it's going to have to think much more ambitiously about how to create a sustainable food supply for the region. https://www.bloomberg.com/view/articles/2016-08-17/it-s-up-to-china-to-save-asia-s-oceans
Xi Seeks to Address Concerns Over China’s New ‘Silk Road’ Plan by Ting Shi August 18, 2016 http://www.bloomberg.com/news/articles/2016-08-18/xi-seeks-to-address-concerns-over-china-s-new-silk-road-plan
30 July 2016: Oil Giants worst profits trend, Singapore oil services badly hit, The Death of the Central Bank? IMF admits disastrous love affair with the euro, We need a rethink toward wealth by Stephen Hawking. Brent crude $43.53
Oil Giants Find There’s Nowhere to Hide From Doomsday Market by Joe Carroll July 29, 2016 -- Exxon posts worst profit in 17 years, missing estimates. Chevron’s third straight loss capped longest streak in decades. Exxon Mobil Corp. and Royal Dutch Shell Plc this week reported their lowest quarterly profits since 1999 and 2005, respectively. Chevron Corp.’s third straight loss marked the longest slump in 27 years, and BP Plc lodged its lowest refining margins in six years. Welcome to year two of a supply overhang so persistent it’s upsetting industry expectations that the market would return to a state of balance between production and demand. It’s left analysts befuddled and investors running to the doorways as the crude market threatened to tip into yet another bear market, dashing hopes that a slump that began in mid 2014 would show signs of abating. http://www.bloomberg.com/news/articles/2016-07-29/exxon-mobil-profit-slumps-as-global-oil-glut-spreads-to-fuel
Supercomputers Deliver $500 Million Savings in BHP Hunt for Oil by David Stringer July 29, 2016 http://www.bloomberg.com/news/articles/2016-07-29/supercomputers-deliver-500-million-savings-in-bhp-hunt-for-oil
Swiber Drops Liquidation Plans Following Talks With Creditor by Andrea Tan and Joyce Koh July 30, 2016 -- Swiber Holdings Ltd., the Singapore-based offshore oil and gas services group, said it is dropping liquidation plans and intends to restructure its business following talks with the company’s major financial creditor. http://www.bloomberg.com/news/articles/2016-07-30/swiber-drops-liquidation-plans-following-talks-with-creditor
Morgan Stanley Warns Currency Traders Worst to Come for Dollar by Rebecca Spalding July 30, 2016 —- The dollar is set to fall 5 percent in the next few months, the Federal Reserve isn’t raising interest rates anytime soon and U.S. economic data is only going to get worse. http://www.bloomberg.com/news/articles/2016-07-30/morgan-stanley-warns-currency-traders-worst-to-come-for-dollar
The Death of the Central Bank By Michael Schuman JULY 29, 2016 -- For the past 70 years, Japan has been a crucible of experimentation in economic policy. During its go-go years, Tokyo’s unusual practices to spur rapid growth became a model for much of the rest of Asia, while its unconventional attempts to revive its post-bubble economy have helped economists understand what should and could be done to recover from financial crises.... Now Japan may be offering the world yet another lesson in economics -- on the outer limits and ultimate effectiveness of monetary policy itself. http://www.bloomberg.com/view/articles/2016-07-29/monetary-policy-runs-out-of-room-in-japan
IMF admits disastrous love affair with the euro and apologises for the immolation of Greece BY Ambrose Evans-Pritchard 29 JULY 2016 -- The International Monetary Fund’s top staff misled their own board, made a series of calamitous misjudgments in Greece, became euphoric cheerleaders for the euro project, ignored warning signs of impending crisis, and collectively failed to grasp an elemental concept of currency theory. ....It describes a “culture of complacency”, prone to “superficial and mechanistic” analysis, and traces a shocking breakdown in the governance of the IMF, leaving it unclear who is ultimately in charge of this extremely powerful organisation. The report by the IMF’s Independent Evaluation Office (IEO) goes above the head of the managing director, Christine Lagarde. It answers solely to the board of executive directors, and those from Asia and Latin America are clearly incensed at the way European Union insiders used the fund to rescue their own rich currency union and banking system....http://www.telegraph.co.uk/business/2016/07/28/imf-admits-disastrous-love-affair-with-euro-apologises-for-the-i/
US 2016 ELECTIONS - The TPP Isn't Just a Trade Deal JULY 29, 2016 By Noah Smith -- The Trans-Pacific Partnership, a multilateral trade deal involving the U.S. and many countries on the Pacific Rim, has become something of a bugaboo for those both on the left and the right. Republican nominee Donald Trump has denounced TPP, declaring it a sop to China, even though China isn't included in the agreement. Bernie Sanders is against it as well. President Barack Obama and Democratic vice presidential nominee Tim Kaine are for it, while Hillary Clinton, who helped negotiate the deal, has now turned against it. It’s not clear what Americans in general actually think about the treaty -- polls indicate lukewarm support, and Americans tend to view foreign trade as an opportunity rather than a threat. But it’s obvious that there are very vocal, committed minorities in both parties who are adamantly opposed to the deal, and both nominees appear to be giving them what they want. That’s odd, because the TPP is pretty innocuous and incremental stuff.... Instead, I see the TPP as a scapegoat for people who are -- justifiably -- angry about the China trade explosion that happened a decade ago. Killing TPP wouldn’t bring back any of the jobs that the U.S. lost in the 2000s, but it would be a stinging public rebuke to internationalists like Clinton and Obama -- a message that Americans are fed up with technocratic meddling done in the name of economic efficiency. That in and of itself isn't too worrying. Killing the TPP won’t do much economic harm. And with the countries showing little willingness to do big global trade deals, the free-trade agenda has mostly already ground to a halt all on its own. Also, I agree with the idea that technocrats have been too blasé about ignoring the distributional issues that arise from policies like free trade. http://www.bloomberg.com/view/articles/2016-07-29/the-tpp-isn-t-just-a-free-trade-deal
Our attitude towards wealth played a crucial role in Brexit. We need a rethink By Stephen Hawking -- Money was a key factor in the outcome of the EU referendum. We will now have to learn to collaborate and to share 29 July 2016 -- I don’t know what I would do with a racehorse, or indeed a Ferrari, even if I could afford one. So I have come to see money as a facilitator, as a means to an end – whether it is for ideas, or health, or security – but never as an end in itself.... Interestingly this attitude, for a long time seen as the predictable eccentricity of a Cambridge academic, is now more widely shared. People are starting to question the value of pure wealth. Is knowledge or experience more important than money? Can possessions stand in the way of fulfilment? Can we truly own anything, or are we just transient custodians?... https://www.theguardian.com/commentisfree/2016/jul/29/stephen-hawking-brexit-wealth-resources
11 July 2016: Asian Shares Jump With Won After U.S. Payrolls Boost; Oil Falls, Brent Crude $46.33
Asian Shares Jump With Won After U.S. Payrolls Boost; Oil Falls by James Regan Emma O'Brien July 11, 2016 — Yen slips as Abe election win raises prospect of stimulus. Crude sinks toward $45 after more rigs activated in the U.S. Asian stocks jumped the most since March and South Korea’s won surged after a bigger-than-expected pickup in U.S. hiring damped concern the world’s biggest economy is losing momentum. Gold rose, while oil declined. http://www.bloomberg.com/news/articles/2016-07-10/asian-stock-futures-pace-u-s-jump-after-payrolls-yen-steadies
Transocean’s Junk Bond Sale Shows Investors Still Fear Energy by Claire Boston July 9, 2016 -- After a two-week drought, debt investors showed they’re willing to start lending to junk-rated borrowers again. But they’re still apprehensive when it comes to energy companies. That’s what happened this week when off-shore driller Transocean Ltd. came to the bond market with plans to raise $1.5 billion. The company ended up trimming the deal to $1.25 billion and had to boost yields to entice investors. Transocean was the first junk-rated company to sell bonds since just before June 23, when the U.K. voted to leave the European Union and issuance of speculative-grade debt in both the U.S. and Europe ground to a halt. And while a rebound in oil prices this year has boosted the value of bonds sold by riskier energy companies, parts of that industry still haven’t recovered, according to Jake Leiby an analyst at debt research firm CreditSights. “They’re in a tough industry,” Leiby said. “Off-shore drilling has been hit the hardest of the energy subsectors in the downturn. It’s generally higher cost and longer cycle than other options.” http://www.bloomberg.com/news/articles/2016-07-08/transocean-s-junk-bond-sale-shows-investors-still-fear-energy
24 June 2016 (2.30pm Singapore time): Britain votes to exit EU, volatility hits, Brent crude $48.39
Editor's note: Talking to someone from financial sector, one of the reaction is "volality is good for trading." Bloomberg news links below. Despite the moans, financial sector might be quite pleased at the trading and business opportunities from the volatility and risk concerns. There have been analysis showing a big gap of haves versus have-nots (similar to after the 1929 boom period) and also the middle-class squeeze. We see resilient regimes in Southeast Asia (including the special circumstances of the Singapore-Malaysia political-economies). They includes a major difference - recent decades of middle class expansion. But there has also been some (very) recent angst on migrant labour suppression on domestic wages and earnings.
http://www.bloomberg.com/graphics/2016-brexit-referendum/
Commodities Reel in World Market Tumult as U.K. Votes for Brexit http://www.bloomberg.com/news/articles/2016-06-24/commodities-reel-in-world-market-tumult-as-u-k-votes-for-brexit
Oil Glut Is Fading Where You Would Least Expect: Saudi Arabia http://www.bloomberg.com/news/articles/2016-06-23/oil-glut-is-fading-where-you-would-least-expect-saudi-arabia
Revealing the Biggest Winners and Losers From U.K. Vote to Leave - Former London Mayor Boris Johnson gets a boost, while big banks face a world of chaos http://www.bloomberg.com/news/articles/2016-06-24/revealing-the-biggest-winners-and-losers-from-u-k-vote-to-leave
‘Panic Is Palpable’ as Markets Swoon on Brexit Vote Few Expected http://www.bloomberg.com/news/articles/2016-06-24/keep-calm-is-trading-floor-mantra-as-markets-look-anything-but
U.K. Referendum Roils Global Currencies From Australia to Mexico
http://www.bloomberg.com/news/articles/2016-06-24/u-k-referendum-roils-global-currencies-from-australia-to-mexico
21 June 2016: Bloomberg - Oil halts advance, Brexit, trade war concerns, Brent crude $50.37
Oil Halts Advance Near $49 a Barrel Before U.S. Stockpile Data by Ben Sharples June 21, 2016 http://www.bloomberg.com/news/articles/2016-06-21/oil-halts-advance-near-49-a-barrel-before-u-s-stockpile-data
Crude Oil Declines in New York as Canadian Output Ramps Up by James Paton June 21, 2016 http://www.bloomberg.com/news/articles/2016-06-20/crude-oil-declines-in-new-york-as-canadian-output-ramps-up
It’s 1995 Again for Dollar Traders Bracing for Trade War Trouble by Taylor Hall June 21, 2016 -- Clinton, Trump advocate tougher stance with major partners, JPMorgan says export-import disputes weaken the greenback http://www.bloomberg.com/news/articles/2016-06-20/it-s-1995-again-for-dollar-traders-bracing-for-trade-war-trouble
What Brexit Would Mean for Asia's Economies by Colin Simpson June 21, 2016 http://www.bloomberg.com/news/articles/2016-06-20/what-brexit-would-mean-for-asia-s-economies
Stocks Gain With Pound, Treasuries Drop as Brexit Concern Fades by Lukanyo Mnyanda Jeremy Herron June 20, 2016 http://www.bloomberg.com/news/articles/2016-06-19/risk-appetite-revived-as-brexit-odds-ebb-pound-jumps-yen-falls
16 June 2016: Commodity price rally 'still in early stages', says Hightower
Commodity price rally 'still in early stages', says Hightower By Agrimoney.com - Published 14/06/2016. The commodities rally is still in its early stages, leading commentator David Hightower told the Agrimoney Investment Forum, flagging the growing demand for ags from emerging market countries. "We are much closer to the bottom for commodity prices than to a high," Mr Hightower, founder of the influential Chicago-based Hightower Report said. "If you think you have missed the commodities move – think again." He highlighted that even now - after commodities prices have risen by 12.3% this year, as measured by the Bcom index – they remain well below historic highs. The Bcom index, which closed on Monday at 88.3 points, approached 240 points in July 2008, at the peak of the last commodities boom. And analysis of supply and demand fundamentals offered reasons why the values of raw materials, including ags, may return closer to highs. 'Prices will need to go very high' "Commodity prices cannot be kept down, because costs of production are too close to where prices have been for the last six months to one year," Mr Hightower told the Agrimoney Investment Forum, in London. Markets had been "pricing for perfection" in output, leaving them vulnerable to a rally on any kind of production, or demand, surprise.".....
14 June 2016: Fossil fuels for electricity to peak on cheaper alternatives, Brexit angst, market rallies retreat, China financial worries speculation, Brent 49.86
Bloomberg news:
- The World Nears Peak Fossil Fuels for Electricity - Coal and gas will begin their terminal decline in less than a decade, according to a new BNEF analysis.... Call it peak fossil fuels, a turnabout that's happening not because we're running out of coal and gas, but because we're finding cheaper alternatives. Demand is peaking ahead of schedule because electric cars and affordable battery storage for renewable power are arriving faster than expected, as are changes in China's energy mix. .. http://www.bloomberg.com/news/articles/2016-06-13/we-ve-almost-reached-peak-fossil-fuels-for-electricity
- Asian Stocks Battered by Brexit Angst as Pound Falls; Bonds Jump http://www.bloomberg.com/news/articles/2016-06-13/brexit-angst-hits-asian-stock-outlook-as-pound-sinks-yen-climbs
- So Long to Hong Kong's World-Beating Rally http://www.bloomberg.com/news/articles/2016-06-13/so-long-to-world-beating-hong-kong-rally-as-stocks-resume-slide
- ‘Smoldering Bonfire’ Shows Where Kyle Bass May Be Right on China - Kyle Bass, the U.S. investor known for betting against subprime mortgages, is among famous money managers who expect turmoil in a Chinese banking industry struggling with bad loans. It’s in the least-known corners of the financial system that their predictions could start to come true...“A small bank may face a liquidity problem if their investments are in default and that will trigger a domino effect,” said Patricia Cheng, a Hong Kong-based analyst at brokerage CLSA Ltd. “Any failure of a financial institution will hurt sentiment and the psychological effects just can’t be quantified.”.... http://www.bloomberg.com/news/articles/2016-06-13/-smoldering-bonfire-shows-where-kyle-bass-may-be-right-on-china
30 May 2016: China Default Chain Reaction Threatens Products Worth 35% of GDP, Noble Group CEO Quits, Brent Crude 49.16
Noble Group CEO Quits as Energy Solutions Business Put on Sale by Ranjeetha Pakiam Jasmine Ng May 30, 2016 http://www.bloomberg.com/news/articles/2016-05-30/noble-group-ceo-alireza-quits-as-part-of-energy-unit-put-on-sale
Noble Cuts to the Core By Christopher Langner, David Fickling May 30, 2016 http://www.bloomberg.com/gadfly/articles/2016-05-30/noble-investors-will-hope-alireza-was-wrong-about-energy-unit
China's Veiled Loans May Prove Lethal By Andy Mukherjee May 30, 2016
http://www.bloomberg.com/gadfly/articles/2016-05-30/china-s-veiled-loans-present-a-lethal-hidden-danger
http://www.bloomberg.com/news/articles/2016-05-29/china-default-chain-reaction-threatens-products-worth-35-of-gdp
22 April 2016: Bloomberg - Commodities roaring back, Soros worries about China's debt-fueled growth, Brent Crude 44.95
Commodities Make a Comeback as Bad Weather Meets Chinese Demand, April 22, 2016 - `The situation is better than people had given credit'. Strong China data and restocking season behind metals rally http://www.bloomberg.com/news/articles/2016-04-21/commodities-make-a-comeback-as-bad-weather-meets-chinese-demand
The $2 Trillion Project to Get Saudi Arabia’s Economy Off Oil - Eight unprecedented hours with “Mr. Everything,” Prince Mohammed bin Salman. April 21, 2016 by Peter Waldman
http://www.bloomberg.com/news/features/2016-04-21/the-2-trillion-project-to-get-saudi-arabia-s-economy-off-oil?cmpid=BBD042116_BIZ&utm_medium=email&utm_source=newsletter&utm_campaign=
Soros Says China's Debt-Fueled Growth Echoes U.S. in 2007-08 April 21, 2016 http://www.bloomberg.com/news/articles/2016-04-20/soros-says-china-s-debt-fueled-economy-resembles-u-s-in-2007-08
18 April 2016: Bloomberg - Oil Plunges After Output Talks Fail Amid Saudi Demands Over Iran, Brent Crude 40.87 -5.17% 8:30 PM
Oil Plunges After Output Talks Fail Amid Saudi Demands Over Iran Updated on April 18, 2016 — 7:05 AM SGT http://www.bloomberg.com/news/articles/2016-04-17/oil-freeze-talks-end-in-failure-amid-saudi-demands-over-iranDoha Failure Sees Loonie, Aussie Slide; Yen Near 1 1/2-Year High http://www.bloomberg.com/news/articles/2016-04-17/yen-jumps-commodity-linked-currencies-plunge-as-doha-talks-fail
Oil's Grand Bargain Falls Victim to Saudi Arabia's Iran Fixation http://www.bloomberg.com/news/articles/2016-04-17/oil-s-grand-bargain-falls-victim-to-saudi-arabia-s-iran-fixation
Emerging-Market Assets Roar Back to Life April 18, 2016 Short interest in largest stock, bond ETFs slumped to about 2%. Morgan Stanley says growth pickup needed for rally to continue. http://www.bloomberg.com/news/articles/2016-04-17/bears-fleeing-fast-as-emerging-market-assets-roar-back-to-life
17 April 2016: Doha Oil Talks Start After Delay, Wall Street's Oil Crash, Bank Indonesia Adopts New Policy Rate, Tapping into the Ocean's Energy, Brent Crude 43.10
Doha Oil Talks Start After Delay to Address Saudi Stance on Iran http://www.bloomberg.com/news/articles/2016-04-17/doha-oil-talks-start-after-delay-to-address-saudi-stance-on-iran
The bad smell hovering over the global economy by Larry Elliott; Attempts at economic stimulus have left a bad smell. Central banks are starting to think the unthinkable – helicopter money 17 April 2016 http://www.theguardian.com/business/2016/apr/17/central-bank-global-economy-helicopter-money
Tapping into the Ocean's Energy April 12, 2016, The oceans generate enough energy for us to give up coal and gas completely, but no one has been able to harness it effectively. The Triton is a wave harvester that uses a novel design which may be the key to unlocking the power of the ocean. (Source: Bloomberg) http://www.bloomberg.com/news/videos/2016-04-12/tapping-into-the-ocean-s-energy
Australia's Debt Levels Raise Downgrade Fears by Candice Zachariahs April 17, 2016 http://www.bloomberg.com/news/articles/2016-04-17/australia-s-1986-debt-downgrade-haunts-morrison-as-budget-nears
Wall Street's Oil Crash, a Story Told in Charts by Asjylyn Loder April 16, 2016 http://www.bloomberg.com/news/articles/2016-04-15/wall-street-s-oil-crash-a-story-told-in-charts
The Lessons of a Coal Giant's Collapse APRIL 15, 2016 By Editorial Board, The bankruptcy of Peabody Energy Corp., the largest U.S. coal producer, is the most vivid illustration yet of the market's deep and welcome shift away from coal. It could also be calamitous for the environment: If Peabody goes out of business, who will clean up the pollution it has left behind? http://www.bloombergview.com/articles/2016-04-15/the-lessons-of-peabody-energy-s-collapse
Bank Indonesia Adopts New Policy Rate to Help Boost Economy, April 15, 2016; Central bank moves to seven-day reverse repo rate from August. Bank Indonesia will reduce lending facility rate in August... http://www.bloomberg.com/news/articles/2016-04-15/bank-indonesia-adopts-new-policy-rate-to-help-boost-economy
Tapping into the Ocean's Energy April 12, 2016, The oceans generate enough energy for us to give up coal and gas completely, but no one has been able to harness it effectively. The Triton is a wave harvester that uses a novel design which may be the key to unlocking the power of the ocean. (Source: Bloomberg) http://www.bloomberg.com/news/videos/2016-04-12/tapping-into-the-ocean-s-energy
Australia's Debt Levels Raise Downgrade Fears by Candice Zachariahs April 17, 2016 http://www.bloomberg.com/news/articles/2016-04-17/australia-s-1986-debt-downgrade-haunts-morrison-as-budget-nears
13 April 2016: A rapid slide in production around the world, risk of price drop if freeze deals fails, Brent Crude 44.21 Brent Crude 44.21
The 10-Point. Gerard Baker Editor in Chief The Wall Street Journal, 13 April 2016 The debate among the biggest oil nations over whether to freeze output is beginning to be overtaken by a rapid slide in production around the world. The U.S. government said yesterday that national output dropped in March and will likely continue falling, and this morning OPEC said that production outside the cartel is falling more sharply than expected. Helped by speculation of a deal led by Russia and Saudi Arabia, the two biggest producers, at a meeting in Doha this weekend, oil prices recovered yesterday but they fell again this morning as profit-taking and pessimism over whether producers can agree to a freeze pulled the price down. Any deal could signal that the bottom of the oil-price rout has passed. Others in OPEC—including Venezuela, Iraq, Qatar, Kuwait and the U.A.E.—have said that they would likely go along with a Moscow-Riyadh-led agreement, but it remains unclear whether they would agree to a freeze if Iran, also an OPEC member, doesn’t participate.
Oil Producers Risk Severe Price Slump If Freeze Deal Fails by Grant Smith April 12, 2016 http://www.bloomberg.com/news/articles/2016-04-12/oil-producers-risk-severe-impact-on-prices-if-freeze-deal-fails
Coal Slump Sends Mining Giant Peabody Energy Into Bankruptcy by Tiffany Kary and Tim Loh April 13, 2016 http://www.bloomberg.com/news/articles/2016-04-13/peabody-majority-of-its-u-s-entities-file-for-chapter-11
World's Once-Biggest Gem Field Idle as $13 Billion Said Gone by Godfrey Marawanyika April 13, 2016
2 April 2016: Saudi Arabia says accord for production freeze needs Iran, glutted natural-gas summer could push producers into desperation, Tesla's new car gets $7.5 billion orders at launch, Brent crude 38.67
Crude Oil Prices Sink as Saudis Balk at Production Curbs - Doubts about the deal; `Kiss goodbye' to any hopes of agreement in Doha: Commerzbank. Russia says it wasn't aware of Saudi position on Iran http://www.bloomberg.com/news/articles/2016-04-01/saudi-arabia-plans-2-trillion-megafund-to-dwarf-all-its-rivals?cmpid=BBD040116_BIZ&utm_medium=email&utm_source=newsletter&utm_campaign=urboutput had already halted an oil price rebound By TIMOTHY PUKO and GEORGI KANTCHEV Updated April 1, 2016 http://www.wsj.com/articles/oil-prices-decline-ahead-of-u-s-data-1459503111?tesla=y
Saudi Arabia Plans $2 Trillion Megafund for Post-Oil Era: Deputy Crown Prince; Pot would be big enough to buy world's four largest companies. First step will be sale of Aramco stake by 2018, prince says. ; Saudi Arabia is getting ready for the twilight of the oil age by creating the world’s largest sovereign wealth fund for the kingdom’s most prized assets. http://www.bloomberg.com/news/articles/2016-04-01/saudi-arabia-plans-2-trillion-megafund-to-dwarf-all-its-rivals?cmpid=BBD040116_BIZ&utm_medium=email&utm_source=newsletter&utm_campaign=
No Mercy Rule for Glutted Natural-Gas Market - ‘Withdrawal season’ ends with record inventories, and summer could push producers into desperation By SPENCER JAKAB April 1, 2016 http://www.wsj.com/articles/no-mercy-rule-for-glutted-natural-gas-market-1459542004?tesla=y
Obama Acknowledges Mixed Legacy on Nuclear Nonproliferation - Success of his efforts to reduce nuclear threats hinge on his ability to rein in North Korea and Iran By CAROL E. LEE April 1, 2016 http://www.wsj.com/articles/obama-says-iran-making-real-progress-living-up-to-nuclear-deal-1459527637?tesla=y
12 Mar 2016: Bonuses at many energy companies based on higher oil production, hina Is Facing a Ticking Demographic Time Bomb
China Is Facing a Ticking Demographic Time Bomb - Getting old isn't easy on an economy by Aki Ito March 10, 2016 http://www.bloomberg.com/news/articles/2016-03-10/china-is-facing-a-ticking-demographic-time-bomb?cmpid=BBD031116_BIZ
Oil Freeze Thaws as Saudi Arabia Says Accord Hinges on Iran by Grant Smith http://www.bloomberg.com/news/articles/2016-04-01/oil-freeze-thaws-as-saudi-arabia-says-accord-hinges-on-iran
Economy Chugs On Despite Fears Slowdown worries fade as hiring, wage gains lift consumer spending; Fed still seen on hold By ANNA LOUIE SUSSMAN Updated April 1, 2016 http://www.wsj.com/articles/u-s-march-nonfarm-payrolls-rise-by-215-000-jobless-rate-5-0-1459513893?tesla=y
A Ride in Tesla's $35,000 Model 3: Musk's Master Plan Realized Dana Hull April 1, 2016; The Model 3 seats five and gets at least 215 miles per charge, a minimum Tesla hopes to exceed. It comes standard with autopilot hardware... http://www.bloomberg.com/news/articles/2016-04-01/a-ride-in-tesla-s-35-000-model-3-musk-s-master-plan-realized?cmpid=BBD040116_BIZ&utm_medium=email&utm_source=newsletter&utm_campaign=
5 year Bruent crude price chart: http://www.bloomberg.com/quote/CO1:COM
Key Formula for Oil Executives’ Pay: Drill Baby Drill - Bonuses at many energy companies based on higher oil production, reserves; shareholders seek change By RYAN DEZEMBER, NICOLE FRIEDMAN and ERIN AILWORTH Updated March 11, 2016 Markets have been waiting for U.S. energy producers to slash output during a period of depressed crude prices. But these companies have been paying their top executives to keep the oil flowing.... http://www.wsj.com/articles/key-formula-for-oil-executives-pay-drill-baby-drill-1457721329?tesla=y
Should I Buy Diamonds, Wine or Picasso? By Rani MollaAndrea Felsted'; You'd have thought negative interest rates would fuel a boom in diamonds, antiques and fine wine, as people look for an alternative to stuffing cash under the mattress. But you'd be wrong: prices for all three are falling.While some "collectibles" such as vintage watches, luxury handbags and old cars are holding up pretty well, others are struggling. The phenomenon of safe havens not always proving the best place to hide was explored by Gadfly colleague Nir Kaissar recently, who questioned gold, cash and real estate..... So while you may think your investments are uncorrelated, think again. As in other areas of economic life, China's influence is everywhere. If you're worried about its financial wellbeing, there might be some merit in that mattress after all. http://www.bloomberg.com/gadfly/articles/2016-03-11/china-is-why-not-to-invest-in-diamonds-wine-or-picasso?cmpid=BBD031116_BIZScenes From the Disaster Zone: Five Years on in Fukushima - Five years since the meltdown at the Fukushima Dai-Ichi nuclear power plant, progress has been made to rebuild much of the prefecture. Yet within evacuation zones designated by the Japanese government, scars are still obvious. Many evacuees who fled are unwilling to return. Thousands still live in temporary housing outside these zones. Photographs by Ko Sasaki and Tomohiro Ohsumi for Bloomberg http://www.bloomberg.com/news/photo-essays/2016-03-10/scenes-from-the-disaster-zone-five-years-on-in-fukushima?cmpid=BBD031116_BIZ
10 Mar 2016: Emerging-Market Rallies Cling to Bullish Signs as Oil Stabilizes, Brent Crude 40.83
Emerging-Market Rallies Cling to Bullish Signs as Oil Stabilizes http://www.bloomberg.com/news/articles/2016-03-10/emerging-market-moving-averages-turn-bullish-as-oil-stabilizes
Surge in Hong Kong Stock Buybacks Is Bullish Signal to HSBC http://www.bloomberg.com/news/articles/2016-03-09/surge-in-hong-kong-stock-buybacks-sends-bullish-signal-to-hsbc
29 Feb 2016: Bloomberg - Arab States Face $94 Billion Debt Crunch HSBC says, China Panic Calmed for Now, Leaders Face Reform Test, Malaysia Najib Cements Hold, Brent Crude $35
Arab States Face $94 Billion Debt Crunch on Oil Slump, HSBC Says http://www.bloomberg.com/news/articles/2016-02-28/hsbc-sees-94-billion-gulf-arab-debt-crunch-amid-oil-slump
With China Panic Calmed for Now, Leaders Face Reform Test Bloomberg News February 29, 2016 http://www.bloomberg.com/news/articles/2016-02-28/with-china-panic-calmed-for-now-leaders-face-reform-test
Malaysia Ruling Party Suspends Deputy as Najib Cements Hold by Manirajan Ramasamy Pooi Koon Chong February 28, 2016 http://www.bloomberg.com/news/articles/2016-02-28/malaysia-ruling-party-suspends-deputy-as-najib-cements-hold
23 Feb 2016: Bloomberg - The U.S. States Where Recession Is Already a Reality. Economist - Manufacturing - A hard pounding. Singapore worries about debt defaults. Yuan carry trade unwind concerns. Brent Crude 34.69
The U.S. States Where Recession Is Already a Reality. by Steve Matthews February 22, 2016; As economists size up the chances of the first nationwide slump since 2009, pockets of the country are already contracting. Four states—Alaska, North Dakota, West Virginia and Wyoming—are in a recession and three others are at risk of prolonged declines, according to indexes of state economic performance tracked by Moody’s Analytics....The regions suffering the most are in the flop stage of the energy industry’s boom-to-bust cycle, and manufacturing-dependent areas hurt by a rising dollar are at risk of receding. Whether the weak links break the entire U.S. economy will hinge largely on a group that’s benefited from the energy price collapse: American consumers.
“The impetus for weakening regional economies is the huge fall in energy prices and other commodities prices, which is taking a tremendous toll,” said Joseph LaVorgna, chief U.S. economist at Deutsche Bank Securities Inc. in New York, who is concerned of a broadening into a national recession. “If the consumer were to falter for any reason, that would be a big problem.” http://www.bloomberg.com/news/articles/2016-02-22/recession-already-reality-in-spots-from-west-virginia-to-wyoming?cmpid=BBD022216_BIZ
Manufacturing - A hard pounding. A vital chunk of the world economy is beset by weakness Feb 20th 2016; Revenues in 2015 were nearly 15% lower than they were in 2014, and 29% below the 2012 peak.... The company’s woes are emblematic of the problems facing manufacturers worldwide. Although manufacturing is a much smaller part of most developed economies than services—just 12% of output in America, for example—its recent weakness makes many economists nervous about the wider outlook.... Recent data point to the size of the problem. Big jobs cuts have been announced this year by GE, Tata Steel and Bombardier. In December industrial production fell by 0.7% in Italy, 1.1% in Britain, 1.2% in Germany and 1.6% in France. In China both the official purchasing managers’ index (PMI) of manufacturing activity and that of Caixin, a leading financial magazine, are below 50, the threshold that indicates contraction....China’s demand for raw materials in the first decade of this century also prompted mining companies to step up production, and shipping companies to build more vessels. As Chinese demand has dropped, both industries have taken a pounding. Bloomberg’s commodity index has fallen by 28% over the past 12 months. The Baltic Dry index of shipping rates is down by 98% from its peak. The latest data show that Chinese imports, by value, have fallen by 18.8% over the past year...Before the financial crisis, global trade used to grow faster than GDP, now it is lagging behind. The OECD, a club of mostly rich countries, estimates that trade volumes last year grew by just 2%....The sluggish nature of trade growth has a disproportionate impact on manufacturing. Around 25% of all American manufacturing jobs are linked to trade, compared with just 6% of jobs in services...American capacity utilisation, a measure of how much productive capacity is not idle, may have peaked at a lower level than in previous cycles (see chart)....But currency movements cannot explain the weakness in European manufacturing; the trade-weighted euro has dropped by 11% over the past five years. The best hope for manufacturers is that this weakness is temporary....http://www.economist.com/news/finance-and-economics/21693240-vital-chunk-world-economy-beset-weakness-hard-pounding?cid1=cust/noenew/n/n/n/20160222n/owned/n/n/nwl/n/n/n/email
Singapore Lawyers Warn of 1998-Like Pain as Debt Defaults Spread by David Yong Andrea Ta February 23, 2016; Rajah & Tann Singapore LLP, Southeast Asia’s largest law firm, reckons the region’s rising bond defaults will inflict as much pain on creditors as the financial crises of 2008 and 1998. As distress spreads from shipping to mining and retail to construction industries, the law firm said in an interview that recovery rates will be similar to those seen in the global credit meltdown and Asian financial crisis. Secured creditors recover only less than 33 cents on the dollar from insolvencies in East and South Asia, compared with more than 80 cents in the U.S., according to World Bank studies. Rival law firm Hogan Lovells US LLP said in an interview that regional banks will likely boost the sale of bad loans in the coming months. ...http://www.bloomberg.com/news/articles/2016-02-22/singapore-lawyers-warn-of-1998-like-pain-as-debt-defaults-spread
DBS Profit Rises on Interest Income as Bad-Loan Ratio Holds by Chanyaporn Chanjaroen February 22, 2016 http://www.bloomberg.com/news/articles/2016-02-21/dbs-posts-20-gain-in-fourth-quarter-profit-on-interest-income
The World's Debt Is Alarmingly High. But Is It Contagious? Welcome back to a familiar anxiety: global debt contagion. by Matthew Philips February 22, 2016 http://www.bloomberg.com/news/articles/2016-02-22/the-world-s-debt-is-alarmingly-high-but-is-it-contagious
Brace for Yuan Horror Show By Christopher Langner Feb 23, 2016;... With the yuan having reversed course from steady appreciation to rapid devaluation, companies such as developer Shimao are griping about rising interest costs and trying to replace foreign debt. Any such move will come too late to save investors from sharing the pain. There are more than 200 publicly traded Chinese companies which have issued bonds in either U.S. or Hong Kong dollars and publish financial reports in yuan. All added, they have more than $364 billion in syndicated loans and bonds in the two currencies.... Most of that isn't hedged, which until recently was the smart thing to do. For those with enough size to lure global banks and investors, it was a no-brainer to borrow in dollars (or in Hong Kong dollars, which amounts to the same given the currency's peg to the greenback). Rates were far lower -- at times less than a third of those at home -- and with the yuan appreciating the cost of paying interest progressively dropped.As a result, companies that borrowed overseas were able to book foreign-currency gains on their debt for several years. No longer... http://www.bloomberg.com/gadfly/articles/2016-02-23/yuan-depreciation-bill-comes-due-in-china-earnings-reports
Negative Rates Advocate Fujimaki Says BOJ's Kuroda Got It Wrong by Chikako Mogi Kazumi Miura Yumi Ikeda February 21, 2016 http://www.bloomberg.com/news/articles/2016-02-21/negative-rates-advocate-fujimaki-says-boj-s-kuroda-got-it-wrong
22 Feb 2016: Distress in India rural sector disrupts water to Delhi, army sent in on caste-based protests, Brent crude 33.45
Agony in Rural India Prompts Modi U-Turn on Policy He Mocked by Bibhudatta Pradhan February 22, 2016; Modi under pressure to boost spending in budget for rural jobs. Administration to increase spending on guaranteed job program.. During previous droughts, Harkiya relied on the world’s biggest public works program to earn cash doing menial tasks like digging ditches, building roads and planting trees. Yet this year, local officials say the central government isn’t providing enough money to fund work projects. Rising discontent in rural India is pressuring Prime Minister Narendra Modi to spend more on the $5 billion jobs program in his budget on Feb. 29. His party got crushed in India’s third most-populous state in November, and faces as many as nine state assembly elections in the coming fiscal year that will affect his economic agenda until the next national vote in 2019. Village Distress. Modi “neglected the countryside" with an emphasis on urban development in his first two years, said S. Mahendra Dev, director of the Indira Gandhi Institute of Development Research in Mumbai. “They should make bold moves in the budget focusing on rural India -- otherwise they will pay a heavy political price........ India’s villages, home to about 70 percent of the nation’s 1.3 billion people, aren’t feeling its world-beating 7.3 percent economic expansion. Rural wage growth is falling, food exports are down and production of mass-market goods has dropped.... In times of distress, farmers don’t have many places to turn. While subsidized food ensures nobody starves to death, other forms of welfare are lacking: Health care is spotty, crop insurance is inadequate and emergency relief can take months to arrive...... "http://www.bloomberg.com/news/articles/2016-02-21/agony-in-india-dust-bowl-prompts-modi-u-turn-on-policy-he-mocked
Protesters Disrupt Water Supplies to India's Capital by Archana Chaudhary February 22, 2016; Unrest in Haryana state blocked about half of Delhi's supply. More than half the water supply to 18 million people in India’s capital is being disrupted after deadly unrest in a neighboring state... http://www.bloomberg.com/news/articles/2016-02-21/water-running-out-in-india-s-capital-as-mobs-disrupt-supplies
India Sends Army to Quell Caste-Stoked Protests Near Delhi by Natalie Obiko Pearson February 21, 2016; Maruti Suzuki forced to halt production at two plants. Capital set to lose water supply as protesters block canal. India sent troops to a northern state where protests for caste rights turned violent as mobs torched vehicles, shut off a canal supplying water to the capital, and forced the nation’s biggest automaker to halt production. Protests entered their third day in Haryana state bordering the capital of New Delhi, where more than 3,000 troops have been deployed to impose order, according to army headquarters. Including paramilitary officers and police, the total number of security personnel in the state rose to 5,000, the Press Trust of India reported, citing an official it didn’t identify. The demonstrations are being led by members of the Jat community, who are demanding benefits such as government jobs and college admission under India’s affirmative action policy. Giving in to their demands could embolden other groups, including the Patels who took to the streets in Prime Minister Narendra Modi’s home state in August in a similar explosion of caste-based violence... http://www.bloomberg.com/news/articles/2016-02-21/india-sends-army-to-quell-protests-near-delhi-at-least-one-dead
20 Feb 2016: Top Oil States to Complete Output Talks by March 1, Russia Says, Brent Crude 33.01
Top Oil States to Complete Output Talks by March 1, Russia Says by Elena Mazneva February 20, 2016; Talks possible with more non-OPEC states, Energy Minister says. Iran hasn't commented on freezing production at January levels. http://www.bloomberg.com/news/articles/2016-02-20/top-oil-states-to-complete-output-talks-by-march-1-russia-says
Norway government may need to withdraw almost $10 billion from its $810 billion wealth fund this year http://www.bloomberg.com/news/articles/2016-02-18/norway-central-bank-chief-warns-on-oil-wealth-as-coffers-raided
The Stressed-Out Oil Industry Faces an Existential Crisis by Dan Murtaugh February 19, 2016 http://www.bloomberg.com/news/articles/2016-02-18/there-s-a-new-world-order-to-talk-about-at-the-davos-of-energy
Exxon Fails to Replace Production for First Time in 22 Years by Joe Carroll February 20, 2016 http://www.bloomberg.com/news/articles/2016-02-19/exxon-fails-to-replace-production-for-first-time-in-22-years
China Removes Xiao as CSRC Head After Stock Market Meltdown Bloomberg News February 19, 2016 http://www.bloomberg.com/news/articles/2016-02-19/head-of-china-s-securities-regulator-to-step-down-wsj-reports
The Trouble With Banks Is Contained, for Now Feb 17, 2016 Mohamed El-Erian Chief Economic Advisor, Allianz https://www.linkedin.com/pulse/trouble-banks-contained-now-mohamed-el-erian?trk=hp-feed-article-title-publish
13 Feb 2016: Vitol - Prices will stay low for up to a decade, Negative Rates Backfire, bank CoCo bonds problem, art market trouble? Brent Crude 32.83
The Oil Industry Got Together and Agreed Things May Never Get Better - Thousands of industry participants gathered in London for their annual get-together, only to find a world awash in crude and hardly a life jacket in sight.... Producers are bracing for a tough year. Prices will stay low for up to a decade as Chinese economic growth slows and the U.S. shale industry acts as a cap on any rally, according to Ian Taylor, chief executive officer of Vitol Group, the world’s largest independent oil trader. Even refiners, whose profits have held up better than expected, are seeing a worsening outlook.... http://www.bloomberg.com/news/articles/2016-02-12/the-oil-industry-got-together-and-agreed-things-may-never-get-better
World Trade at Sea Has Hangover From Party That Never Happened by Alex Longley February 12, 2016; Growth in container trade was half what was expected last year... http://www.bloomberg.com/news/articles/2016-02-12/world-trade-at-sea-has-hangover-from-party-that-never-happened
Racked Markets Hand Verdict to Central Banks on Sub-Zero Rates; More than $8 trillion erased from global equities this year. Negative rates hurt banks as unconventional policies backfire... http://www.bloomberg.com/news/articles/2016-02-11/racked-markets-hand-verdict-to-central-banks-on-sub-zero-rates
Asia's Rich Advised to Buy Yen as BOJ's Negative Rates Backfire by Netty Idayu Ismail February 12, 2016 http://www.bloomberg.com/news/articles/2016-02-12/asia-s-rich-advised-to-buy-yen-as-boj-s-negative-rates-backfire
The Trouble With CoCos 10 FEB 12, 2016 By Editorial Board; Until recently, many financial regulators thought a new financial instrument -- known as a contingent convertible bond -- had a big part to play in ensuring the soundness of the financial system. After the past few days, they might want to think again. CoCo bonds have been central to European regulators’ efforts to avoid a repeat of the 2008 crisis. They’re supposed to boost a bank’s capacity to absorb losses... http://www.bloombergview.com/articles/2016-02-12/the-trouble-with-cocos
Flashy Malaysia Financier Said to Sell Picasso, Basquiat at Loss by Katya Kazakina February 12, 2016 http://www.bloomberg.com/news/articles/2016-02-12/flashy-malaysia-financier-said-to-sell-picasso-basquiat-at-loss
Is The Top of the Art Market In Trouble? A look at the top 10 sales of London's February auctions by James Tarmy February 12, 2016 http://www.bloomberg.com/news/articles/2016-02-12/is-the-top-of-the-art-market-in-trouble
source: http://bigcharts.marketwatch.com/quickchart/quickchart.asp?symb=BID&insttype=Stock&freq=2&show=&time=20
10 Feb 2016: IEA Raises Estimate of Surplus Oil, Indonesia stimulus, Russia funding gap, milk price slump, Brent Crude 30.79
IEA Raises Estimate of Surplus Oil Supply on Higher OPEC Output by Grant Smith February 9, 2016 http://www.bloomberg.com/news/articles/2016-02-09/iea-raises-estimate-of-surplus-oil-supply-on-higher-opec-output
Goldman Sees Risk of Oil Below $20 by Grant Smith Jonathan Ferro February 9, 2016 http://www.bloomberg.com/news/articles/2016-02-09/goldman-sees-more-oil-swings-that-could-drag-price-below-20
Here's What Bank Executives Are Saying About Energy Markets Laura J Keller February 10, 2016 http://www.bloomberg.com/news/articles/2016-02-09/here-s-what-bank-executives-are-saying-about-energy-markets
Won After the Crisis Is Buying Again by Tom Redmond February 9, 2016 Global equities erased $7.7 trillion in value this year through Monday as routs in commodities and Shanghai shares spread, taking global banks as the latest victim. Worldwide stocks neared a bear market on Tuesday as the yen surged and corporate bond risk jumped. http://www.bloomberg.com/news/articles/2016-02-09/the-20-billion-manager-who-won-after-the-crisis-is-buying-again
Indonesian Growth Beats Estimates as Widodo Lifts Spending Chris Brummitt Rieka Rahadiana Herdaru Purnomo February 5, 2016 http://www.bloomberg.com/news/articles/2016-02-05/indonesian-growth-beats-estimates-as-widodo-seeks-economic-boost
Putin to Weigh $10.4 Billion Anti-Crisis Plan With Funding Gap by Olga Tanas Andrey Biryukov February 10, 2016 Government has to find funding for 134 billion rubles in plan. Russia will tap sovereign wealth fund for anti-crisis measures. http://www.bloomberg.com/news/articles/2016-02-09/putin-to-weigh-10-4-billion-anti-crisis-plan-with-funding-gap-ikfwog7k
Starbucks Stands to Benefit From Plunging Milk Prices: Chart Leslie Patton January 20, 2016 http://www.bloomberg.com/news/articles/2016-01-19/starbucks-stands-to-benefit-from-plunging-milk-prices-chart
NZ Farmers Under Pressure as Milk Powder Slumps to Six-Month Low Tracy Withers February 3, 2016; Whole milk powder fell to $1,952 a metric ton at the GlobalDairyTrade auction Tuesday, the lowest since Aug. 18..... Powder prices have dropped 31 percent since October, putting pressure on Fonterra Cooperative Group Ltd.’s payout to its New Zealand farmers and damping the outlook for economic growth..... http://www.bloomberg.com/news/articles/2016-02-02/nz-farmers-under-pressure-as-milk-powder-slumps-to-six-month-low
4 Feb 2016: Oil prices and markets rally, Brent Crude 35.44
Miners Go Gangbusters as Metals Rally, Dollar Drop Spark Rebound by Danielle Bochove February 4, 2016 http://www.bloomberg.com/news/articles/2016-02-03/miners-go-gangbusters-as-metals-rally-dollar-drop-spark-rebound
Macquarie Cuts Profit Forecast for Its Commodities Business by Narayanan Somasundaram February 4, 2016 http://www.bloomberg.com/news/articles/2016-02-03/macquarie-cuts-its-profit-forecast-for-commodities-business
Risk of US recession back on the agenda for markets by John Authers February 3, 2016 http://www.ft.com/intl/cms/s/0/18b79508-ca5e-11e5-a8ef-ea66e967dd44.html#axzz3z6zob6lp
3 Feb 2016: Stocks Fall as Sliding Oil Prices Hit Energy Shares, ChemChina-Syngenta deal, China's rising junk debt, commodity trader woes, Brent Crude 32.72
Stocks Fall as Sliding Oil Prices Hit Energy Shares - Investors bid up havens from government debt to utilities By DAN STRUMPF Updated Feb. 2, 2016;...The declines came on the heels of a second consecutive day of lower oil prices as traders continued erasing a recent surge from speculation that the world’s major exporters would cooperate on output cuts. New York-traded crude oil fell 5.5% to $29.88 a barrel, taking its two-day loss to 11%. A steep drop in quarterly profit from both Exxon Mobil and BP showed that even the sector’s most resilient firms are struggling in an environment of sharply lower oil prices.... Adding to the pain for the energy sector was a wave of credit downgrades by ratings firm Standard & Poor’s, which said the steep fall in oil prices could curtail energy companies’ outlook for years..... http://www.wsj.com/articles/global-stocks-fall-on-oil-price-weakness-1454403900?tesla=y
It's the 1980s Again, Thanks to the Oil Glut - The reaction in the U.S. to lower energy prices has been strikingly similar this time around. http://www.bloomberg.com/news/articles/2016-02-02/it-s-the-1980s-again-thanks-to-the-oil-glut
ChemChina Nears Deal to Buy Controlling Stake in Syngenta - Deal could represent the largest foreign acquisition by a Chinese company By RICK CAREW, SHAYNDI RAICE and EYK HENNING Feb. 2, 2016 China National Chemical Corp. is nearing a deal to buy a controlling stake in Syngenta AG that values the Swiss pesticide company at about $43 billion, according to people familiar with the matter.... http://www.wsj.com/articles/chemchina-nears-deal-to-buy-controlling-stake-in-syngenta-1454416378?mod=djemalertDEALS
China Has $23 Billion in Debt That Could Be Cut to Junk http://www.bloomberg.com/news/articles/2016-02-02/fallen-angels-incoming-as-23-billion-of-china-bonds-near-junk
Oil Industry's Plan to Keep Investors Happy: Borrow More Money http://www.bloomberg.com/news/articles/2016-02-02/oil-industry-s-plan-to-keep-investors-happy-borrow-more-money
Oil Could Prices Jump 50% by the End of 2016 http://www.bloomberg.com/news/articles/2016-02-03/oil-seen-surging-about-50-by-fourth-quarter-as-supply-eases
Cheap Oil Won't Save Airlines By Chris Bryant Feb 1, 2016 http://www.bloomberg.com/gadfly/articles/2016-02-01/ryanair-shows-falling-oil-won-t-save-air-france-lufthansa
Bank Bear Market Gets Worse as Goldman, Citi Sell Off Again by Anna-Louise Jackson Dakin Campbell February 3, 2016 http://www.bloomberg.com/news/articles/2016-02-02/bank-bear-market-gets-worse-as-goldman-citigroup-sell-off-again
Rio Tinto Drops to Lowest Since March '09 as Mining Rout Deepens by Agnieszka De Sousa February 3, 2016 http://www.bloomberg.com/news/articles/2016-02-03/rio-tinto-drops-to-lowest-since-march-09-as-mining-rout-deepens
Rio Tinto Drops to Lowest Since March '09 as Mining Rout Deepens by Agnieszka De Sousa February 3, 2016 http://www.bloomberg.com/news/articles/2016-02-03/rio-tinto-drops-to-lowest-since-march-09-as-mining-rout-deepens
Goldman Sachs Says It May Be Forced to Fundamentally Question How Capitalism Is Working - The profit margins debate could lead to an unsettling conclusion. by Joe Weisenthal February 3, 2016; .... Goldman writes: "We are always wary of guiding for mean reversion. But, if we are wrong and high margins manage to endure for the next few years (particularly when global demand growth is below trend), there are broader questions to be asked about the efficacy of capitalism." In other words, profit margins should naturally mean-revert and oscillate. The existence of fat margins should encourage new competitors and pricing cycles that cause those margins to erode while conversely, at the bottom of the cycle, low margins should lead to weaker players exiting the business and giving stronger companies more breathing space. If that cycle doesn't continue, then something strange is taking place....http://www.bloomberg.com/news/articles/2016-02-03/goldman-sachs-says-it-may-be-forced-to-fundamentally-question-how-capitalism-is-working
Banker's Accounts Said to Be Frozen in Singapore 1MDB Probe by Andrea Tan February 2, 2016 http://www.bloomberg.com/news/articles/2016-02-02/banker-s-accounts-said-to-be-frozen-amid-singapore-s-1mdb-probe-ik587yuc
Mahathir's Son Ousted as Malaysia Premier Tightens Grip on Power by Pooi Koon Chong Manirajan Ramasamy February 3, 2016 http://www.bloomberg.com/news/articles/2016-02-03/mahathir-s-son-ousted-as-malaysia-premier-tightens-grip-on-power
Banker's Accounts Said to Be Frozen in Singapore 1MDB Probe by Andrea Tan February 2, 2016 http://www.bloomberg.com/news/articles/2016-02-02/banker-s-accounts-said-to-be-frozen-amid-singapore-s-1mdb-probe-ik587yuc
2 Feb 2016: Bloomberg - Japan Trading Houses Facing $13 Billion Hit on Commodity Misfire, Brent Crude 34.04
Japan Trading Houses Facing $13 Billion Hit on Commodity Misfire By Masumi Suga Stephen Stapczynski Ichiro Suzuki February 2, 2016; Companies esteemed for creating `shosha man' plan writedowns. As raw-material prices fall, focus shifts to other businesses http://www.bloomberg.com/news/articles/2016-02-01/japan-trading-houses-facing-13-billion-hit-on-commodity-misfireHong Kong Property Slump Worries Investors by Frederik Balfour February 2, 2016 http://www.bloomberg.com/news/articles/2016-02-01/hong-kong-property-sentiment-turns-as-sales-slump-to-25-year-low
Singapore Seizes `Large Number' of Bank Accounts Amid 1MDB Probe by Jasmine Ng February 1, 2016 http://www.bloomberg.com/news/articles/2016-02-01/singapore-seizes-large-number-of-bank-accounts-amid-1mdb-probe
1 Feb 2016: Lower-for-longer view for oil, HK retailers for Chinese New Year, Swiss Probe of Malaysia Fund Sees $4 Billion Possible Misuse, AUD plunge 'blessing', Brent Crude 35.30
Editor's note: End of last and this week various industry friend meet-ups in run up into Lunar New Year long weekend upcoming. Rather downbeat mood.
Lower-for-Longer View for Oil Means More Deals on the Way by Rakteem Katakey February 1, 2016 — 8:01 AM SGT. Value of M&A shrank by 17% to $380 billion last year, EY says. Consolidation to be driven by overcapacity, margin pressures http://www.bloomberg.com/news/articles/2016-02-01/oil-deals-seen-gathering-pace-as-lower-for-longer-view-persists
Hong Kong Retailers Fear for Chinese New Year February 1, 2016 Chinese New Year (CNY) isn’t expected to be the seasonal boon for H.K. retailers that it has been in recent years due to yuan depreciation, market volatility and decline in same-day visitors from the mainland. Bloomberg's Catherine Larkin has more on "First Up." (Source: Bloomberg) http://www.bloomberg.com/news/videos/2016-02-01/hong-kong-retailers-fear-for-chinese-new-year
Swiss Probe of Malaysia Fund Sees $4 Billion Possible Misuse by Shamim Adam January 30, 2016 http://www.bloomberg.com/news/articles/2016-01-30/swiss-probe-of-malaysia-fund-finds-possible-misuse-of-4-billion
Aussie's Plunge to Seven-Year Low Is Turning Out to Be a Blessing by Candice Zachariahs February 1, 2016 http://www.bloomberg.com/news/articles/2016-01-31/as-currency-war-simmers-aussie-a-poster-child-for-market-forces
30 Jan 2016: Corporate debt hangover, China steel production's first drop since 1982, Swiss probe of Malaysia fund, Brent Crude 35.99
China Steel Production Has First Annual Drop Since 1981: Chart Feiwen Rong January 29, 2016 http://www.bloomberg.com/news/articles/2016-01-29/china-steel-production-has-first-annual-drop-since-1981-chart
The $29 Trillion Corporate Debt Hangover That Could Spark a Recession Sally Bakewell January 28, 2016; Leverage at companies worldwide swells to highest in 12 years. Capital not working hard enough at third of all firms http://www.bloomberg.com/news/articles/2016-01-28/some-29-trillion-later-the-corporate-debt-boom-looks-exhausted
Swiss Probe of Malaysia Fund Sees $4 Billion Possible Misuse Shamim Adam January 30, 2016; The Swiss Attorney-General’s office said in a statement Friday that during an investigation of 1Malaysia Development Bhd., four cases involving allegations of criminal conduct and occurring between 2009 and 2013 have so far come to light. It has been ascertained a small amount of funds were transferred to Swiss accounts of former Malaysian public officials, according to the statement.
The Swiss authority is seeking help from the Malaysian attorney general to determine whether funds were misappropriated.http://www.bloomberg.com/news/articles/2016-01-30/swiss-probe-of-malaysia-fund-finds-possible-misuse-of-4-billion
29 Jan 2016: Bloomberg - Russia and Goldman Sachs on oil, Japan negative interest rates, Brent Crude 34.26
Decision On Oil Cut Only Possible If All Exporters Agree, Russian Energy Minister Says January 29, 2016 http://www.bloomberg.com/news/articles/2016-01-29/russia-sees-decision-on-oil-cut-only-if-all-exporters-agree
Why Goldman Sachs Says $30 Oil Isn't Proof of Weak Demand by Grant Smith January 28, 2016, Brent spreads signal that demand isn't driving the rout. Prices low enough to cause `fundamental change' in supply. Oil’s collapse to $27 a barrel last week spurred concern that, on top of the existing oversupply, the market is facing a demand crisis. Goldman Sachs Group Inc. thinks that’s wrong. http://www.bloomberg.com/news/articles/2016-01-28/why-goldman-sachs-says-30-oil-isn-t-proof-of-weak-demand
PetroChina Expects 2015 Profit to Fall as Much as 70% on Oil Slump by Bloomberg News http://www.bloomberg.com/news/articles/2016-01-29/petrochina-sees-2015-profit-falling-as-much-as-70-on-oil-slump
Bank of Japan's Negative Interest Rate Decision Explained by James Mayger January 29, 2016 http://www.bloomberg.com/news/articles/2016-01-29/bank-of-japan-s-negative-interest-rate-decision-explained
Stocks Rally With Bonds as BOJ Ends Grim January on High Note by Emma O'Brien Stephen Kirkland http://www.bloomberg.com/news/articles/2016-01-28/asian-shares-set-for-gains-as-horror-month-ends-with-boj-update
26 Jan 2016: Oil - stocks correlation reflects fear of global recession, crude has been tracking an infamous subprime mortgage index, problems in retail, Brent crude 30.07
Oil, Stocks at Tightest Correlation in 26 Years - The link reflects a common theme—a fear of a global recession By TOMMY STUBBINGTON and GEORGI KANTCHEV Jan. 25, 2016 http://www.wsj.com/articles/oil-stocks-dance-the-bear-market-tango-1453722783?tesla=y
So Yes, the Oil Crash Looks a Lot Like Subprime - The price of crude has been tracking an infamous subprime mortgage index. by Tracy Alloway http://www.bloomberg.com/news/articles/2016-01-25/so-yes-the-oil-crash-looks-a-lot-like-subprime
January 25, 2016
So Yes, the Oil Crash Looks a Lot Like Subprime - The price of crude has been tracking an infamous subprime mortgage index. by Tracy Alloway http://www.bloomberg.com/news/articles/2016-01-25/so-yes-the-oil-crash-looks-a-lot-like-subprime
January 25, 2016
Why the Fed Is the Root of Much Market Turmoil - Fed is a key reason markets have plunged and risk of recession rising By GREG IP Jan. 25, 2016 http://www.wsj.com/articles/why-the-fed-is-the-root-of-much-market-turmoil-1453717801?tesla=y
Mom-and-pop stores have steadily disappeared across America in the past three decades, but there was at least a Wal-Mart left behind to replace them after the mega chain finished putting them out of business. Now the Wal-Marts are disappearing too, leaving hundreds of communities without grocery stores and pharmacies and thousands of jobs.... http://www.bloomberg.com/news/articles/2016-01-25/wal-mart-it-came-it-conquered-now-it-s-packing-up-and-leaving?cmpid=BBD012516_BIZ
LBOs. How Bad Is Retail? Look at the Bonds - Prices of retailers’ bonds tumble as investors see few options for private-equity owners to cash out By MATT JARZEMSKY Jan. 25, 2016; Bonds of major retailers that went through leveraged buyouts have fallen to distressed levels... http://www.wsj.com/articles/how-bad-is-retail-look-at-the-bonds-1453752646?tesla=y
23 Jan 2016: Global Stocks Surge Most Since 2012 on Stimulus Bets, Oil Rally , Nouriel Roubini: Global Economy Not Back to 2008, Brent Crude 32.18 +10%
Nouriel Roubini: Global Economy Not Back to 2008 January 22, 2016; Nouriel Roubini, NYU professor and chairman at Roubini Global Economics, explains why the global economy isn’t facing the same conditions as 2008, and discusses expectations for the Federal Reserve's rate hike path and how QE is working in Europe. He speaks from the World Economic Forum in Davos, Switzerland on "Bloomberg Surveillance." (Source: Bloomberg)... http://www.bloomberg.com/news/videos/2016-01-22/nouriel-roubini-global-economy-not-back-to-2008
Global Stocks Surge Most Since 2012 on Stimulus Bets, Oil Rally by Jeremy Herron Anna-Louise Jackson January 22, 2016; ....Global stocks surged the most in 3 1/2 years, as U.S. equities joined a rally that pushed oil to its best two days since 2009 on speculation that central banks will expand stimulus measures to counter turmoil in financial markets. Haven assets from Treasuries to gold retreated..... http://www.bloomberg.com/news/articles/2016-01-21/asian-futures-point-to-rebound-amid-oil-jump-stimulus-prospects
China's Rich Stock Valuations Fuel Overseas Bargain Hunt: Chart by Jonathan Browning January 22, 2016 http://www.bloomberg.com/news/articles/2016-01-22/china-s-rich-stock-valuations-fuel-overseas-bargain-hunt-chart
China's Acquisition Spree Won't End Well 15 JAN 21, 2016 By Michael Schuman; ... China is on a shopping spree. On Jan. 12, Chinese property developer Dalian Wanda bought control of Hollywood film producer Legendary Entertainment for $3.5 billion. Just three days later, the appliance giant Haier acquired General Electric's white goods business for $5.4 billion.... The deals are just drops in a gushing torrent of Chinese overseas spending. Foreign direct investment from China reached $111 billion in 2015, by one estimate -- 10 times more than a decade earlier. http://www.bloombergview.com/articles/2016-01-22/china-s-acquisition-spree-won-t-end-well
22 Jan 2016: Talk of oil rebound pushing to short covering, Soros view on China, China talks to soothe market, EMM outflows and China OFDI frenzy, Brent crude 29.61
Editor's notes:
- Was just chatting with veteran Southeast Asia regional economist over breakfast yesterday and marvelling at the dismal news flow and the importance of business media in swinging moods! Question: Isn't it broadly good that prices are down for most people (barring those in over-capacity sectors shedding jobs?).
- Also chatted with one of the smartest business investors I know. Mulling the question of overcapacities. Also on prevalence of problem of emerging / frontier market investments having lower return than those in developed markets. And the news of capital outflow form EMM. The FDI boom reconsidered on returns problems? And look at the China OFDI push!
]
- Source: Major loss of capital for emerging markets - Net outflows last year amounted to $1 trillion, with China making up bulk of it by Aaron Low 21 Jan 2016, http://www.straitstimes.com/business/companies-markets/major-loss-of-capital-for-emerging-markets
- Some market volatility mediation measures coming back in again? I've liked El-Erian commentary for a long time, so here's his comment below (LinkedIn screenshot).
George Soros Says He Expects Hard Landing for China Economy by Katherine Burton January 22, 2016 http://www.bloomberg.com/news/articles/2016-01-21/george-soros-says-he-expects-hard-landing-for-chinese-economy
Chinese Firms Are Deep in an Overseas Shopping Frenzy by Fox Hu Jonathan Browning January 22, 2016 — 12:00 AM SGT Updated on January 22, 2016. Listed companies announce $8.6 billion acquisitions this month. Outbound deal flow on track to overtake last year's record....Pricey stocks leave ample room for Chinese companies to boost returns by buying more profitable assets overseas for less. With domestic firms valued at more than three times the level in the U.S., what was previously a select group of China’s outbound acquirers is set to widen, helping the nation continue its record dealmaking run. “They’re trading at high multiples but often have lower earnings, and it’s about time that they take advantage of elevated valuations to buy something sizeable and something concrete,” said Samson Lo, head of Asia mergers and acquisitions at UBS Group AG. “In a sense, these companies are acting like financial investors.”.... http://www.bloomberg.com/news/articles/2016-01-21/chinese-firms-mind-the-value-gap-and-prowl-for-deals-overseas
China Vice President Vows to ‘Look After’ Stock Market Investors by John Micklethwait John Fraher, January 21, 2016 http://www.bloomberg.com/news/articles/2016-01-21/china-vice-president-vows-to-look-after-stock-market-investors
China Has No Intention to Devalue Yuan, Vice President Li Says by John Micklethwait Enda Curran January 21, 2016 http://www.bloomberg.com/news/articles/2016-01-21/china-has-no-intention-to-devalue-yuan-vice-president-li-says
Asian Stocks Bounce as Stimulus Talk Boosts Japan; Oil Nears $30 by Emma O'Brien Jonathan Burgos, http://www.bloomberg.com/news/articles/2016-01-21/asian-futures-point-to-rebound-amid-oil-jump-stimulus-prospects
21 Jan 2016: Entering margin call territory? Low shipping rates. Davos elites worry about oil and focus on cost cut push, Pope ticks off rich club, will US shale wipeout on $30 oil, Commodities Crash Boosts China's New Silk Road, Barclays cut IBank jobs with worst cuts in Asia, Brent crude 27.88
Editor's note: El Erian writes: "US Stock Market Update: Along with today 3% drop so far, markets are starting to see cascading technical dislocations that typically accelerate disorderly de-leveraging." And he mentions the C word - contagion. More news on job rationalisation even at J&J. My business media friends in this part of the world tell me they also had job cuts (preparing for 2 years of lean). Notable in Davos linked news is that the 1% now have more than the 99%. Thus, I'm happy to read this note on the question balancing fairness and efficiency - the writer reckons that the "efficiency" narrative is a hegemonic message....
- Balancing Fairness and Efficiency By Noah Smith 31 JAN 11, 2016; One common criticism of economics is that it focuses too much on efficiency, and not enough on things like equality, fairness and the welfare of future generations. In the extreme version of the criticism, the focus on efficiency is a deliberate plot to keep resources in the hands of the wealthy.... http://www.bloombergview.com/articles/2016-01-11/a-fair-world-doesn-t-have-to-be-an-inefficient-one
DoubleLine's Gundlach: Stock, credit declines suggest margin calls NEW YORK | BY JENNIFER ABLAN Jan 20, 2016 http://www.reuters.com/article/us-doubleline-gundlach-idUSKCN0UY2EH
Fannie Mae Shares Are Now Worth $1: Chart by Katherine Chiglinsky January 20, 2016 http://www.bloomberg.com/news/articles/2016-01-20/fannie-mae-plunges-below-1-tumbling-70-from-2015-peak-chart
In Private Davos Meeting, Oil Chiefs Push Plan to Reduce Costs by Javier Blas January 20, 2016 http://www.bloomberg.com/news/articles/2016-01-20/in-private-davos-meeting-oil-chiefs-push-plan-to-reduce-costs
Oil's Nightmare Scenario Dominates Davos by Javier Blas and Grant Smith January 20, 2016 http://www.bloomberg.com/news/articles/2016-01-20/davos-view-on-oil-lower-for-longer-turning-into-something-worse
Oil below $30 fans wipeout fears among U.S. shale survival artists YORKTOWN, TEXAS | BY TERRY WADE AND ANNA DRIVER http://www.reuters.com/article/us-usa-oil-shale-idUSKCN0UY0FC
Pope tells Davos elite: Consider your role in creating poverty Jan 20, 2016 http://www.reuters.com/article/us-davos-meeting-pope-idUSKCN0UY1XT
'Middle-class Joe' Biden tells Davos bosses to look after workers Jan 20, 2016 http://www.reuters.com/article/us-davos-meeting-biden-idUSKCN0UY2FY
Commodities Crash Boosts China's New Silk Road by Ting Shi January 21, 2016; ... lump could prove a blessing for President Xi Jinping’s signature initiative to build an intercontinental web of infrastructure and trade links with China at the center.... The New Silk Road program announced by Xi more than two years ago is finally gathering steam just as the prices of oil, steel, concrete and other building materials sink. That’s making it easier for China to sell its ambitious vision to build roads, railways, pipelines and ports from Xian to Athens, diversifying the country’s trade options and exporting the excess industrial capacity that’s dragging down its own economy... The so-called Silk Road Economic Belt and 21st-Century Maritime Silk Road -- or "One Belt, One Road," for short -- sits at the center of Xi’s effort to bolster geo-economic clout across more than 70 countries in Asia, Europe and Africa. With many nations along the route dependent on commodities exports, the prices slump could make them more willing to accept Beijing’s investment pitch and a share of its $40 billion Silk Road infrastructure fund....http://www.bloomberg.com/news/articles/2016-01-20/commodities-meltdown-boosts-china-s-bid-to-build-new-silk-road
US - How Bad Are the Job Cuts? By Rani Molla Jan 21, 2016 ... With Johnson & Johnson announcing 3,000 job cuts on Tuesday and Macy's announcing the same number of cuts earlier this month, 2016 is off to a dismal start for some U.S. workers. But how bad is it? Certainly it's no 2009 yet, when companies announced more than 900,000 job cuts, according to Bloomberg data for public and private North American companies. Last year, nearly 300,000 jobs were cut. ..http://www.bloomberg.com/gadfly/articles/2016-01-20/job-cuts-how-bad-are-they-
20 Jan 2015: IEA sees risk of 1.5 million barrel glut, Davos elites not worrying about economic risks? Eye on Yuan. Brent crude 28.76
IEA Sees Risk of World Drowning in Oil by Grant Smith January 19, 2016; ...The IEA trimmed 2016 estimates for global oil demand as China’s economic expansion weakens and raised forecasts for supplies outside the Organization of Petroleum Exporting Countries. While non-OPEC supply is set to drop 600,000 barrels a day in 2016, Iran’s comeback could fill that gap by the middle of the year. As a result, world markets may be left with a surplus of 1.5 million barrels a day in the first half....http://www.bloomberg.com/news/articles/2016-01-19/iea-says-oil-rout-could-deepen-as-market-drowns-in-oversupply
IMF Global Forecast 'Largely Nonsensical': Paul Donovan UBS http://www.bloomberg.com/news/articles/2016-01-19/imf-trims-global-outlook-as-brazil-slump-oil-weigh-on-expansion
Dollar's advance stalls as crude wobbles, sterling near seven-year low TOKYO | BY SHINICHI SAOSHIRO Jan 19, 2016 http://www.reuters.com/article/us-global-forex-idUSKCN0UY01S
Davos Gets Jittery as Trump Rises, Oil Falls and China Slows by Simon Kennedy and Matthew Campbell January 20, 2016 http://www.bloomberg.com/news/articles/2016-01-19/davos-gets-jittery-as-trump-rises-oil-falls-and-china-slows
The Charts That Tell You Everything About Davos - Risks, robots, rock stars, and the global elite. by Jennifer Ryan January 20, 2016 http://www.bloomberg.com/news/articles/2016-01-19/davos-2016-the-charts-that-say-world-economic-forum-
Aberdeen Is Loading Up on Stocks And Wants More If Rout Deepens by Roxana Zega January 20, 2016; .. While Aberdeen has suffered withdrawals and its own shares have slumped 55 percent since April, the company isn’t the only one betting on a recovery in emerging markets.... After plunging to an almost seven-year low, stocks in the MSCI Emerging Markets Index are 29 percent cheaper than those in advanced nations... http://www.bloomberg.com/news/articles/2016-01-20/aberdeen-is-loading-up-on-stocks-and-wants-more-if-rout-deepens
Hedge Fund That Called Subprime Crisis Says Yuan Should Fall 50% by Saijel Kishan January 20, 2016 http://www.bloomberg.com/news/articles/2016-01-19/hedge-fund-that-called-subprime-crisis-says-yuan-should-fall-50-
Strong El Nino Seen Sticking Around as Cyclones Delay Demise by Phoebe Sedgman January 19, 2016; ... Recent tropical cyclone activity in the Pacific Ocean has produced strong westerly winds along the equator, which may temporarily slow El Nino’s decline, Australia’s Bureau of Meteorology said Tuesday on its website...http://www.bloomberg.com/news/articles/2016-01-19/strong-el-nino-seen-sticking-around-as-cyclones-delay-demise
18 Jan 2015: Bloomberg - Brent dips below $28 on Iran, miners routed, emerging market rout indicators but China bracing for worse (on market overvaluation?), listening to El-Erian on oil
Editor's note: I was just watching this - El-Erian: 'Massive' Supply Disruption to Lift Oil Prices January 16, 2016 http://www.bloomberg.com/news/videos/2016-01-15/el-erian-massive-supply-disruption-to-lift-oil-prices; where he says oil below $30 is not fundamental, unless there has been market change e.g. loss of swing producer, which market needs to adjust to.
Brent Drops Below $28 as Iran Sanctions Lift Set to Worsen Glut by Anthony Dipaola and Ben Sharples BenSharps anuary 18, 2016 http://www.bloomberg.com/news/articles/2016-01-17/brent-oil-extends-decline-below-28-as-iran-set-to-worsen-glut
Oil Speculators Raise Bets on Falling Prices to All-Time High by Mark Shenk January 18, 2016 http://www.bloomberg.com/news/articles/2016-01-18/oil-speculators-raise-bets-on-falling-prices-to-all-time-high
Miners Routed as Crude Oil Tumbles, Goldman Predicts More Losses by David Stringer January 18, 2016 http://www.bloomberg.com/news/articles/2016-01-17/miners-routed-as-crude-oil-tumbles-goldman-predicts-more-losses
Five Charts Show How Bad the Emerging-Market Stock Rout Really Is by Phil Kuntz January 18, 2016 — 2:14 AM SGT. Developing-nation stocks have lost 12 percent in three weeks. Middle East and Latin American markets are at oversold levels. http://www.bloomberg.com/news/articles/2016-01-17/emerging-market-rout-visualized-in-graphs-shows-abundant-gloom
China's Stock Strategists Are Bracing for a Deeper Bear Market by Bloomberg News January 18, 2016 http://www.bloomberg.com/news/articles/2016-01-18/china-s-stock-strategists-are-bracing-for-a-deeper-bear-market
17 Jan 2015: Iran to boost oil exports, Wal-Mart trims stores and affecting 16,000 jobs, Brent Crude 28.94
Iran Kicks Off Plan to Boost Oil Exports as Sanctions Lifted by Anthony Dipaola and Hashem Kalantari January 17, 2016; Country seeking immediate increase of 500,000 barrels a day. Greater Iran sales to pressure prices amid oil glut: Mills. http://www.bloomberg.com/news/articles/2016-01-17/iran-kicks-off-plan-to-boost-oil-exports-as-sanctions-lifted
The Simple Truth About China’s Market - It’s not just clumsy trading rules that have made the mainland’s stocks so risky. By Zeke Faux January 15, 2016 http://www.bloomberg.com/news/articles/2016-01-14/the-simple-truth-about-china-s-market
Wal-Mart Makes Rare Retreat on Home Turf - Closing of 269 stores includes all 102 U.S. Walmart Express stores, affects 16,000 jobs By SARAH NASSAUER and KATE DAVIDSON Updated Jan. 15, 2016 7:22 p.m. ET; Wal-Mart is closing more than 150 stores in the U.S., a rare retreat for the behemoth on its home turf, capping what has been a difficult year for retailers as shoppers slowed their spending pace and accelerated their shift to the Internet. Economic data released on Friday showed the U.S. economy entered 2016 with little momentum from one of its key sectors. U.S. retail sales fell 0.1% in December, and were up just 2.1% for all of 2015, compared with a 3.9% annual gain the previous year, the Commerce Department said on... http://www.wsj.com/articles/wal-mart-to-close-269-stores-globally-1452868122?tesla=y
Bloomberg: The company plans to close 269 stores, including its experimental small-format Express outlets, in a push to streamline the chain. More than 16,000 jobs will be affected. The numbers sound ominously large, but the plan will affect less than 1 percent of the company’s total square footage and revenue. Investors don’t seem to think the cuts are enough; shares fell 1.8 percent after the announcement.... Wal-Mart to Shut Hundreds of Stores by Shannon Pettypiece January 15, 2016; .... The move by the largest private employer in the U.S. will affect about 10,000 jobs domestically at 154 locations, according to a statement Friday. Overseas, the effort will eliminate 6,000 jobs and includes the closing of 60 money-losing stores in Brazil, a country where Wal-Mart has struggled.....http://www.bloomberg.com/news/articles/2016-01-15/wal-mart-to-shut-hundreds-of-stores-including-express-locations?cmpid=BBD011516_BIZ
The Simple Truth About China’s Market - It’s not just clumsy trading rules that have made the mainland’s stocks so risky. By Zeke Faux January 15, 2016 http://www.bloomberg.com/news/articles/2016-01-14/the-simple-truth-about-china-s-market
Wal-Mart Makes Rare Retreat on Home Turf - Closing of 269 stores includes all 102 U.S. Walmart Express stores, affects 16,000 jobs By SARAH NASSAUER and KATE DAVIDSON Updated Jan. 15, 2016 7:22 p.m. ET; Wal-Mart is closing more than 150 stores in the U.S., a rare retreat for the behemoth on its home turf, capping what has been a difficult year for retailers as shoppers slowed their spending pace and accelerated their shift to the Internet. Economic data released on Friday showed the U.S. economy entered 2016 with little momentum from one of its key sectors. U.S. retail sales fell 0.1% in December, and were up just 2.1% for all of 2015, compared with a 3.9% annual gain the previous year, the Commerce Department said on... http://www.wsj.com/articles/wal-mart-to-close-269-stores-globally-1452868122?tesla=y
Bloomberg: The company plans to close 269 stores, including its experimental small-format Express outlets, in a push to streamline the chain. More than 16,000 jobs will be affected. The numbers sound ominously large, but the plan will affect less than 1 percent of the company’s total square footage and revenue. Investors don’t seem to think the cuts are enough; shares fell 1.8 percent after the announcement.... Wal-Mart to Shut Hundreds of Stores by Shannon Pettypiece January 15, 2016; .... The move by the largest private employer in the U.S. will affect about 10,000 jobs domestically at 154 locations, according to a statement Friday. Overseas, the effort will eliminate 6,000 jobs and includes the closing of 60 money-losing stores in Brazil, a country where Wal-Mart has struggled.....http://www.bloomberg.com/news/articles/2016-01-15/wal-mart-to-shut-hundreds-of-stores-including-express-locations?cmpid=BBD011516_BIZ
15 Jan 2015: Renewables investment still at record, Bank of Indonesia cuts rates to prioritise growth, Jakarta attack brings IS to Southeast Asia
Solar and Wind Just Did the Unthinkable - Cheap oil and gas couldn't stop another record year for renewables, or a turning point for energy investment. by Tom Randall January 14, 2016 http://www.bloomberg.com/news/articles/2016-01-14/solar-and-wind-just-did-the-unthinkable
Bank of Indonesia Cuts Rates to 7.25% by Chris Brummitt and Rieka Rahadiana January 14, 2016 http://www.bloomberg.com/news/articles/2016-01-14/indonesia-cuts-interest-rate-prioritizing-growth-over-currency
Indonesia Attack Brings Islamic State to Southeast Asia's Door by Chris Brummitt January 15, 2016; Gun and suicide bomb assault follows months of warnings. Police say attack planned by Indonesian in IS stronghold Raqqa. http://www.bloomberg.com/news/articles/2016-01-14/indonesia-attack-brings-islamic-state-to-southeast-asia-s-door
14 Jan 2015: Bloomberg news scan - For Real Oil Prices, the Crash Is Even Bigger, China yuan drop but lots of stocks oversold, Brent Crude 29.94 9:15PM EST
Editor's note: This morning, Brent dipped below $30! Looking at the start of this posting on oil price (and macro), I've been tracking the news since the slide from $85. Looking back, I recall being particularly interested when the previous low (June 2012) was broken; see price chart from Bloomberg screen shot, with approximate blog start date indicated:
Source: Generic 1st 'CO' Future CO1:COM
http://www.bloomberg.com/quote/CO1:COM
For Real Oil Prices, the Crash Is Even Bigger as China Fizzles by Grant Smith January 14, 2016; ....West Texas Intermediate futures, the U.S. benchmark, sank below $30 a barrel on Tuesday for the first time since 2003. Actual barrels of Saudi Arabian crude shipped to Asia are even cheaper, at $26 -- the lowest since early 2002 once inflation is factored in and near levels seen before the turn of the millennium; .... West Texas Intermediate futures, the U.S. benchmark, sank below $30 a barrel on Tuesday for the first time since 2003. Actual barrels of Saudi Arabian crude shipped to Asia are even cheaper, at $26 -- the lowest since early 2002 once inflation is factored in and near levels seen before the turn of the millennium.....http://www.bloomberg.com/news/articles/2016-01-14/for-real-oil-prices-the-crash-is-even-bigger-as-china-fizzles
HSBC's Bloom Says Speed of Yuan Drop Is Frightening http://www.bloomberg.com/news/videos/2016-01-14/hsbc-s-bloom-says-speed-of-yuan-drop-is-frightening-video-
The Good News for China Is Hundreds of Stocks Oversold: Chart by Phil Kuntz January 14, 2016 http://www.bloomberg.com/news/articles/2016-01-13/china-s-good-news-hundreds-of-stocks-oversold-in-rout-chart
Iron Ore `Not Yet at the Bottom' as Citigroup Says $20s Possible by Jasmine Ng January 14, 2016 http://www.bloomberg.com/news/articles/2016-01-14/iron-ore-not-yet-at-the-bottom-as-citigroup-says-20s-possible
Goldman Said to Mull Cutting Fixed-Income Staff More Than 5% by Michael J Moore January 14, 2016 http://www.bloomberg.com/news/articles/2016-01-14/goldman-said-to-weigh-cutting-more-than-5-of-fixed-income-staff
12 Jan 2016: Bloomberg - Oil Extends Losses From 12-Year Low as Stockpiles Seen Expanding, China's Demand for Crude is Showing Signs of Cracking, 2016 growth losers, Brent Crude 31.33
Note:
- The recent price drop from around $38 toward $31 may highlight these major producers by cost: United States $36.20, Norway $36.10, Angola $35.40, Colombia $35.30, Nigeria$31.60. See diagram below.
- Certainly also issues for POGO food-fuel price spread re. biodiesel.
- China GDP and oil demand is eyed, and into the future, car makers start to worry about tech disruption to their industry.
Source: What it costs to produce oil By Alanna Petroff and Tal Yellin / CNNMoney - The collapse in the price of oil has squeezed energy companies and countries that were betting on higher returns. Here’s what it costs on average to pump a barrel of oil in the 20 biggest oil producing nations. http://money.cnn.com/interactive/economy/the-cost-to-produce-a-barrel-of-oil/index.html?iid=EL.
Oil tumbles nearly 5 percent to new lows; analysts warn of $20s - A brutal new year selloff in oil markets deepened on Monday, with prices plunging as much as 5 percent to new 12-year lows as further ructions in the Chinese stock market threatened to knock crude into the $20s. http://uk.reuters.com/article/idUKKCN0UP01T20160111
Oil Extends Losses From 12-Year Low as Stockpiles Seen Expanding by Ben Sharples January 12, 2016, Inventories probably rose 2 million barrels last week: survey, Iran to starting selling new oil grade before boosting exports... http://www.bloomberg.com/news/articles/2016-01-11/oil-extends-decline-from-12-year-low-as-stockpiles-seen-rising
China's Demand for Crude is Showing Signs of Cracking - Resilient supply isn't the only problem for crude. by Luke Kawa, January 11, 2016; http://www.bloomberg.com/news/articles/2016-01-11/china-s-demand-for-crude-is-showing-signs-of-cracking
The End of the Monetary Illusion Magnifies Shocks for Markets by Simon Kennedy January 8, 2016; Central banks no longer have as much room to deliver stimulus. HSBC says currencies most sensitive to policy in 15 years... Central bankers are no longer the circuit breakers for financial markets. Monetary-policy makers, market saviors the past decade through the promise of interest-rate reductions or asset purchases, now lack the space to cut further -- if at all -- or buy more. Even those willing to intensify their efforts increasingly doubt the potency of such policies. That’s leaving investors having to cope alone with shocks such as this week’s rout in China or when economic data disappoint, magnifying the impact of such events....http://www.bloomberg.com/news/articles/2016-01-08/the-end-of-the-monetary-illusion-magnifies-shocks-for-markets
Meet 2016's Worst Economic Performers by Andre Tartar, A Catarina Saraiva, Cynthia Li, January 11, 2016; Oil-rich Venezuela will contract by 3.3 percent this year, the worst forecast of any of the 93 countries in our analysis, followed by junk-rated Brazil, debt-laden Greece and commodities-ravaged Russia. Below are the bottom 10....
http://www.bloomberg.com/news/articles/2016-01-11/meet-2016-s-worst-economic-performers-flirting-with-disaster?cmpid=BBD011116
The driverless, car-sharing road ahead - Carmakers increasingly fret that their industry is on the brink of huge disruption Jan 9th 2016; ...Now, Mr Fields is talking about autonomous cars being ready to roll by 2020. More conservative car bosses add five years.... Barclays, another bank, forecasts that the fully driverless vehicle will result in the average American household cutting its car ownership from 2.1 vehicles now to 1.2 by 2040.... The 11m or so annual sales of mass-market cars for personal ownership in America may be replaced by 3.8m sales of self-driving cars, either personally owned or part of taxi fleets, Barclays thinks....http://www.economist.com/news/business/21685459-carmakers-increasingly-fret-their-industry-brink-huge-disruption?cid1=cust/noenew/n/n/n/20160111n/owned/n/n/nwl/n/n/n/email
6 Jan 2016: Mideast tensions trumped by oil supply glut? Markets start off rough - China's terrible start; Brent Crude 36.51
Editor's note: O&G job cuts are the making rounds in social media - I've seen this twice now (looks like Maybank report):
This Time Mideast Tensions Are Bad News for Oil by Angelina Rascouet and Anthony Dipaola January 5, 2016; ... That the rally this time couldn’t be sustained shows just how abnormal things are in the oil market. Brent crude is little changed this week as a global supply glut and the slowest Chinese growth in a generation trumped mounting strife between the nations on either side of the world’s busiest waterway for oil tankers.... http://www.bloomberg.com/news/articles/2016-01-04/oil-shrugs-as-glut-blunts-shock-from-deeper-saudi-iran-conflict?cmpid=BBD010516_BIZ
China's Terrible Start to 2016 Has Beijing Fighting Market Fires by Bloomberg News http://www.bloomberg.com/news/articles/2016-01-05/china-s-terrible-start-to-2016-has-beijing-fighting-market-fires?cmpid=BBD010516_BIZ
Won Drops With Kospi on Quake Near North Korea Nuclear Test Site by Justina Lee January 6, 2016 http://www.bloomberg.com/news/articles/2016-01-06/won-drops-with-kospi-on-quake-near-north-korea-nuclear-test-site
4 Jan 2016: Big oil to cut investment again in 2016 - at around $37 a barrel, crude prices are well below the $60 some companies need, Saudi Arabia Cuts Ties With Iran, China factories slump, Brent Crude 37.93
Big oil to cut investment again in 2016 By Karolin Schaps and Ron Bousso Jan 3, 2016; At around $37 a barrel, crude prices are well below the $60 firms such as Total (TOTF.PA), Statoil STO.OL and BP (BP.L) need to balance their books, a level that has already been sharply reduced over the past 18 months. International oil companies are once again being forced to cut spending, sell assets, shed jobs and delay projects as the oil slump shows no sign of recovery. U.S. producers Chevron (CVX.N) and ConocoPhillips (COP.N) have published plans to slash their 2016 budgets by a quarter. Royal Dutch Shell (RDSa.L) has also announced a further $5 billion in spending cuts if its planned takeover of BG Group (BG.L) goes ahead. http://uk.reuters.com/article/uk-oil-companies-investments-idUKKBN0UH0AG20160103Saudi Arabia Cuts Ties With Iran After Tehran Embassy Attack by Zaid Sabah and Deema Almashabi January 4, 2016 http://www.bloomberg.com/news/articles/2016-01-03/saudis-cut-diplomatic-ties-with-iran-foreign-minister-says-iiyzvsw5
Oil Finds a Silver Lining in China's Unsated Thirst for Crude by Bloomberg News January 4, 2016. Imports seen expanding 8% to 7.2 million barrels a day in 2016. Demand will be driven by stockpiling, independent refiners http://www.bloomberg.com/news/articles/2016-01-04/oil-finds-a-silver-lining-in-china-s-unsated-thirst-for-crude
China's Two-Speed Economy Stays Intact as Factories Slump, Services Gain by Bloomberg News http://www.bloomberg.com/news/articles/2016-01-03/two-speed-china-economy-intact-as-factories-slump-services-gain
China Factory Gauge Signals Contraction Continued a Fifth Month by Bloomberg News January 1, 2016 http://www.bloomberg.com/news/articles/2016-01-01/china-s-factory-gauge-edges-up-as-stimulus-gains-traction
20 December 2015: Crude stockpiles highest for this time of year since 1930: EIA, Oil at Six-Year Low as Glut Worsens While Fed Boosts Dollar, Indonesia Stays on Hold as Fed Move Stokes Currency Fears, Brent Crude 36.88
Oil heads for third straight weekly loss as supply weighs Dec 18, 2015 LONDON | By Karolin Schaps; The global supply glut that brought prices close to 11-year lows this week means Brent will post losses for a third consecutive year, the first time that has happened since exchange-based oil trading started in the 1980s.... Prominent oil trader Pierre Andurand said prices could fall below $25 a barrel in the first quarter of 2016.... http://www.reuters.com/article/us-global-oil-idUSKBN0U103V20151218
Oil at Six-Year Low as Glut Worsens While Fed Boosts Dollar by Rakteem Katakey and Ramsey Al-Rikabi December 18, 2015; Crude stockpiles highest for this time of year since 1930: EIA. Fed-induced dollar rally pushes commodities to 16-year low http://www.bloomberg.com/news/articles/2015-12-17/oil-set-for-third-weekly-loss-as-supply-glut-seen-relentless
This Year's Worst Commodity Is One You Probably Can't Pronounce by Sonja Elmquist and Joe Deaux December 18, 2015 http://www.bloomberg.com/news/articles/2015-12-18/this-year-s-worst-commodity-is-one-you-probably-can-t-pronounce
Glencore's Rating Cut at Moody's Though Outlook Seen Stable by Jesse Riseborough December 18, 2015; `Pricing environment in mining will remain unfavorable' Trading division will contribute `strongly' to profit: Moody's
Indonesia Stays on Hold as Fed Move Stokes Currency Fears December 17, 2015; Central bank decision forecast by 21 out of 22 economists. Vice president had been calling for cut to boost growth. http://www.bloomberg.com/news/articles/2015-12-17/indonesia-stays-on-hold-as-fed-rate-move-stokes-currency-fears
Dollar Rally Is Over for $60 Billion Unit of Norway's Top Bank by Jonas Cho Walsgard December 20, 2015; DNB says drop in commodities also getting `long in the tooth' DNB says room for profit margins to increase in Europe; For the unit at Norway’s biggest bank deciding how to invest client funds, 2016 will be a pivotal year as it predicts the rally in the U.S. dollar will finally come to an end. DNB Asset Management, which oversees about $60 billion, is adjusting its portfolio to profit from its forecast for a less buoyant dollar and a recovery in emerging markets and commodities...... The asset manager has “shaved a little bit off” its overweight in equities in technology stocks, consumer cyclicals, health care and finance, while moving up to market weight for its holdings in energy and materials. DNB Asset Management, which holds 70 percent in fixed income, 20 percent in equity and 10 percent is real estate, is overall neutral on equities. A low-growth outlook with flat earnings, monetary policies beyond a maximum point of liquidity and “neutral” pricing are all reason to be cautious, Mikkelsen said.... http://www.bloomberg.com/news/articles/2015-12-20/dollar-rally-is-over-for-60-billion-unit-of-norway-s-top-bank
16 December 2015: China decision to suspend fuel cuts puts $38 floor under oil prices? Oil in $20s a Risk as Citigroup Sees Crude Storage Tanks Fill Up and other Bloomberg news links, World Bank - 2016 will be "another disappointing year for the global economy as a whole, but especially for emerging markets and raw commodity producers; Brent Crude 38.37
China Has Something to Tell OPEC: Oil Prices Have Fallen Too Far by Bloomberg News December 16, 2015; Decision to suspend fuel cuts puts $38 floor under oil prices, OPEC effectively abandoned crude production quota on Dec. 4... “China’s decision to not cut refined product (gasoline, diesel) prices is a first,” analysts including Neil Beveridge wrote in the report. The move “sends a signal to OPEC that its largest customer (China) believes that oil prices are too cheap.” China, the world’s second-biggest oil consumer, said it will suspend fuel price cuts while crude continues to fall in order to slow consumption growth and trim automobile emissions. Gasoline demand in the country increased 10.4 percent in the first 10 months of the year from the same period of 2014, according to the Paris-based International Energy Agency. http://www.bloomberg.com/news/articles/2015-12-16/china-has-something-to-tell-opec-oil-prices-have-fallen-too-far
World Bank president interview - The time is right for structural reforms by KEN MORIYASU, Nikkei staff writer; TOKYO -- For emerging markets, the state of "nirvana" they have been enjoying appears to be over. The commodities super cycle has ground to a halt, global trade is sagging, and investor confidence about keeping money in developing markets is declining rapidly. World Bank President Jim Yong Kim sees this as a defining moment, a crossroads, where countries decide whether they will go down the path of structural reform or stay the course..... Pure commodity exporters need to focus more on value-added. Instead of shipping out raw commodities, they need to be involved in processing them. Many economies have to diversify the sources of their economic growth. With oil and gas prices so low, it is also the right time to remove fossil fuel subsidies," he said....... Kim said that 2016 will be "another disappointing year for the global economy as a whole, but especially for emerging markets. There is much slower growth in emerging markets." In the "Global Economic Prospects" report issued in June, the World Bank set its 2016 growth forecast at 3.3% for the whole world and 5.2% for developing countries. The bank is expected to bring down both in the next Global Economic Prospects report due in January 2016.... http://asia.nikkei.com/Politics-Economy/Economy/The-time-is-right-for-structural-reforms
Oil in $20s a Risk as Citigroup Sees Crude Storage Tanks Fill Up by Grant Smith December 15, 2015 http://www.bloomberg.com/news/articles/2015-12-15/oil-in-20s-a-risk-as-citigroup-sees-crude-storage-tanks-fill-up
Why Forecasting Commodity Prices May Be Pointless December 16, 2015 Aswath Damodaran, a New York University professor, discusses the outlook for commodity companies with Bloomberg's Alix Steel, Joe Weisenthal and Scarlet Fu on "What'd You Miss?" (Source: Bloomberg) http://www.bloomberg.com/news/videos/2015-12-15/why-forecasting-commodity-prices-may-be-pointless
Japan's Pampered Cows Eat Cheap Feed to Get Profit on $250 Steak by Aya Takada December 16, 2015 http://www.bloomberg.com/news/articles/2015-12-15/japan-s-pampered-cows-eat-cheap-feed-to-get-profit-on-250-steak
Here's What 7 Years at Zero Rates Have Looked Like - Charting out the forces that kept policy easy by Jeanna Smialek December 16, 2015 http://www.bloomberg.com/news/articles/2015-12-16/here-s-what-7-years-at-zero-rates-have-looked-like
China Seen Laying Down $15 Billion Bet on Electric Vehicles by Bloomberg News December 16, 2015 http://www.bloomberg.com/news/articles/2015-12-15/china-seen-laying-15-billion-bet-future-of-autos-is-electric
14 December 2015: IEA Warns of Worsening Oil Glut, oil slump biggest risk for Malaysia debt, climate deal requires $16.5 trillion, mining woes hit big miners, COP 21 links, Brent Crude 37.93
COP21: Paris climate deal is 'best chance to save planet' 13 December 2015 http://www.bbc.com/news/science-environment-35086346
IEA Warns of Worsening Oil Glut http://bloom.bg/1jTVfWp
Oil Slump Now Biggest Risk for Malaysia Debt as 1MDB Mess Fixed by Elffie Chew and Lilian Karunungan December 11, 2015; Fitch warns 2016 deficit may exceed prime minister's target. Default risk heads for biggest quarterly drop in four years. As Malaysia’s debt-ridden state investment company finds buyers for its assets, investors say slumping oil is the biggest threat still hanging over the nation’s finances. http://www.bloomberg.com/news/articles/2015-12-10/1mdb-fix-leaves-oil-as-malaysia-debt-risk-with-najib-digging-in
Climate Deal Requires $16.5 Trillion Investment to Cut Pollution by Alex Morales and Ewa Krukowska December 13, 2015; UN deal in Paris would require much deeper fossil fuel cuts. Envoys from 187 nations submit action plans to cut emissions The deal struck at United Nations climate talks requires an overhaul of historic proportions for energy policies worldwide and a huge investment in cleaning up the pollution now damaging the Earth’s atmosphere. Targets outlined in the agreement on Saturday, involving 195 countries, will require $16.5 trillion of spending on renewables and efficiency through 2030, according to the International Energy Agency. To accomplish that, governments will have to offer incentives for clean energy production, scale back support for fossil fuels like oil, make emissions more costly, and reduce deforestation. The changes will touch industries from transport to construction, and encourage people to change their behavior. http://www.bloomberg.com/news/articles/2015-12-13/climate-deal-requires-16-5-trillion-investment-to-cut-pollution
It's All Gone Wrong for One of World's Biggest Mining Companies by Thomas Biesheuvel December 9, 2015; Anglo American will shrink to a shadow of its former self. $14 billion Brazilian mine epitomizes company's decline.. Even for a company that once had the global monopoly on diamond production during almost a century of all but constant expansion, the collapse in commodities prices is proving too much... Anglo American Plc, a conglomerate spanning everything from brewing, publishing and gold mining during its peak in the early 1990s, will shrink beyond recognition after Chief Executive Officer Mark Cutifani on Tuesday announced a package of asset sales, mine closures and job cuts. Among the potential casualties is Minas Rio, a Brazilian iron-ore mine where spiraling costs and collapsing prices turned a $14 billion project into the epitome of the company’s predicament. “Minas Rio is the high water mark of their mistakes,” said Jeremy Wrathall, head of global natural resources at Investec Plc. “It was a series of strategic errors, the collective madness of the super cycle where everyone got it wrong.”... ... http://www.bloomberg.com/news/articles/2015-12-09/it-s-all-gone-wrong-for-one-of-world-s-biggest-mining-companies
12 December 2015: Markets and commodities down, China may loosen Yuan's peg
S&P 500 Loses Nearly 4% for the Week as Commodities Tumble - U.S. crude falls below $36 a barrel, hitting nearly seven-year low By by Corrie Driebusch Updated Dec. 11, 2015 http://www.wsj.com/articles/global-stocks-pressured-by-oil-and-fed-1449825582?tesla=y
China Signals Intention to Potentially Loosen Yuan's Peg to the U.S. Dollar - China's central bank signaled its intention to change the way it manages the yuan's value by potentially loosening its peg to the U.S. dollar and instead letting it track the currencies of its broader trading partners. In an editorial posted on its website Friday night, the People's Bank of China said it makes more sense to measure the yuan's exchange rate against a basket of currencies than the dollar alone. The foreign-exchange trading system run by the central bank will start calculating a yuan exchange-rate index Friday to provide a reference against a basket of currencies, the PBOC said. http://www.wsj.com/articles/chinas-central-bank-signals-intention-to-loosen-yuans-peg-to-dollar-1449843879?mod=djemalertMARKET
8 December 2015: Oil price hits fresh post 2009 lows as glut grows, oil-linked currencies take a beating, what a climate deal means for oil markets, carbon markets are making a comeback? Brent Crude 40.10
Brent Oil Falls Below $40 a Barrel - Fundamental concerns regarding oversupply still blight the market By Kevin Baxter Dec. 8, 2015 http://www.wsj.com/articles/oil-prices-rise-but-more-pain-is-expected-1449577680?mod=djemalertMARKET
Oil Tumbles as OPEC Opens the Taps on Output Target December 8, 2015, OPEC's decision to not limit oil production has sent prices tumbling further, as Brent Crude fell to six-year lows in London trading. Bloomberg's Julian Lee and David Wethe examine the influence OPEC holds over the oil industry and the prospect of even more oil flooding the market going forward. They speak on "Bloomberg Markets." (Source: Bloomberg) http://www.bloomberg.com/news/videos/2015-12-07/oil-tumbles-as-opec-opens-the-taps-on-output-target
Oil price hits fresh post 2009 lows as glut grows Dec 8, 2015 LONDON | By Dmitry Zhdannikov and Simon Falush... Oil prices resumed their slide on Tuesday, with U.S. crude falling below $37 per barrel for the first time since early 2009, amid fears the world was running out of capacity to store crude as a global glut intensifies. The global oversupply is being compounded by OPEC's failure last week to agree a production ceiling, with members Iran and Iraq promising to ramp up output and exports next year.... http://www.reuters.com/article/us-global-oil-idUSKBN0TR03420151208#YSJPuwbQvewlxJO3.99
OPEC's Oil Market Disarray Looks Like 1990s Slump All Over Again by Javier Blas December 8 2015 http://www.bloomberg.com/news/articles/2015-12-07/opec-s-oil-market-disarray-looks-like-1990s-slump-all-over-again
When Abu Dhabi Resembles Frontier Market You Know Oil Hurts by Ahmed A Namatalla and Arif Sharif December 8, 2015...Oil’s plunge to almost $40 a barrel is roiling the six-nation Gulf Cooperation Council, throwing government spending plans into disarray, sapping stock trading and valuations, driving up bank borrowing costs and ...http://www.bloomberg.com/news/articles/2015-12-08/when-abu-dhabi-resembles-frontier-market-you-know-oil-is-hurting
Cheap Oil Could Fuel Europe’s Refugee Crisis - As the price of oil falls, Iraq’s Kurds and the UN are struggling to look after those fleeing conflict. by Tom Mackenzie and Ed Kiernan December 8, 2015 http://www.bloomberg.com/news/articles/2015-12-08/oil-price-falls-could-make-europe-s-refugee-crisis-worse
Oil-linked currencies take a beating, Canadian dollar at 11-year low Tue Dec 8, 2015 LONDON | By Anirban Nag http://www.reuters.com/article/us-global-forex-idUSKBN0TQ2XE20151208#RPD6d5ogY1H0HLdM.99
Iron Ore in $30s Seen Near Tipping Point for Largest Miners by Jasmine Ng and David Stringer December 8, 2015 http://www.bloomberg.com/news/articles/2015-12-08/when-abu-dhabi-resembles-frontier-market-you-know-oil-is-hurting
What a climate deal means for oil markets By Michelle Patron December 8, 2015 Over the next two weeks countries from around the world are convening in Paris to develop a global plan to address climate change. A successful deal in Paris could have significant impacts for energy and equity markets.... The most immediate market impact is in the power sector where a strong agreement will extend and accelerate the shift from coal to alternative power sources including renewables, nuclear and in some cases natural gas. The International Energy Agency estimates that renewable energy will become the largest single power source by 2040 and the share of coal will decline from 41 to 31 percent.... Continued improvements in vehicle efficiency and removal of fossil fuel subsidies can moderately reduce demand with the impact growing over time as the vehicle fleet changes. Success in Paris can also inject momentum into global negotiations underway on aviation and marine fuel controls. Perhaps the most critical variable for oil is how a deal impacts alternative fuels in road transportation....The bottom line is that global climate action widens the range of risks in the energy sector. Ten years ago, German utilities were seen as stable investments, now they are struggling under the weight of policies pushing renewables and reductions in technology costs. Prudent companies and investors should begin factoring these risks into their oil portfolios now... http://blogs.reuters.com/great-debate/2015/12/07/what-a-climate-deal-means-for-oil-markets/
Carbon Markets Are Making a Slow, But Steady, Comeback by Alex Nussbaum, Ewa Krukowska, Mathew Carr December 8, 2015 - The prophets of carbon markets think their day has come. Again. OECD head chides politicians for being ``a little trivial''...Two decades ago, Richard Sandor had a grand plan to reduce the pollution that causes global warming -- and maybe get rich in the process. The rich part worked. For the rest, reality intervened. Today, Sandor’s vision of thriving global carbon markets -- capitalist arenas that would turn the right to pollute into a commodity like gold or oil and, over time, reduce emissions -- has fallen well short of the mark. In its first attempts, prices collapsed, trading waned and early enthusiasts withdrew. The invisible hand of the market has yet to establish a firm grip. But with 195 countries now wrestling in Paris over how to reduce harmful greenhouse gases, the father of carbon markets, as Sandor is often dubbed, and his fellow travelers remain unbowed. They maintain their ma ket-based solution, despite its stumbles, still offers the best way forward. “I do think it’s an inexorable trend,” said Sandor, who has some experience in the matter. The 74-year-old is a serial inventor of trading mechanisms and widely credited with creating interest-rate futures and helping propel the Chicago Board of Trade from grain and pork bellies to sophisticated financial derivatives. In 2003, he formed the world’s first carbon exchange, which he sold seven years later for $600 million....http://www.bloomberg.com/news/articles/2015-12-08/after-two-decades-of-stumbles-carbon-market-pioneers-revving-up
24 November 2015: Commodities strike 2002 bottom; end off low on oil - Saudi cooperation hope, hedge funds bearish US oil, Mexico windfall, China worries, Brent Crude 44.96
Dollar hovers near eight-month peak, buoyed by Fed policy expectations By Shinichi Saoshiro Nov 23, 2015 http://www.reuters.com/article/2015/11/24/us-global-forex-idUSKBN0TD00H20151124#jQp6CbwCrQlAODbE.97
Commodities strike 2002 bottom; end off low on oil Nov 23, 2015 NEW YORK | BY BARANI KRISHNAN http://www.reuters.com/article/2015/11/23/us-global-commodities-idUSKBN0TC1P220151123
Oil Advances as Saudi Arabia Reiterates Market Stability Pledge by Ben Sharples November 24, 2015 http://www.bloomberg.com/news/articles/2015-11-24/oil-trades-near-42-as-saudis-reiterate-market-stability-pledge
Cut Oil Supply or Drop Riyal Peg? Saudis Face ‘Critical’ Choice by Ahmed A Namatalla November 23, 2015 http://www.bloomberg.com/news/articles/2015-11-22/cut-oil-supply-or-drop-riyal-peg-saudis-face-critical-choice
OPEC Seen Holding the Line as $40 Oil Looms Over Vienna Meeting by Grant Smith and Mark Shenk November 24, 2015 http://www.bloomberg.com/news/articles/2015-11-24/opec-seen-holding-the-line-as-40-oil-looms-over-vienna-meeting
Oil Trades Near $42 as Saudi Arabia Says It's Ready to Cooperate by Mark Shenk November 23, 2015; ... Venezuela predicted prices may tumble to the mid-$20s a barrel unless OPEC tackles the global surplus. Venezuela is urging the group to adopt an “equilibrium price” that covers the cost of new investment in production capacity, Oil Minister Eulogio Del Pino said Sunday http://www.bloomberg.com/news/articles/2015-11-23/oil-declines-as-venezuela-sees-mid-20-crude-on-opec-inaction
Oil Deal of the Year: Mexico Set for $6 Billion Windfall by Javier Blas November 23, 2015 http://www.bloomberg.com/news/articles/2015-11-23/oil-deal-of-the-year-mexico-set-for-6-billion-hedging-windfall
Mining Stocks Lead Asia Losses as Metals Fall to Multi Year Lows by Adam Haigh and Emma O'Brien November 24, 2015 http://www.bloomberg.com/news/articles/2015-11-23/asian-equity-outlook-mixed-after-dollar-propels-copper-selloff
Hedge funds turn very bearish on U.S. crude: Kemp LONDON | BY JOHN KEMP Nov 23, 2015 http://www.reuters.com/article/2015/11/23/us-oil-hedgefunds-kemp-idUSKBN0TC1XW20151123
Bank of America: The 'Great Divorce' Between the World's Two Largest Economies Will Drive Currency and Rates Markets in 2016 - The "marriage of convenience" is over. by Luke Kawa November 24, 2015 http://www.bloomberg.com/news/articles/2015-11-23/bank-of-america-the-great-divorce-between-the-world-s-two-largest-economies-will-drive-currency-and-rates-markets-in-2016
A Hard Landing in China Could 'Shake the World' "A slowing China redistributes global economic activity through the commodity channel as much as dampening it" by Malcolm Scott November 20, 2015 http://www.bloomberg.com/news/articles/2015-11-19/a-hard-landing-in-china-could-shake-the-world-
Does China Have a $1.2 Trillion Ponzi Problem? November 20, 2015 - Chinese borrowers are taking on record amounts of debt to repay interest on their existing obligations, raising the risk of defaults and adding pressure on policy makers to keep financing costs low. Bloomberg's Stephen Engle has more on "First Up." (Source: Bloomberg) http://www.bloomberg.com/news/videos/2015-11-20/does-china-have-a-1-2-trillion-ponzi-problem-
10 November 2015: Platts - Comparisons between IEA, EIA, OPEC oil market forecasts, Bloomberg links on Saudi Oil MInister, oil market risks, Baltic Dry Index, bleak outlooks in steel-iron ore, copper; climate agreement issues, Brent Crude 44.10
Comparisons between IEA, EIA, OPEC oil market forecasts, London (Platts)--15Nov2015... "Stockpiles of oil at a record 3 billion barrels are providing world markets with a degree of comfort. This massive cushion has inflated even as the global oil market adjusts to $50/b oil. Demand growth has risen to a five-year high of nearly 2 million b/d, with India galloping to its fastest pace in more than a decade. But gains in demand have been outpaced by vigorous production from OPEC and resilient non-OPEC supply -- with Russian output at a post-Soviet record and likely to remain robust in 2016 as well," the IEA said. "The net result is brimming crude oil stocks that offer an uprecedented buffer against geopolitical shocks or unexpected supply disruptions." But the IEA also noted forecasts of a mild winter in the US and Europe, adding that if these expectations turned out to be the case, "bulging stock evels will add further pressure and oil market bears may choose not to hibernate."
Saudi Oil Minister Says OPEC With Others to Stabilize Market by Wael Mahdi November 19, 2015; ...Brent has lost 23 percent this year. The oil market will start to re-balance next year and prices will improve, Matar al-Neyadi, energy undersecretary for the United Arab Emirates, said at the conference. ... http://www.bloomberg.com/news/articles/2015-11-19/saudi-oil-minister-says-opec-with-others-to-stabilize-market
Biggest Oil Market Risks for 2016 November 19, 2015 Ecstrat strategist Emad Mostaque discusses the biggest oil risks in 2016 with Bloomberg's Joe Weisenthal, Alix Steel and Scarlet Fu on "What'd You Miss?" (Source: Bloomberg) http://www.bloomberg.com/news/videos/2015-11-18/biggest-oil-market-risks-for-2016
Baltic Dry Shipping Index Drops to All-Time Low by Manisha Jha and Naomi Christie November 19, 2015; ...The Baltic Dry Index, a measure of shipping rates for everything from coal to ore to grains, fell to 504 points on Thursday, the lowest data from the London-based Baltic Exchange going back to 1985. Among the causes of shipowners’ pain is slowing economic growth in China, which is translating into weakening demand for imported iron ore that’s used to make the steel.... http://www.bloomberg.com/news/articles/2015-11-19/baltic-dry-ship-index-drops-to-record-as-iron-ore-growth-slump
Iron Ore Bludgeoned to Record Low in Asia on China Steel Concern by Jasmine Ng November 19, 2015 http://www.bloomberg.com/news/articles/2015-11-19/iron-ore-bludgeoned-to-record-low-in-asia-on-china-steel-concern
Steel Industry Peers Into Abyss as Output to Plunge by Bloomberg News November 18, 2015 http://www.bloomberg.com/news/articles/2015-11-18/china-steel-output-to-plunge-23-million-tons-in-2016-cisa-says
`Bleak' Copper Seen Needing 17% Drop to Force Deeper Cuts by Martin Ritchie November 19, 2015 http://www.bloomberg.com/news/articles/2015-11-19/copper-may-drop-to-3-800-in-2016-on-bleak-outlook-fcstone-says
China Wants Legally Binding Climate Agreement From Paris Talks by Bloomberg News November 19, 2015 http://www.bloomberg.com/news/articles/2015-11-19/china-wants-legally-binding-climate-agreement-from-paris-talks
U.K. to Shut Its Dirtiest Coal Power Plants Within a Decade by Lars Paulsson November 18, 2015 The U.K. plans to close all coal plants that haven’t been upgraded with cleaning technology by 2025 as the government signaled an exit from the world’s most widely used power-plant fuel. http://www.bloomberg.com/news/articles/2015-11-18/u-k-to-shut-its-dirtiest-coal-power-plants-within-a-decade
13 November 2015: Reuters - rising inventories, OPEC sees glut shrinking, Bloomberg - U.S. Stocks Fall Amid Rate Concerns as Commodity Shares Tumble, China steel output drop and speeds up fiscal spend, commodities and commodity currency review; Brent Crude 44.06
OPEC sees oil surplus shrinking in 2016, but underlines current glut Nov 12, 2015 - OPEC said its oil output fell in October and forecast supply from rival producers next year would decline for the first time since 2007 as low prices prompt investment cuts, reducing a global supply glut. http://www.reuters.com/article/2015/11/12/us-opec-oil-idUSKCN0T11BQ20151112
U.S. oil prices fall to over two-month lows on rising inventories Nov 12, 2015 - U.S. crude oil dipped further in early trading on Friday to over two-month lows as prices fall over 10 percent since the beginning of November. Read more at http://www.reuters.com/finance/commodities#It8v5DMpfjeAhAR3.99U.S. Stocks Fall Amid Rate Concerns as Commodity Shares Tumble by Kate Garber, November 12, 2015 the stronger dollar and a persistent slump in demand from China sent the Bloomberg Commodity Index to the lowest since 1999. The recent weakness in commodity shares is a turnabout after energy and raw-materials helped drive a rebound from a summer correction and in October had their strongest month in four years http://www.bloomberg.com/news/articles/2015-11-12/s-p-500-futures-are-little-changed-with-central-banks-in-focus
Steel Output Drop in China Is Highly Probable, Noble Group Says by Jasmine Ng November 13, 2015 http://www.bloomberg.com/news/articles/2015-11-12/steel-output-drop-in-china-is-highly-probable-noble-group-says
China Speeds Up Fiscal Spending in October to Support Growth by Bloomberg News November 12, 2015 http://www.bloomberg.com/news/articles/2015-11-12/china-speeds-up-fiscal-spending-in-october-to-support-growth
Commodities: What’s Fallen the Most? http://www.bloomberg.com/news/videos/2015-11-12/commodities-what-s-fallen-the-most-
Why Are Commodity Currencies Taking a Plunge? http://www.bloomberg.com/news/videos/2015-11-12/why-are-commodity-currencies-taking-a-plunge-
Is China's Newest Skyscraper a Sign of Economic Doom? Sep 8 2015... What do New York's Empire State Building, Malaysia's Petronas Towers and Dubai's Burj Khalifa have in common? Each skyscraper opened as its country's once booming economy crashed! It's known as... http://www.bloomberg.com/news/videos/2015-09-09/is-china-s-newest-skyscraper-a-sign-of-economic-doom-
19 October 2015: Iran Urges OPEC to Cut Oil Output to Lift Prices to $70-$80, Brent Crude 49.69l; TPP awaits approval, UK welcomes Xi, China AIIB has UK, Germany, Italy, France, Israel and other allies despite US plea
Saudi's China Oil Play Has No One Over a Barrel: David Fickling by David Fickling October 19, 2015 — 11:57 AM HKT http://www.bloomberg.com/news/articles/2015-10-19/saudi-s-china-oil-play-has-no-one-over-a-barrel-david-fickling
Iran Urges OPEC to Cut Oil Output to Lift Prices to $70-$80 by Anthony Dipaola , Golnar Motevalli Hashem Kalantari October 19, 2015 — 4:31 PM HKT Iran's oil minister says 'no one is happy' with current prices. OPEC members to boost exports in drive to regain market sharehttp://www.bloomberg.com/news/articles/2015-10-19/iran-urges-opec-to-cut-oil-output-to-lift-prices-to-70-80
China Misses Out From TPP Exclusion, PBOC Researcher Ma Says by Bloomberg News October 9, 2015 — 10:59 AM HKT China's economy would be 2.2 percent larger if it joined TPP. PBOC research chief economist Ma Jun comments in article http://www.bloomberg.com/news/articles/2015-10-09/china-misses-out-from-tpp-exclusion-pboc-researcher-ma-says
TPP Awaits Approval; U.S. Moves to Atlantic Trade October 8, 2015 http://www.bloomberg.com/news/videos/2015-10-08/u-s-moves-to-atlantic-trade-as-tpp-awaits-approval
Trans-Pacific Partnership Arrives as World Trade Growth Slows - The TPP lowers or wipes out tariffs on thousands of items. by Simon Kennedy, Isabel Reynolds, Keiko Ujikane October 9, 2015 — 4:14 AM HKT http://www.bloomberg.com/news/articles/2015-10-08/a-mega-trade-deal
U.K. Throws Lavish Welcome for Xi in Hopes of 'Golden Era' in China Trade by David Tweed October 19, 2015 — 6:00 AM HKT http://www.bloomberg.com/news/articles/2015-10-18/u-k-in-economic-kowtow-to-xi-seeks-golden-era-of-china-trade
China’s World Bank - Adding Muscle With Infrastructure Lending By Enda Curran | Updated Sept 24, 2015 3:52 PM EDT Since the end of World War II, the U.S., Western Europe and Japan have controlled much of the business of loaning money to poor countries to help them build public works and strengthen weak economies. These loans, made through the World Bank, International Monetary Fund and Asian Development Bank, often came with demands for strict economic, ethical and environmental behavior. Now there’s a new player: China. It’s creating the Asian Infrastructure Investment Bank — the first major multilateral development bank in a generation — to offer loans for transportation, energy and communications projects. The U.S. tried to talk its allies out of joining the AIIB, questioning its governance and concern for the environment and human rights. The U.K. ignored Washington’s pleas and signed up, followed by Germany, Italy, France, Israel and other allies that decided to join forces with China. The Situation. Since the Asian Infrastructure Investment Bank was announced in October 2013, 57 countries have been accepted by China as founding members. They want to boost links with China and to do deals in its once-protected currency, the yuan. China, the world’s second-largest economy, has long been frustrated that it has only a small say in decisions by global financial institutions. The AIIB doesn’t plan to make loans before the end of this year and hasn’t announced specific projects, though it’s expected to invest in rebuilding the centuries-old Silk Road routes that linked China to Europe with highways, rail lines and port facilities. The Asian Development Bank estimates the region will require $8 trillion in new infrastructure by 2020. http://www.bloombergview.com/quicktake/chinas-world-bank
11 October 2015: Cautious view on recent commodity rebound, large countries outside of TPP trade deal have sufficient scale to offset harm, China consumers care most about food safety and environmental pollution, Brent Crude 52.65
Commodities Rebound but Investors Remain Wary - Moves boost emerging-market nations, as broader picture for developing countries is uncertain By Ira Iosebashvili and Chiara Albanese Updated Oct. 9, 2015 7:06 p.m. ET ; A commodity-sector rebound this week lifted raw-material prices, mining-company shares and the currencies of developing nations, the latest sign of the whipsaw trading that has racked markets this year. Behind the past week’s recovery: tentative signs that China’s economy may be stabilizing after a decline in its growth rate, which could bolster demand for commodities. Many investors also cited a belief that ultralow interest rates will persist longer in the U.S., reducing further dollar appreciation. That in turn eases... http://www.wsj.com/articles/commodity-related-assets-rebound-from-brutal-selloff-1444408081
Citigroup’s Morse Says Commodities Drop Hasn’t Hit Bottom by Cristiane Lucchesi October 10, 2015 http://www.bloomberg.com/news/articles/2015-10-10/citigroup-s-morse-says-commodities-drop-hasn-t-hit-bottom-yet
In Brazil, the Dangerous Game of Bottom Fishing Is Under Way by Denyse Godoy, Paula Sambo and Matthew Malinowski empty text October 10, 2015 http://www.bloomberg.com/news/articles/2015-10-09/in-brazil-trying-to-pinpoint-the-end-for-both-rousseff-and-rout
Goldman Sachs: This Oil Rally Is Not Going to Last - Nothing has really changed. by Luke Kawa October 9, 2015 http://www.bloomberg.com/news/articles/2015-10-09/goldman-sachs-this-oil-rally-is-not-going-to-last
Emerging Currencies Post Biggest Weekly Gain Since 1998 on Fed by Lyubov Pronina and Lilian Karunungan October 9, 2015 Indonesian rupiah, Russian ruble, Malaysian ringgit lead gains. Pimco, ANZ see renewed pressure from yuan devaluation, dollar...http://www.bloomberg.com/news/articles/2015-10-09/emerging-currencies-set-for-best-week-since-2009-on-fed-outlook
Rupiah and Ringgit Have Best Weekly Gains in More Than a Decade by Y-Sing Liau and Yudith Ho October 9, 2015, Fed speculation, rising share and commodity prices drive rally. Rebound isn't supported by fundamentals: Standard Chartered... http://www.bloomberg.com/news/articles/2015-10-09/rupiah-poised-to-halve-yearly-decline-this-week-as-funds-return
China news
China Plans Charging Stations for 5 Million Plug-in Cars by 2020 by Bloomberg News October 9, 2015 — 11:01 AM HKT... http://www.bloomberg.com/news/articles/2015-10-09/china-plans-charging-stations-for-5-million-plug-in-cars-by-2020
China’s Heft Gives It Ammunition Against the Trans-Pacific Partnership Trade Deal - Sheer scale and demand at home to help offset harm from staying outside trade pact By Brian Spegele Oct. 9, 2015 5:10 a.m. ET ; BEIJING—China’s huge domestic market, deep supply chain and push to create more consumers at home gives it heft to dispel challenges of the new Pacific trade pact that it isn’t a party to. On the surface, China appears a clear loser by its exclusion from the Trans-Pacific Partnership, which aims to deepen economic ties and lower or eliminate tariffs in the 12-member bloc led by the U.S. and Japan. But company executives and... http://www.wsj.com/articles/chinas-heft-gives-it-ammunition-against-tpp-1444381816
The Tianjin Explosions: A Signal for Reform - Commentary By Stanley Lubman Sep 7, 2015; As of this date, 161 deaths have been reported and thousands of residents displaced in Tianjin. 23 people have been detained: 11 municipal officials and port executives accused of negligence and abuse of power, and 12 people including top executives of Ruihai. There appears to have been a pattern of wholesale disregard of safety regulations that could have limited the dangers. Moreover, for years before Ruihai began to plan its facilities, local scholars had documented the dangers posed by storage of dangerous materials close to residential neighborhoods. They were unable to generate concern among regulatory officials. Ruihai began storing chemicals without obtaining a license. The company falsely stated that the location of the warehouses complied with national safety regulations, which would have required them to be situated further from residences and a highway. It then stored different volatile materials haphazardly instead of separately, “at safe distances, and in smaller quantities as recommended in the industry.” The Chinese government has previously acknowledged the need for more efficient regulation of hazardous chemicals at local levels — but local governments have been reluctant to comply, with little consequence. The head of the Ministry of Industry and Information Technology acknowledged recently that work on plans to relocate or upgrade almost 1,000 chemical plants was slowed because the Ministry’s work “is not actively supported locally in the past year.” (emphasis added).... According to a March 2015 China Youth Daily poll of Chinese citizens, more than 77 percent ranked food safety as “the most important quality of life issue,” with environmental pollution close behind. Early last month the Supreme People’s Procuratorate announced that it has begun a two-year campaign targeting corrupt officials involved in food-safety crimes. In addition, the influence of major oil and coal companies in weakening the “war on pollution” has been well documented. http://blogs.wsj.com/chinarealtime/2015/09/07/the-tianjin-explosions-a-signal-for-reform/
29 September 2015: Commodities regression back to the 1990s, Saudi royal calls for regime change, Glencore jitters, Congress hearings led banks to scale back before commodities plunge, JBS making killing on sinking BRL, Brent Crude 48.22
U.S. Stock-Index Futures Pare Gains Along With Commodity Prices by Alan Soughley and Camila Russo September 29, 2015 — 3:51 PM HKTUpdated on September 29, 2015 — 9:22 PM HKT
- commodities index back to the 1990s charthttp://www.bloomberg.com/news/articles/2015-09-29/u-s-stock-index-futures-little-changed-after-erasing-decline
The 10-Point. Gerard Baker Editor in Chief The Wall Street Journal; Mine Collapse - Plunging commodity prices, sparked by an economic slowdown in China, are causing havoc for one of the world’s biggest and most famously aggressive mining and trading companies. A recent collapse in the shares of Glencore is casting a long shadow on the unique corporate structure engineered by its chief executive, even though he got a little relief this morning with a small recovery in the stock price. Global stocks were showing signs of steadying earlier today after a sharp selloff in Asia. Meanwhile, the downturn in commodities is causing other casualties. Royal Dutch Shell will become the latest big oil company to abandon the riches under the northern seas in the face of stubbornly low crude prices. The oil giant is quitting its $7 billion Arctic campaign after drilling just one well with disappointing results.
Saudi royal calls for regime change in Riyadh - Plea by grandson of state’s founder comes as falling oil prices, war in Yemen and loss of faith in authority buffet leadership of King Salman by Hugh Miles in Cairo Monday 28 September 2015 16.14 BST ; Plea by grandson of state’s founder comes as falling oil prices, war in Yemen and loss of faith in authority buffet leadership of King Salman http://www.theguardian.com/world/2015/sep/28/saudi-royal-calls-regime-change-letters-leadership-king-salman
One Company Is Making a Killing on Brazil's Sinking Real by Gerson Freitas Jr September 29, 2015 — 10:00 AM HKTUpdated on September 29, 2015 — 5:11 PM HKT; Global beef king now makes more money on derivatives than meat. Strategy costs 4 billion reais a year, twice JBS's 2014 profit; Tucked away in an industrial neighborhood in Sao Paulo, six members of JBS SA’s sprawling meatpacking empire are making a fortune on the collapse in Brazil’s currency. The group may only account for 0.003 percent of JBS’s 215,000-strong workforce, but it’s on track this year to generate more profit than the beef, poultry and pork operations combined.
http://www.bloomberg.com/news/articles/2015-09-29/the-big-bold-currency-trade-making-billions-for-brazil-s-jbs
Glencore Shares Soar After Company Says It's Financially Robust by Jesse Riseborough September 29, 2015 — 3:04 PM HKTUpdated on September 29, 2015 — 9:27 PM HKT http://www.bloomberg.com/news/articles/2015-09-29/glencore-shares-rise-in-london-trading-day-after-record-slump
Take Glencore Private If Market Unfair, Citi Says With `Buy' by Jasmine Ng September 29, 2015 — 1:26 PM HKTUpdated on September 29, 2015 — 5:53 PM HKT http://www.bloomberg.com/news/articles/2015-09-29/take-glencore-private-if-market-unfair-citi-says-with-buy-call
Glencore could be the resource sector's Lehman Brothers By business editor Ian Verrender Updated about 9 hours ago http://www.abc.net.au/news/2015-09-29/glencore-could-be-the-resource-sector-lehman-brothers/6812682?section=business
Glencore shares obliterated after analysts warn they could be worthless - The stock collapsed by 30pc in afternoon trading, wiping more than £2bn off the value of the company http://www.telegraph.co.uk/finance/11895789/Glencore-shares-obliterated-after-analysts-warn-they-could-be-worthless.html
With Glencore, commodity rout beginning to look like a crisis September 29, 2015 - 1:41PM by Bradley Olson http://www.smh.com.au/business/mining-and-resources/with-glencore-commodity-rout-beginning-to-look-like-a-crisis-20150929-gjx6gi.html#ixzz3n8QDtJTI
How Congress Helped Save Goldman Sachs From Itself by Michael J Moore September 29, 2015 — 9:24 AM HKT; Hearings led banks to scale back before commodities plunge. `It's a dangerous business,' Goldman's Viniar said in 2007. In October 2011, things were looking bleak at Goldman Sachs Group Inc.’s commodities business. Revenue was down, competition was up, employee attrition was at an all-time high and new regulations were on the horizon. http://www.bloomberg.com/news/articles/2015-09-29/how-congress-helped-save-goldman-sachs-from-glencore-envy
15 September 2015: WSJ - global trade slump, oil producers financial reckoning, Glencore new low, commodity day traders; Crude Oil (Brent) 46.62
Worries Rise Over Global Trade Slump - Growth in exports and imports is lagging far behind the pace during past expansions, threatening productivity and living standards By William Mauldin Updated Sept. 14, 2015 10:06 p.m. ET A sharp drop in global trade growth this year is underscoring a disturbing legacy of the financial crisis: Exports and imports of goods are lagging far behind their pace of past expansions, threatening future productivity and living standards. For the third year in a row, the rate of growth in global trade is set to trail the already sluggish expansion of the world economy, according to data from the World Trade Organization and... http://www.wsj.com/articles/worries-rise-over-global-trade-slump-1442251590?mod=djem10pointOil Patch Braces for Financial Reckoning - Smaller producers are girding for cuts to credit lines, as crude prices show little sign of rebounding By Daniel Gilbert, Erin Ailworth and Alison Sider Sept. 14, 2015 7:50 p.m. ET http://www.wsj.com/articles/oil-patch-braces-for-financial-reckoning-1442274651?mod=djem10point
Glencore Shares Hit New Low Since Debt-Reduction Plan Announced - Collapse in commodities prices, concerns about debt push stock down By Alex MacDonald and Josie Cox Updated Sept. 15, 2015 9:32 a.m. ET LONDON—Glencore PLC shares hit a new low Tuesday, reversing last week’s gains as coal prices fell and investors became fretful about the company’s debt-rescue plan. Shares in the Swiss commodities trader and producer fell nearly 8% to an intraday low of 118 pence before paring back some of the losses to 123 pence by midafternoon European trade, still down more than 3%. The rest of the U.K. mining sector also fell, with the FTSE 350... http://www.wsj.com/articles/glencore-shares-hit-new-low-after-announcing-debt-rescue-plan-1442320240
Day Traders Struggle Amid Commodities Rout - Volatility both attracts traders and makes it far more difficult to make money By Ese Erheriene Sept. 14, 2015 6:49 a.m. ET; While day trading is largely associated with equity markets, these investors also began moving into commodities after 2006 when some Chicago-based brokerages began offering commodities options to retail traders. There they believe they can profit from the sector’s extreme volatility and predict supply and demand for resources, like oil and gold, that they are familiar with...Oil in particular has attracted such investors....Losses from the financial crisis in 2008 wiped out many day-traders, but academics say their numbers have been building again, particularly in developing countries like Russia and China. Mr. MacDonald-Korth believes that private individuals, including day-traders, account for 80% of trading in China, for instance. The extreme volatility of recent months has encouraged day-traders, academics and traders say. Since March, London-based Amplify Trading has had a five-month waiting list for the program that it runs to train day traders. Last month, the training company arranged an open evening for 20 prospective traders, but 60 people showed up.... http://www.wsj.com/articles/day-traders-struggle-amid-commodities-route-1442227791?&mod=djem10point
13 September 2015: Oil Extends Weekly Drop: How Low Can Prices Go? El-Erian and other views. Dollar enters pivotal week. What should the Fed do next? Crude Oil (Brent) 48.14
Oil Extends Weekly Drop: How Low Can Prices Go? 3:16 AM HKT September 12, 2015 Bloomberg's Alix Steel updates the latest commodities markets news. She reports on "Bloomberg Markets." (Source: Bloomberg) http://www.bloomberg.com/news/videos/2015-09-11/oil-extends-weekly-drop-how-low-can-prices-go-
El-Erian: The Oil Market Is Unhinged September 12, 2015 Bloomberg View Columnist Mohamed El-Erian discusses the price of oil. He speaks on "Bloomberg Markets." His opinions are his own. (Source: Bloomberg) http://www.bloomberg.com/news/videos/2015-09-11/el-erian-oil-market-fundamentally-unhinged
Is Goldman's $20 Oil Forecast Real or Just a Scenario? 2:31 AM HKT September 12, 2015 Societe Generale Head of Commodities Research Michael Haigh discusses the price of oil. He speaks on "Bloomberg Markets." (Source: Bloomberg) http://www.bloomberg.com/news/videos/2015-09-11/is-goldman-s-20-oil-forecast-real-or-just-a-scenario-
One Oil Chart, Two Views September 12, 2015 Bloomberg's Alix Steel and Joe Weisenthal take a look at the outlook for oil prices. They speak on "What'd You Miss?" (Source: Bloomberg) http://www.bloomberg.com/news/videos/2015-09-11/one-oil-chart-two-views
Canadian Stocks Slump as Oil Price Slides on Goldman Outlook by Dani Burger and Eric Lam September 12, 2015 — 1:01 AM HKTUpdated on September 12, 2015 — 4:50 AM HKT Benchmark index ends lower for week, erasing earlier gain. Baytex Energy and Bonavista Energy lead slump in oil companies http://www.bloomberg.com/news/articles/2015-09-11/canadian-stocks-slump-as-oil-price-slides-on-goldman-outlook
Dollar Enters Pivotal Week With Crisis-Period Trades Uwinding by Jennifer Surane September 12, 2015 — 12:01 PM HKT Commodity currencies staged the steepest gains this week Dollar weakens as futures suggest traders betting Fed on hold Currency traders are putting the frenzy of August behind them, signaling that global markets have calmed as Federal Reserve policy makers consider raising interest rates for the first time since 2006. As the final countdown before the Fed’s Sept. 16-17 meeting begins, traders are exiting positions taken on during last month’s market rout. Commodity currencies such as the Australian dollar and South African rand, among the biggest losers in the wake of China’s Aug. 11 yuan devaluation, staged some of the steepest gains this week. The yen, a haven during the August tumult, posted the deepest weekly loss among major currencies....http://www.bloomberg.com/news/articles/2015-09-12/dollar-enters-pivotal-week-with-crisis-period-trades-uwinding
Kenneth Rogoff Slams One of the Most Popular Theories for What the Fed Should Do Next - The Fed should wait for proof on inflation. by Luke Kawa September 12, 2015 — 1:20 AM HKT' Market participants have been coalescing around the view that the Federal Reserve's liftoff from near-zero interest rates will be a "one and done" affair. That is, market metrics suggest that monetary policymakers will likely hike rates once, then wait a considerable time to assess how financial markets and the real economy digest this less stimulative stance. But in an appearance on Bloomberg Surveillance, Kenneth Rogoff, Harvard professor of economics and public policy, questioned the rationale of this view. "What is the logic of doing it, also?" he said in response to a question on the merits of a rate hike followed by a long pause. "It's very asymmetric. If we see inflation, they can start raising rates, and if you go in the wrong direction, it's harder to do something about it." Since the end of the Great Recession, other centra banks, notably Sweden's Riksbank and the European Central Bank, were forced to backtrack on rate hikes. http://www.bloomberg.com/news/articles/2015-09-11/kenneth-rogoff-slams-one-of-the-most-popular-theories-for-what-the-fed-should-do-next
11 September 2015: IEA forecasts oil supply outside OPEC to fall, Goldman says oil could drop toward $20; Crude Oil (Brent) 48.00
Oil Could Drop as Low as $20, Goldman Says by Ben Sharples September 11, 2015 — 1:45 PM HKTUpdated on September 11, 2015 — 4:41 PM HKT http://www.bloomberg.com/news/articles/2015-09-11/-20-oil-possible-for-goldman-as-forecasts-cut-on-growing-glut
Oil Supply Outside OPEC to Fall Most Since 1992, IEA Forecasts by Grant Smith September 11, 2015 — 4:00 PM HKThttp://www.bloomberg.com/news/articles/2015-09-11/oil-supply-outside-opec-to-fall-most-since-1992-iea-forecasts
ft.com > indepth > The New Oil Orderhttp://www.ft.com/intl/indepth/new-oil-order
ft.com > indepth > China tremorshttp://www.ft.com/intl/indepth/china-tremors
22 August 2015: No End in Sight for Oil Glut? Turmoil in Financial Markets Worsens on China Manufacturing Data. Crude Oil (Brent) 45.46
No End in Sight for Oil Glut - Crude-price plunge is deepening, yet producers keep pumping By Russell Gold Aug. 20, 2015 7:35 p.m. ET When oil prices started to edge down a year ago, most energy mavens thought the drop would be small and short-lived. Instead, the price of crude has plunged by almost 60% from its 2014 peak—and suddenly looks likely to stay low for months and maybe years to come. The reason: In the global battle for market share, nobody has backed down. Nobody has even blinked. Not Saudi Arabia, not the U.S., and not even troubled producers from... http://www.wsj.com/articles/no-end-in-sight-for-oil-glut-1440113703?mod=djem10point
U.S. Oil Prices Hit Fresh Six-Year Low, Dipping Below $40 a Barrel; http://www.wsj.com/articles/oil-prices-fall-in-asia-after-weak-chinese-manufacturing-data-1440132261?tesla=y
Turmoil in Financial Markets Worsens on China Manufacturing Data by Stephen Kirkland and Joseph Ciolli August 21, 2015 — 6:54 AM HKTUpdated on August 21, 2015 — 11:18 PM HKT http://www.bloomberg.com/news/articles/2015-08-20/asian-futures-fall-amid-u-s-stock-selloff-as-oil-mired-in-slump
These Charts Show How Hard China Has Hit Global Markets - The damage is everywhere by Trista Kelley and Camila Russo August 22, 2015 — 1:41 AM HKT http://www.bloomberg.com/news/articles/2015-08-21/these-charts-show-how-hard-china-has-hit-global-markets
How Much Longer Can Saudi Arabia's Economy Hold Out Against Cheap Oil? Saudi Arabia got lucky when the oil price fell in 1998. What about now? by Vivian Nereim and Donna Abu-Nasr August 21, 2015 — 12:01 PM HKThttp://www.bloomberg.com/news/articles/2015-08-21/how-much-longer-can-saudi-arabia-s-economy-hold-out-against-cheap-oil-
Dow Plunges 531 Points in Global Selloff;... The Dow industrials lost 530.94 points, or 3.1%, to close at 16459.75, putting it in correction territory, as defined by a 10% decline from a recent high. ... http://www.wsj.com/articles/u-s-stock-futures-point-to-more-losses-1440159610?tesla=y
Dollar Plunges on Global Growth Worries, U.S. Rates Uncertainty; http://www.wsj.com/articles/dollar-plunges-on-concerns-for-global-growth-u-s-interest-rates-1440178286?tesla=y
14 August 2015: Who's going colder on renewable energy
Canada is not the first country where a feed-in tariff (Fit) scheme has been ended. The UK, which has stopped supporting onshore wind and solar energy, in 2011 withdrew tax relief from some Fits, leading a number of the larger ones to close.http://www.theguardian.com/environment/2015/aug/10/canadians-pull-the-plug-on-renewable-energy-scheme
14 August 2015: Yuan slide, oil price fall in peak season for oil, $58 Brent outlook in survey, most pessimistic points to cash cost of production, Crude Oil (Brent) 49.19
Yuan Slide Takes Toll on Chinese Firms - Dollar borrowers suffer $11 billion in currency-exchange loss over three days By Fiona Law Updated Aug. 13, 2015 7:02 p.m. ET The yuan’s surprise fall is likely to saddle some Chinese companies with billions of dollars in foreign-exchange losses, just when borrowers are grappling with towering debt burdens and slowing growth at home.
Ultralow global interest rates and tight lending in domestic markets drove many Chinese firms to look abroad to borrow more cheaply. http://www.wsj.com/articles/yuan-slide-takes-toll-on-chinese-firms-1439489280?mod=djem10point
Crude Prices Seen Staying Below $70 a Barrel Over The Next Year - Survey of 10 banks suggests oil oversupply will continue and weigh on prices By Georgi Kantchev Aug. 13, 2015 6:14 a.m. ET As U.S. crude prices hit a six-year low Thursday, a survey of 10 investment banks by The Wall Street Journal showed increasing pessimism about the outlook for oil. The average forecast of 10 banks surveyed this month was for oil prices to stay below $70 a barrel until late next year. They expect Brent crude, the international price benchmark, to average $58 a barrel this year, down from the forecast of $62 a barrel in May’s survey. http://www.wsj.com/articles/crude-prices-seen-staying-below-70-a-barrel-over-the-next-year-1439460867
$20 Oil? Three Things We Learned This Week - Everyone wanted to read about oil, the yuan and Google. August 15, 2015 — 12:05 AM HKT 1) Oil As crude tumbles in its worst summer ever, experts are lining up to forecast exactly how low it will go. Among the lowest so far is $10 to $20 a barrel, which came from Gary Shilling, president of A. Gary Shilling Co., who spoke in a Bloomberg Television interview on Friday. Because fixed costs are already spent, drillers in a “price war” will keep pumping as long as prices are above the cash costs of production... http://www.bloomberg.com/news/articles/2015-08-14/-20-oil-three-things-we-learned-this-week
Oil's Worst-Ever Summer Signals Price Rout Is Nowhere Near Done by Grant Smith August 14, 2015 — 6:29 PM HKTUpdated on August 14, 2015 — 8:20 PM HKT If crude’s slump back to a six-year low looks bad, it’s even worse when you reflect that summer is supposed to be peak season for oil. U.S. crude futures have lost 30 percent since the start of June...http://www.bloomberg.com/news/articles/2015-08-14/oil-s-worst-ever-summer-signals-price-rout-is-nowhere-near-done
Oman’s Daily Oil Output Tops 1 Million Barrels for First Time by Maher Chmaytelli August 15, 2015 — 6:10 PM HKT http://www.bloomberg.com/news/articles/2015-08-15/oman-s-daily-oil-output-tops-1-million-barrels-for-first-time
U.S. Eases 40-Year Crude Export Ban by Allowing Mexico Swap by Brian Wingfield and Dan Murtaugh August 15, 2015 — 1:00 AM HKTUpdated on August 15, 2015 — 12:01 PM HKT http://www.bloomberg.com/news/articles/2015-08-14/obama-said-to-approve-crude-oil-exports-to-mexico-easing-ban
OPEC Supply Reaches 3-Year High as Iran Pumps Most Since ’12 by Grant Smith August 11, 2015 — 6:30 PM HKTUpdated on August 12, 2015 — 12:12 AM HKT http://www.bloomberg.com/news/articles/2015-08-11/opec-output-reaches-3-year-high-as-iran-pumps-most-since-2012
11 August 2015: China's Devaluation of Yuan Jolts Global Markets - WSJ, Crude Oil (Brent) 48.95 c 11:02AM EDT
China's Devaluation of Yuan Jolts Global Markets - China's devaluation of its currency jolted global markets, hitting stocks and commodities and boosting government bonds. The S&P 500 fell 0.7% in early trade. The pan-European Stoxx Europe 600 index was down 1.5% early afternoon. Most Asian bourses fell and currencies sank. Oil prices fell sharply, while demand for haven assets pushed down bond yields in the U.S. and Europe, as investors worried that Beijing's move signaled growth concerns over the world's second-largest economy. http://www.wsj.com/articles/global-stocks-fall-after-yuan-move-1439278957?mod=djemalertMARKET
Mining Stocks Are Taking a Beating by Javier Blas and Eddie Van Der Walt August 11, 2015 — 10:09 PM HKTUpdated on August 11, 2015 — 10:43 PM HKT http://www.bloomberg.com/news/articles/2015-08-11/glencore-leads-mining-slump-as-metals-tumble-on-yuan-devaluation
10 August 2015: Move to Allow U.S. Oil Exports Accelerates; Crude Oil (Brent) 48.46
Move to Allow U.S. Oil Exports Accelerates - Big voices in the oil industry and Congress now support a move that would have been unthinkable not long ago: opening the U.S. oil industry to exports By Amy Harder Aug. 9, 2015 2:12 p.m. ET; Big voices in the oil industry and Congress now support a move that would have been unthinkable not long ago: opening the U.S. oil industry to exports. The U.S. has long pushed for liberalized trade, with U.S.-produced crude being the biggest exception since the shock of the 1973 Arab oil embargo led Congress to ban oil exports under nearly all circumstances. The only other U.S. products banned under the same regulations are a type...http://www.wsj.com/articles/move-to-allow-u-s-oil-exports-accelerates-1439143950?mod=trending_now_1; WSJ 10 points writes: 27% The share of U.S. petroleum from foreign sources—its lowest level since 1985. Big voices in the oil industry and Congress now support a move that would have been unthinkable not long ago: opening the U.S. oil industry to exports.
Dormant Saudi Bond Market Stirs as Oil Kingdom Seeks $27 Billion by Daria Solovieva and Deema Almashabi August 10, 2015 — 4:01 AM HKTUpdated on August 10, 2015 — 3:00 PM HKT
http://www.bloomberg.com/news/articles/2015-08-09/dormant-saudi-bond-market-stirs-as-oil-kingdom-seeks-27-billion
For Norway, Oil at $50 Is Worse Than the Global Financial Crisis Scandinavia's richest nation is facing a mess by Saleha Mohsin August 10, 2015 — 1:19 PM HKT http://www.bloomberg.com/news/articles/2015-08-10/for-norway-oil-at-50-is-worse-than-the-global-financial-crisis
S&P 500 Flouts History in Break With Bonds That Often Ends Badly by Lu Wang August 10, 2015 — 12:00 PM HKT
http://www.bloomberg.com/news/articles/2015-08-10/s-p-500-flouts-history-in-break-with-bonds-that-often-ends-badly
5 August 2015: The oil price war is set to get vicious - Money Morning, California Has a Plan to End the Auto Industry as We Know It,Obama’s Climate Push Sets Up Battle Reminiscent of Obamacare; Crude Oil (Brent) 50.14
The Economist explains: The global addiction to energy subsidies Jul 26th 2015, 23:50 by E.L
ENERGY prices have been falling for a year. Over the last month that trend has accelerated. On July 24th, the price of a barrel of oil in America reached a low of $48. In spite of this, governments are still splurging on subsidies to prop up production. Fossil fuels are reaping support of $550 billion annually, according the International Energy Agency (IEA), an organisation that represents oil- and gas-consuming countries, more than four times those given for renewable energy. The International Monetary Fund’s estimates are substantially higher. It said in May that countries will spend $5.3 trillion subsiding oil, gas and coal in 2015, versus $2 trillion in 2011. That is equivalent to 6.5% of global GDP, and is more than what governments across the world spend on healthcare. At a time of low energy prices, high government debt and rising concern over emissions there is scant justification for such spending. So why is the world addicted to energy subsidies?
Read more at http://www.economist.com/blogs/economist-explains/2015/07/economist-explains-19#3ovTKPZwWYBcLF0k.99
California Has a Plan to End the Auto Industry as We Know It - Mary Nichols, the California regulator who showed the world how to clean up smog, is pushing for all cars to be electric. by John Lippert August 3, 2015 — 12:01 PM HKT
http://www.bloomberg.com/news/articles/2015-08-03/california-regulator-mary-nichols-may-transform-the-auto-industry?cmpid=BBD080315_BIZ
Obama’s Climate Push Sets Up Battle Reminiscent of Obamacare Aug 4, 2015 2:28 AM WST
President Barack Obama unveiled a landmark set of regulations to combat climate change in a plan that requires states to cut emissions from power plants, setting up a red-state, blue-state battle reminiscent of Obamacare...http://www.bloomberg.com/politics/articles/2015-08-03/obama-sets-up-fight-with-states-with-power-plant-emissions-rule?cmpid=BBD080315_BIZ
Gulf Arab States Voice Support for Iran Nuclear Deal - WSJ http://www.wsj.com/articles/gulf-arab-states-voice-support-for-iran-nuclear-deal-1438618887?mod=djem10point
The oil price war is set to get vicious 14 July, 2015 by Money Morning; Here’s an interesting statistic. Saudi Arabia is pumping more crude oil than ever before. In June, it produced 10.6 million barrels a day. That’s the highest on record, and up 200,000 barrels compared to May. Why is it pumping out oil like there’s no tomorrow?... Saudi Arabia’s record oil output can be explained by one little magic word: competition.Oil cartel Opec got used to the feeling of having the world in the palm of its hands over the past decade or so. Oil prices soared. Everyone said that $100 a barrel was the new norm. It’d never get cheaper than that again. We’d just have to suck it up. The thing is, high oil prices made it worth everyone’s while to start looking for other sources of the stuff. And that’s when ‘fracking’ really took off in the US. At first, everyone dismissed it as overhyped. Then, as the natural gas flowed freely, the argument was that fracking might work for gas, but it wouldn’t change the oil market.Of course, it did. US crude oil output is now up to around 9.7 million barrels a day, according to the US Energy Information Administration. It’s hard to emphasise how astonishing this is. If someone had told you in 2000 that the US was less than two decades away from being as big an oil producer as Saudi Arabia, you’d have laughed them out of town. (It’s events like this that make me take the ‘secular stagnation’ argument with a hefty pinch of salt. Secular stagnation is just the latest ‘new paradigm’ view designed to justify our odd financial environment. It also provides intellectual cover for central banks to go on experimenting with monetary policy.)....
Anyway, getting back to the point in hand. I’ve mentioned this before, but think of this being like supermarket price wars. If you own a big shop, earning decent profit margins from a captive audience, and a smaller rival opens up and starts to undercut you, what do you do? Do you keep your own prices high, and let him continue to steal market share? No chance. You slash prices as low as possible, sit back on your copious cash reserves, and wait for the other guy to go out of business. That’s what Saudi Arabia’s doing. It doesn’t cost much for it to increase production, so it pumps more oil. The oil price crashes, and US oil producers – who require higher prices – either stop drilling or go out of business. There’s also the small matter of Iran re-entering the oil market now that a deal seems to have been agreed to relax sanctions. As David Sheppard puts it in the FT, Saudi Arabia “is unlikely to want to cede market share or see its regional rival enjoy a higher price.”
31 July 2015: How Cheap Oil Is Fueling a Surge In New Factories (chemical plants), Roubini on factors weighing on commodities, China stocks crash - Bloomberg, Shell and Centrica cut jobs, Iran nuclear deal; Crude Oil (Brent) 53.12 c 10:54PM EDT
How Cheap Oil Is Fueling a Surge In New Factories by Vince Golle July 31, 2015 — 2:13 AM HKT; The construction of chemical plants is making up for a slowdown in oil-well drilling
http://www.bloomberg.com/news/articles/2015-07-30/how-cheap-oil-is-fueling-a-surge-in-new-factories
Roubini: Combination of Factors Weighing on Commodities 48:54 - Roubini Global Economics Chairman Nouriel Roubini talks about the factors affecting commodity prices and the reduced pricing power of OPEC. He speaks on "Bloomberg Surveillance." (Source: Bloomberg)
http://www.bloomberg.com/news/videos/2015-07-30/roubini-combination-of-factors-weighing-on-commodities
Shell and Centrica cut 12,000 jobs http://gu.com/p/4b55e?CMP=Share_AndroidApp_Gmail
China’s Stocks Extend Slump in Worst Monthly Decline Since 2009 by Kyoungwha Kim July 31, 2015 — 9:24 AM HKTUpdated on July 31, 2015 — 11:25 AM HKT China’s stocks fell, with the benchmark index heading for its worst monthly drop in almost six years, as the government struggles to rekindle investor interest amid a $3.5 trillion rout. The Shanghai Composite Index slid 0.9 percent to 3,672.45 at 11:24 a.m. local time. The gauge has tumbled 14 percent this month, the biggest loss among 93 global benchmark gauges tracked by Bloomberg, as margin traders cashed out and new equity-account openings tumbled amid concern valuations are unsustainable. http://www.bloomberg.com/news/articles/2015-07-31/china-s-stock-futures-drop-as-shanghai-heads-for-steep-july-loss
As China Stocks Crash, This Top-Ranked Fund Steps In to Buy July 31, 2015 — 9:00 AM HKTUpdated on July 31, 2015 — 10:28 AM HKT http://www.bloomberg.com/news/articles/2015-07-31/when-chinese-stocks-crash-this-top-ranked-fund-steps-in-to-buy
The Iran Nuclear Deal – A Simple Guide By WILLIAM J. BROAD and SERGIO PEÇANHA UPDATED July 14, 2015
Negotiators reached a historic accord on Tuesday to limit Tehran’s nuclear ability in return for lifting international oil and financial sanctions. Here is a guide to the Iran nuclear deal.
http://www.nytimes.com/interactive/2015/03/31/world/middleeast/simple-guide-nuclear-talks-iran-us.html?_r=0
21 July 2015: Bloomberg - Wall Street Lenders Growing Impatient With U.S. Shale Revolution, Gold Leads Commodities ‘Mess’ That Has Many Investors Smarting, Oil Guru Who Called 2014 Slump Sees Return to $100 Crude by 2020; Crude Oil (Brent) 56.51
Wall Street Lenders Growing Impatient With U.S. Shale Revolution by Asjylyn Loder, Bradley Olsonand Dawn Kopecki July 21, 2015 — 7:01 AM HKT Halcon Resources Corp. almost ran into trouble with its banks in June 2013. And again in March 2014. And in February 2015. Each time, the shale driller came close to violating debt limits set by its lenders, endangering a credit line that provided as much as $1.05 billion in much-needed cash. Each time, Halcon’s banks, led by JPMorgan Chase & Co. and Wells Fargo & Co., loosened their restrictions, allowing Halcon to keep borrowing.
That kind of patience may be coming to an end. Bank regulators have issued warnings on the risks involved in lending to U.S. drillers, threatening a cash crunch in an industry that’s more dependent than ever on other people’s money. Wall Street has been one of the biggest allies of the shale revolution, bankrolling thousands of wells from Texas to North Dakota. The question is how that will change with oil prices down by half since last year to about $50 a barrel. "Lenders in general are increasing pressure on oil companies either to raise more equity or do some sort of transaction to pay down their credit lines and free up extra cash,” said Jimmy Vallee, a partner in the energy mergers and acquisitions practice at law firm Paul Hastings LLP in Houston.... http://www.bloomberg.com/news/articles/2015-07-20/wall-street-lenders-growing-impatient-with-u-s-shale-revolution
Gold Leads Commodities ‘Mess’ That Has Many Investors Smarting by Isaac Arnsdorf July 21, 2015 — 7:00 AM HKTUpdated on July 21, 2015 — 10:17 AM HKT Pity the commodity investor. The Bloomberg Commodities Index is holding losses after dropping Monday to a 13-year low, weaker than after the banking meltdown of 2008 and the euro-zone crisis of 2012. From oil to copper to sugar, little has escaped the rout in the year’s worst-performing asset class. “Commodities are a mess,” said Walter “Bucky” Hellwig, who helps manage $17 billion at BB&T Wealth Management in Birmingham, Alabama, in a telephone interview. “We are not looking to add to positions.”
http://www.bloomberg.com/news/articles/2015-07-20/gold-leads-commodities-mess-that-has-many-investors-smarting
Oil Guru Who Called 2014 Slump Sees Return to $100 Crude by 2020 by Javier Blasand Grant Smith July 20, 2015 — 11:20 PM HKT http://www.bloomberg.com/news/articles/2015-07-20/oil-guru-who-called-2014-slump-sees-return-to-100-crude-by-2020
16 July 2015: WSJ - Resurgent Dollar Shakes Off Slump - Janet Yellen’s rate-increase remarks jolt greenback higher, Investors Get Caught in Oil’s Slippery Wake - Value of shares in many energy firms sold this year in follow-on offerings has declined, Crude Oil (Brent) 57.69
Resurgent Dollar Shakes Off Slump - Janet Yellen’s rate-increase remarks jolt greenback higher By Ira Iosebashvili And James Ramage July 15, 2015 6:31 p.m. ET Four months ago, a roaring rally in the dollar sputtered out. Now it is revving back up. The greenback is close to regaining all the ground it has lost since March, when it hit a 12-year high. Driving the broad gains against other currencies is growing confidence that the U.S. economy has picked up enough speed following a first-quarter slump to warrant the first interest-rate increase in nearly a decade. Higher rates tend to make a...
http://www.wsj.com/articles/resurgent-dollar-shakes-off-slump-1436999494?mod=djem10point
Investors Get Caught in Oil’s Slippery Wake - Value of shares in many energy firms sold this year in follow-on offerings has declined By Ryan Dezember And Corrie Driebusch July 15, 2015 7:27 p.m. ET Falling oil prices are hitting investors who bought energy shares this year. The value of shares sold by U.S. and Canadian exploration-and-production companies this year in 47 follow-on offerings sit $1.41 billion shy of the $15.87 billion investors paid for them, according to a Wall Street Journal analysis of Dealogic data. The pullback “has really taken the Street by surprise,” said William Herbert, co-head of securities at... http://www.wsj.com/articles/investors-get-caught-in-oils-slippery-wake-1437002846?mod=djem10point
14 July 2015: Why Saudi Arabia is pumping record crude - Bloomberg video, The Latest Sign That Coal Is Getting Killed - Bloomberg; Crude Oil (Brent), 57.36
Why Saudi Arabia is pumping record crude - Bloomberg video
http://www.bloomberg.com/news/videos/2015-07-13/why-saudi-arabia-is-pumping-record-crude
The Latest Sign That Coal Is Getting Killed, Coal is a sick dragon, and the bond market wields a heavy sword by Tom Randall July 13, 2015 — 8:00 PM HKT; Coal is having a hard time lately. U.S. power plants are switching to natural gas, environmental restrictions are kicking in, and the industry is being derided as the world's No. 1 climate criminal. Prices have crashed, sure, but for a real sense of coal's diminishing prospects, check out what's happening in the bond market.... http://www.bloomberg.com/news/articles/2015-07-13/the-latest-sign-that-coal-is-getting-killed?cmpid=BBD071315_BIZ
9 July 2015: Oil Rout Seen Ending as Demand Trumps China’s Market Crash - Bloomberg, Crude Oil (Brent) 57.85
Oil Rout Seen Ending as Demand Trumps China’s Market Crash by Grant Smith July 8, 2015 — 9:42 PM HKTUpdated on July 9, 2015 — 12:37 PM HKT il’s biggest slump in four years will lose momentum because the plunge in Chinese equities and Greece’s economic crisis won’t dent global demand, according to Morgan Stanley, UBS Group AG and Societe Generale SA. Crude is set for a “modest recovery” after declining 13 percent in the five sessions through Wednesday, Morgan Stanley estimates, while demand will push prices up by year-end, according to hedge fund manager Andrew J. Hall. Any nuclear deal with Iran won’t quickly revive the OPEC member’s crude exports, so wouldn’t immediately weigh on prices, Societe Generale said....
http://www.bloomberg.com/news/articles/2015-07-08/oil-rout-seen-ending-as-demand-trumps-china-s-stock-market-crash
CORRECT: China’s Stocks Cap Biggest Gain Since 2009 July 9, 2015 — 9:29 AM HKT Updated on July 9, 2015 — 3:08 PM HKT; China’s benchmark stock index capped the biggest gain since 2009 in volatile trading as the government battled to restore investor confidence in a market that lost $3.9 trillion in less than a month. http://www.bloomberg.com/news/articles/2015-07-09/shanghai-stocks-set-to-open-lower-as-50-of-market-now-halted
8 July 2015: China stock market rout spreads to other financial markets, Refracking Is the New Fracking - Bloomberg; Crude Oil (Brent) 56.42
Refracking Is the New Fracking by Dan Murtaugh, Lynn Doanand Bradley Olson July 7, 2015 — 7:05 AM HKTUpdated on July 7, 2015 — 9:31 PM HKT; The technique itself is nothing new. Oil crews across the world have been schooled on its simple principles for generations: Identify aging, low-output wells and hit them with a blast of sand and water to bolster the flow of crude. The idea originated somewhere in the plains of the American Midwest, back in the 1950s.... But as today’s engineers start applying the procedure to the horizontal wells that went up during the fracking boom that swept across U.S. shale fields over the past decade, something more powerful, more financially rewarding is happening.The short life span of these wells, long thought to be perhaps the single biggest weakness of the shale industry, is being stretched out. Early evidence of the effects of restimulation suggests that the fields could actually contain enough reserves to last about 50 years, according to a calculation based on Wood Mackenzie Ltd and ITG Investment Research data.... http://www.bloomberg.com/news/articles/2015-07-06/refracking-fever-sweeps-across-shale-industry-after-oil-collapse?cmpid=BBD070715_BIZ
VEGOILS-Palm oil drops for 2nd day on Greek concerns, weak soyoil By Naveen Thukral SINGAPORE, July 7 (Reuters) *Palm oil closes 1.1 pct lower on global concerns *Expectations of lower June output limit losses...The September palm oil contract on the Bursa Malaysia Derivatives exchange dropped 1.1 percent, or 25 ringgit, to 2,210 ringgit ($581.6) a tonne by close.
The C word... “China’s stock market rout is now spreading to other financial markets, creating a sweeping sense of panic and a liquidity crunch,” Zheng Ge, an analyst at Wanda Futures Co., said by phone in Beijing... http://www.bloomberg.com/…/euro-holds-drop-as-greece-deadli…
China Markets Fall Sharply Despite Fresh Help From Beijing - Fears about faltering Chinese demand rattles commodities markets; By Gregor Stuart Hunter Updated July 7, 2015 10:06 p.m. ET, Chinese markets fell sharply early Wednesday, even as Beijing scrambled to arrest a three-week stock selloff.
http://www.wsj.com/articles/asian-markets-lower-amid-twin-fears-of-china-greece-1436318951?mod=djemalertMARKET
China Freezes Trading in 1,300 Companies, Locking Up 40% of Market Cap by Kyoungwha Kimand Fox Hu July 8, 2015 — 9:38 AM HKTUpdated on July 8, 2015 — 11:09 AM HKT http://www.bloomberg.com/news/articles/2015-07-08/china-trade-halts-hit-2-2-trillion-as-state-intervention-fails
1 July 2015: Crude Calculus: More Pain in Store for Investors says Citigroup, Crude Stockpiles Unexpectedly Increase, Petrobras slashes capex in bid to cut debt, restore confidence, Crude Oil (Brent) 62.89
Crude Calculus: More Pain in Store for Investors - Ed Morse, global head of commodities research at Citigroup, doesn’t think oil prices have reached a bottom this year By Nicole Friedman June 30, 2015 11:13 a.m. ET; The oil market came roaring back in the second quarter, as traders rode a crude-price rally from $44 a barrel in mid-March to more than $60.
Oil prices lost half their value in 2014 due to booming production from the U.S. and the Organization of the Petroleum Exporting Countries and an unexpected slowdown in demand. But after prices hit near six-year lows in March, investors bet that rising demand and cutbacks in drilling would eat...
http://www.wsj.com/articles/crude-calculus-more-pain-in-store-for-investors-1435676653?mod=djem10point
Crude Stockpiles Unexpectedly Increase by 2.39M Barrels 10:52 PM HKT July 1, 2015 Crude stockpiles reported an unexpected build during the past week as inventories climbed by 2.39 million barrels according to the Energy Information Administration. Bloomberg’s Julie Hyman reports on “Bloomberg Markets.” (Source: Bloomberg) http://www.bloomberg.com/news/videos/2015-07-01/crude-stockpiles-unexpectedly-increase-by-2-39m-barrels
UPDATE 2-Petrobras slashes capex in bid to cut debt, restore confidence By Jeb Blount (Reuters) - Brazil's state-run oil company Petrobras slashed its long-term spending plan to the lowest level in eight years on Monday as new management moved to reduce the industry's largest debt burden and restore confidence after a devastating corruption scandal. Petroleo Brasileiro SA, as the company is formally known, will invest $130.3 billion in the 2015-2019 period, the company said in a statement. The capital expenditure plan is 41 percent lower than the $221 billion projected in its previous five-year plan, covering the 2014-2018 period. It also trimmed its 2020 forecast for its global production by nearly a third to 3.7 million barrels of oil and equivalent natural gas a day (boepd), from its estimate of 5.3 million boepd a year ago. The investment plan, the company's smallest since 2008, is its first major admission that spending and expansion plans imposed on it by two successive center-left Workers' Party govern ents over the last decade were not realistic, especially in the face of falling world oil prices.... http://www.reuters.com/article/2015/06/29/brazil-petrobras-plan-idUSL2N0ZF0PC20150629
Petrobras To Announce Five Year Budget Cuts This Week 6/28/2015 @ 11:07AM ; After a grueling 9 hour budget meeting, the board of directors of Petrobras have come up with just how much money they’ll be slicing and dicing from the country’s most important corporation. The market will get a sense of the cuts on Monday. Preliminary estimates have put cuts upwards of 40% less than previous planned at the start of the year. Petrobras has been reeling from high debts and a high profile corruption scandal that sent its share price to $5 in March and its credit rating to junk in February. As a result, the company has been shedding non-core assets, including sales of oil fields in Argentina. The company is not expected to sell any of its pre-salt oil fields deep under the ocean floor in Brazil’s Atlantic waters, but overall capital expenditures will be drastically reduced. It is hard for investors to see how this won’t impact Petrobras’ lucrative oil finds. On Friday, in fact, Eduardo Cunha, Brazil’s leading congressman in the lower house of congress, recommended changes to current legislation on the lucrative pre-salt fields that would no longer require drillers to give Petrobras a 30% stake in the well....
http://www.forbes.com/sites/kenrapoza/2015/06/28/petrobras-to-announce-five-year-budget-cuts-this-week/
27 June 2015: Oil Tankers Are Filling Up, Crude Oil (Brent) 63.26
Oil Tankers Are Filling Up and Raking It In - Surging crude-oil output has to go somewhere By Christian Berthelsen June 25, 2015 7:11 p.m. ET The oil-tanker market is heating up, a development some analysts say is a warning flare that signals further price declines for crude. The Baltic Dirty Tanker Index, which tracks the rates to hire oil tankers plying 16 routes, has shot up 25% this month, as global oil output continues to grow. The index is now at its highest level since January 2014.....
http://www.wsj.com/articles/oil-tankers-are-filling-up-and-raking-it-in-1435273625?mod=djem10point
22 June 2015: Speculators Retreat From Oil as OPEC Oversupply Crowds Out Shale and The Shale Industry Could Be Swallowed By Its Own Debt, Goldman Sees Iron Back Below $50 as Balance of Power Shifts - Bloomberg; Crude Oil (Brent) 63.01
Speculators Retreat From Oil as OPEC Oversupply Crowds Out Shale by Moming Zhou June 22, 2015 — 7:01 AM HKTUpdated on June 22, 2015 — 12:05 PM HKT Hedge funds reduced both bullish and bearish bets on oil for a fourth week as rising OPEC output was met with forecasts for a contraction in U.S. supply. Money managers trimmed their short wagers in West Texas Intermediate oil by 4.3 percent and long bets by 0.2 percent, leading to a 0.8 percent gain in the net-long position, U.S. Commodity Futures Trading Commission data for the seven days ended June 16 show. Trading in futures is falling as WTI swings in a $5 range, the narrowest in 19 months. The Organization of Petroleum Exporting Countries pumped the most oil last month since October 2012, while the U.S. government says output will start falling from this month. Investors are watching a June 30 deadline for Iran and six other nations to reach a nuclear deal that could lift oil sanctions and further swell a global supply glut.
http://www.bloomberg.com/news/articles/2015-06-21/speculators-retreat-from-oil-as-opec-oversupply-crowds-out-shale
The Shale Industry Could Be Swallowed By Its Own Debt by Asjylyn Loder June 19, 2015 — 7:00 AM HKTUpdated on June 19, 2015 — 1:23 PM HKT The debt that fueled the U.S. shale boom now threatens to be its undoing. Drillers are devoting more revenue than ever to interest payments. In one example, Continental Resources Inc., the company credited with making North Dakota’s Bakken Shale one of the biggest oil-producing regions in the world, spent almost as much as Exxon Mobil Corp., a company 20 times its size. The burden is becoming heavier after oil prices fell 43 percent in the past year. Interest payments are eating up more than 10 percent of revenue for 27 of the 62 drillers in the Bloomberg Intelligence North America Independent Exploration and Production Index, up from a dozen a year ago. Drillers’ debt ballooned to $235 billion at the end of the first quarter, a 16 percent increase in the past year, even as revenue shrank. “The question is, how long do they have that they can get away with this,” said Thomas Watters, an oil and gas credit analyst at Standard & Poor’s in New York. The companies with the lowest credit ratings “are in survival mode,” he said.
http://www.bloomberg.com/news/articles/2015-06-18/next-threat-to-u-s-shale-rising-interest-payments?cmpid=BBD061915
Goldman Sees Iron Back Below $50 as Balance of Power Shifts by Jasmine Ng June 22, 2015 — 11:54 AM HKTUpdated on June 22, 2015 — 3:42 PM HKT Iron ore is headed back below $50 a metric ton as supplies from Australia and Brazil expand and a slump in steel prices squeezes mills’ profits, according to Goldman Sachs Group Inc., repeating a forecast that recent gains won’t last. Freight data from terminals in the two biggest shippers showed volumes rose 10 percent in the first half of June compared with the average over the first five months, the bank said in a report dated June 21. The rise will be sustained, allowing inventories in China to recover and sending prices lower again, Goldman said, predicting ore will average $49 a ton in the third quarter and $48 in the final three months. Iron ore’s been on a roller-coaster ride, sinking to a decade-low in April as surging low-cost output from miners including Rio Tinto Group boosted a glut. Tumbling stockpiles in the biggest user, after imports missed expectation helped to spur gains in April, May and the first two weeks of June. Goldman and Australia & New Zealand Banking Group Ltd. are among banks predicting higher ore prices won’t last, while Rio says further production is planned even as demand growth weakens.
“Rising supply from Brazil and Australia, which in aggregate account for 80 percent of seaborne exports, together with subdued demand from Chinese steel mills will once again shift the balance of power from producers to consumers,” analysts Christian Lelong and Amber Cai wrote.
http://www.bloomberg.com/news/articles/2015-06-22/goldman-sees-iron-rally-ending-on-supply-tumbling-steel-profits
8 June 2015: Iran to Boost Oil Exports After Sanctions; Crude Oil (Brent) 63.31
Iran to Boost Oil Exports After Sanctions Even If Prices Fall by Claudia Carpenter June 7, 2015 — 7:39 AM BSTUpdated on June 7, 2015 — 9:03 AM BST
Iran will increase crude exports with the end of international sanctions even if oil prices decline, the country’s representative to OPEC said, adding supply after a surplus sent Brent falling almost 50 percent last year
http://www.bloomberg.com/news/articles/2015-06-07/iran-to-boost-oil-exports-after-sanctions-even-if-prices-fall
1 June 2015: Bloomberg - WTI Holds Near $60 as Saudis Pump at Record Before OPEC Meeting and other news links; Crude Oil (Brent) 65.33
WTI Holds Near $60 as Saudis Pump at Record Before OPEC Meeting By'Mark Shenkand Rupert Rowling 7:46 AM HKT June 1, 2015 Oil traded around $60 a barrel in New York as Saudi Arabia maintained crude output at a record in May before OPEC meets this week to discuss its production policy. http://www.bloomberg.com/news/articles/2015-05-31/oil-halts-advance-as-saudis-pump-at-record-before-opec-meeting
Nigerian Oil Hurt by Tussle Between OPEC and U.S. - Once a highly desired, easy-to-refine product, Nigeria’s oil is now hard to sell By Sarah Kent June 1, 2015 2:36 a.m. ET LONDON—In the escalating duel between U.S. and OPEC oil production, few countries’ oil industries have been hit as hard as Nigeria, highlighting a challenge for the petroleum cartel ahead of its meeting Friday. The West African nation has lost business in its main market in the U.S. and struggled to gain footholds elsewhere, raising a question for the Organization of the Petroleum Exporting Countries over whether its decision to fight for market share may have left behind more vulnerable members. http://www.wsj.com/articles/nigerian-oil-hurt-by-tussle-between-opec-and-u-s-1433140569
OPEC likely to keep output unchanged at June 5 meeting: delegates VIENNA | By Rania El Gamal and Alex Lawler Sun May 31, 2015 1:23pm EDT http://www.reuters.com/article/2015/05/31/us-opec-meeting-idUSKBN0OG0T820150531
OPEC’s Pricing Leverage Is Weakening - OPEC expected to leave crude oil output unchanged, showing how cartel’s power to sway prices has ebbed http://www.wsj.com/articles/opecs-pricing-leverage-is-weakening-1433117819
OPEC’s Front Lines in the Shale Fields and Wall Street - U.S. oil output, aided by capital markets, is looking resilient. http://www.wsj.com/articles/opecs-front-lines-in-the-shale-fields-and-wall-street-1433090026
Morgan Stanley Sees ‘Some Risk’ OPEC May Increase Output Target 'By'Ben Sharples 9:08 AM HKT June 1, 2015 http://www.bloomberg.com/news/articles/2015-06-01/morgan-stanley-sees-some-risk-opec-may-increase-output-target
29 May 2015: The Tanker Market Is Sending a Big Warning to Oil Bulls - Bloomberg; Crude Oil (Brent) 63.08
The Tanker Market Is Sending a Big Warning to Oil Bulls 'By'Naomi Christieand Bill Lehane May 28, 2015 Four months into oil’s rebound from a six-year low, the tanker market is sending a clear signal that the rally is under threat. A sudden surge in demand for supertankers drove benchmark charter rates 57 percent higher in the two weeks through May 20. OPEC will have almost half a billion barrels of oil in transit to buyers at the start of June, the most this year, while analysts say about 20 million barrels is being stored on ships in another indication the glut has yet to dissipate.
The Organization of Petroleum Exporting Countries is pumping the most oil in more than two years, determined to defend market share rather than prices. A record cut to the number of active U.S. drilling rigs and billions of dollars of spending reductions by companies since last year’s price plunge has yet to translate into a slump in barrels produced. The world is pumping about 1.9 million barrels a day more crude than it needs, according to Goldman Sachs Group Inc. “Supply of oil continues to build,” said Paddy Rodgers, the chief executive officer of Antwerp, Belgium-based Euronav NV, whose supertanker fleet can haul 56 million barrels of crude. “All of this oil needs to go somewhere,” he wrote in an e-mail May 19..... http://www.bloomberg.com/news/articles/2015-05-27/oil-bulls-beware-soaring-tanker-rates-show-supply-glut-persists-ia7cvht4?cmpid=BBD052815
27 May 2015: Iraq About to Flood Oil Market in New Front of OPEC Price War; Crude Oil (Brent) 63.88
Iraq About to Flood Oil Market in New Front of OPEC Price War - If shipping schedules are correct, a tidal wave of oil is coming....
14 May 2015: Crude has been moving up nicely, but some think it a trading bottom fish while fundamentals not changed much; Crude Oil (Brent) 66.53
Crude Oil (Brent) 66.53 9:22PM EDT
Oil's Not Coming Back. Here's Why 'By'Moming Zhou 7:01 AM HKT May 13, 2015
Global oil demand will grow just 1.3 million barrels a day to 94.58 million next year, the Energy Information Administration said Tuesday. Photographer: David Paul Morris/Bloomberg
Oil bulls who’ve cheered a rebound of 40 percent from a six-year low should take heed: Unless demand accelerates, the rally is in danger. The omens aren’t good. The U.S. government expects global consumption to grow next year at less than half the rate of 2010, when the world was emerging from a previous recession. The growth is insufficient to close the gap with rising supply, according to Royal Dutch Shell Plc, Europe’s biggest energy producer. The last time oil crashed, during the 2008 financial crisis, China’s appetite for commodities seemed insatiable, and powered prices higher. This time, Chinese fuel use is growing at half the rate of the past decade, and sliding U.S. shale output could reverse as prices rise, smothering the gains. “The recent rally appears driven by investors looking at catching the bottom of the market and the expectation that U.S. oil production has reached a turning point,” said Harry Tchilinguirian, BNP Paribas SA’s London-based head of commodity markets strategy. “But fundamentals, notably in the U.S., have not changed much.”... http://www.bloomberg.com/news/articles/2015-05-12/china-is-missing-ingredient-in-oil-s-recovery-from-six-year-low
Looking for 24 Billion Barrels - Shell Wins U.S. Approval to Explore for Oil Off Alaska’s Arctic
Three years after the company halted Arctic operations, the Interior Department endorsed Shell’s exploration plan for the warm-weather drilling season in the Chukchi Sea.
http://link.mail.bloombergbusiness.com/5508cb743b35d034698ebc602lctg.2yiw/VVESrEmOBlN4_YnuB8f91
Saudi Arabia Is Making Its First Real Attempt to Be a Military Power 'By'Glen Carey 4:00 AM HKT May 14, 2015
http://www.bloomberg.com/news/articles/2015-05-13/saudi-hawks-ascendant-as-oil-giant-drifts-away-from-u-s-orbit
Korea’s Fuel-Cell Strategy Takes Page From China Solar Playbook 'By'Christopher Martin 7:00 AM HKT May 14, 2015
http://www.bloomberg.com/news/articles/2015-05-13/korea-s-fuel-cell-strategy-takes-page-from-china-solar-playbook
5 May 2015:To buy or not to buy: M&A in the E&P sector and The significance of the physical and the benefits of oil barrels - Platts blog; Crude Oil (Brent) 68.15
To buy or not to buy: M&A in the E&P sector — Energy Economist By Ross McCracken | May 1, 2015 10:37 AM Comments (0) In this month’s highlight of material from Platts Energy Economist, managing editor Ross McCracken delves into the best places to sink capital in a time of low oil prices and whether recent investments have truly trickled through the industry yet. It is not hard to find proponents of the view that the current clampdown on capital expenditure by oil and gas companies will cause a shortage of oil in the future. Weak investment now causes low production in years to come. At the same time, low prices prompt greater demand. As soon as these two processes become entrenched, oil traders will look ahead to the impending shortage and prices will rise. Boom time returns. In this month’s edition of Energy Economist, Robert Smithson of Taube Hodson Stonex puts forward a very different scenario. Smithson argues that in production terms, the impact of record levels of E&P investment in recent years has still to feed through. Moreover, he says that US tight oil production is much more like traditional ‘long cycle’ conventional oil production than it appears.
http://blogs.platts.com/2015/05/01/ma-ep-sector-oil-prices/
The significance of the physical and the benefits of oil barrels: Petrodollars By Ned Molloy | April 27, 2015 12:01 AM Comments (0); Ned Molloy explains the benefits of having ownership of physical barrels — and how companies that do so are still competing in trading with those armed only with information — in this week’s Oilgram News column, Petrodollars. Owning a flow of oil, either through an equity stake in fields or a long-term off-take agreement, is not limited to majors or independent producers of course. It is one way oil trading houses have tried to deepen their insight into the markets in which they compete....... While buying fixed logistical assets can be a way to access information, it is also partly a response to other market participants having more information. Most trading houses own mid-stream assets like terminals and storage tanks — these have always been crucial in their business of exploiting fleeting, time-sensitive arbitrage opportunities, instead of waiting in a queue to use someone else’s facilities while the opportunity passes........ But some analysts say that increasing levels of transparency in the oil market are actually driving trading firms towards ownership of fixed assets, as information that isn’t in the public domain becomes more valuable....... Physical assets and end-to-end supply chains give traders access to exclusive and non-public information about the market. So as a result of the ever-increasing transparency brought to oil markets by price reporting agencies like Platts, “the informational value of physical-asset ownership is increasing,” according to a McKinsey consultancy paper........ http://blogs.platts.com/2015/04/27/physical-trading-oil-barrels-petrodollars/
29 April 2015: Bloomberg - The Oil Rally Looks Doomed, in Five Charts - The glut remains, and producers are ready to pounce with fresh supplies; Reuters - VEGOILS-Palm slides to 8-month low as ringgit continues to climb; Crude Oil (Brent) 64.50
The Oil Rally Looks Doomed, in Five Charts - The glut remains, and producers are ready to pounce with fresh supplies. 'By'Isaac Arnsdorf 10:07 PM HKT April 28, 2015
Oil has surged 20 percent this month to $57 a barrel as expanding violence in Yemen stoked concern that supplies could be disrupted. The rally follows the biggest drop since 2008, with crude falling as low as $43.46 a barrel in March, as a price war broke out between OPEC producers and U.S. shale drillers. West Texas Intermediate oil, the U.S. benchmark, is now back up at close to a four-month high. Prices gained in each of the last six weeks, the longest stretch in more than a year. Before deciding prices will race back to $100, here are five charts worth keeping in mind. "The cart is moving ahead of the horse," Barclays Plc analysts said in an April 27 report....
http://www.bloomberg.com/news/articles/2015-04-28/the-oil-rally-looks-doomed-in-five-charts?cmpid=BBD042815
VEGOILS-Palm slides to 8-month low as ringgit continues to climb 28-Apr-2015 06:16:40 PM By Anuradha Raghu; Malaysian ringgit rises as high as 3.5440 per U.S. dollar Palm oil to test support at 2,076 ringgit - technicals Climate indicators suggest El Nino is forming - Australian weather bureau
KUALA LUMPUR, April 28 (Reuters) - Malaysian palm oil futures slid to an eight-month low on Tuesday as the ringgit continued to gain traction, stoking worries that overseas buyers may shy away from palm at a time when the tropical plant enters a higher production cycle. The Malaysian currency rose as high as 3.5440 against the U.S. dollar, its strongest since Feb. 9, in its third straight session of gains, making the ringgit-priced palm feedstock more expensive for foreign customers. "Palm is under pressure because of the strong ringgit, and talk of higher production estimates," said a trader with a foreign commodities brokerage in Malaysia....."It (the discount) has to be at a level where it can attract demand. At the moment, it is not enough," the Malaysia-based trader added.
Palm olein POL-MYRBD-M1 is currently around $70 cheaper than Argentine soyoil BO-ARGUPR-P1, from an under $25 discount early April, but narrower than $160 at the start of 2015.....
24 April 2015: Saudi-led airstrikes in Yemen, all sides willing to enter peace talks, opinion - Why the Crisis in Yemen Could Tilt Mideast Power From Saudi Arabia Toward Iran, Turkey and Pakistan; Crude Oil (Brent) 64.66
Oil Set for 6th Weekly Gain as Airstrikes Shift Focus From Glut after 'By'Heesu Lee 7:09 AM HKT April 24, 2015; Oil headed for a sixth weekly advance as renewed speculation that Middle East shipments may be disrupted amid Saudi-led airstrikes in Yemen shifted focus from the expanding U.S. glut.... Futures were little changed in New York and are up 3.2 percent this week. Raids by a coalition of mostly Sunni Muslim nations against Shiite rebels marked an escalation of the civil war in Yemen, a country near major oil fields and adjacent to key shipping routes. While U.S. crude stockpiles are at an 85-year high, data on Wednesday showed the nation’s output slid for a second week amid a drop in drilling activity.... http://www.bloomberg.com/news/articles/2015-04-23/oil-heads-for-six-week-gain-as-airstrikes-shift-focus-from-glut
AP Interview: Yemen Peace Talks Inevitable, Says UN Official By KARIN LAUB Associated Press AMMAN, Jordan — Apr 23, 2015, 3:33 PM ET; A renewal of talks on ending Yemen's conflict is "inevitable" and behind-the-scenes diplomatic efforts could bring results in the coming weeks, including a possible U.N.-hosted conference involving most parties, the head of U.N. operations in Yemen said Thursday.... The Gulf nation of Oman is also involved in mediation, Paolo Lembo, the U.N. resident coordinator in Yemen, told The Associated Press in an interview.... Lembo, speaking at a hotel in Amman, Jordan, said all sides "are aware that there is no other solution" than a political settlement, but that fighting will likely continue for some time.... All sides have declared their willingness to enter talks, but none have taken steps so far to halt the fighting. On Thursday, Shiite rebels pressed ahead with an offensive in the south and a Saudi-led coalition bombarded them from the air, less than two days after it said it was scaling back air strikes.... The battle in Yemen, the Arab world's poorest country, pits the Houthi rebels and their allies— military units loyal to former President Ali Abdullah Saleh — against the Saudi-led coalition and the forces of President Abed Rabbo Mansour Hadi, Yemen's internationally recognized leader.... http://abcnews.go.com/International/wireStory/ap-interview-yemen-peace-talks-inevitable-official-30532719
Graham E. Fuller - Former vice chairman, CIA’s National Intelligence Council: Why the Crisis in Yemen Could Tilt Mideast Power From Saudi Arabia Toward Iran, Turkey and Pakistan Posted: 04/23/2015 4:30 pm EDT Updated: 4 hours ago; Does anybody remember the old Cold War geopolitical concept of the "northern tier states?" They consisted of three countries -- Turkey, Iran and Pakistan (and sometimes Afghanistan) that lay along the southern border of the Soviet Union; they were perceived in the West as a potential bulwark against Soviet aggression southward into the Middle East. Is it possible that today we are witnessing the recrudescence of a "northern tier" bloc? This time, however, the bloc would not be united against Russia at all. On the contrary, these three states demonstrate warming congeniality with many aspects of Russian, Chinese and Eurasian geopolitical views.... The ongoing crisis in Yemen may have become the midwife to such a development. If so, it is Iran that seems to be pulling the pieces together of a new loose power coalition in the Middle East.... Saudi Arabia's much-publicized creation of a Sunni coalition to fight "the Iranian and Shiite threat" in Yemen and the Gulf recently took two major body blows: the unexpected defection of both Turkey and Pakistan as active partners in Saudi Arabia's military campaign in Yemen, after having initially indicated they would join in.... Yes, it's notable that Turkey, Iran and Pakistan are all non-Arab states in the Middle East. But in speaking of a new "northern tier," we're not really talking about an Arab versus non-Arab bloc. The differences are more ideological and geopolitical; they involve differing visions of the future that may reorder the geopolitical map in the Middle East. The "northern tier states" could come to constitute a new informal power bloc that challenges Riyadh's bold, new, reactionary ambitions in the region....
http://www.huffingtonpost.com/graham-e-fuller/yemen-crisis-mideast-power-shift_b_7118850.html
19 April 2015: Fresh forecasts of US close to oil output peak, global markets shudder, Canada outlook on $40 oil, Crude Oil (Brent) 63.45
The 10-Point. Gerard Baker Editor in Chief of The Wall Street Journal
.... Meanwhile, crude-oil production remains strong, but fresh forecasts, including one yesterday from the Organization of the Petroleum Exporting Countries, suggest that the U.S. is at—or very close to—an oil-output peak. The boom will end this year, OPEC said, joining other energy forecasters this week in pointing to an imminent fall in U.S. production. It remains unclear whether America will start pumping a lot less oil or just stop adding thousands of new barrels each month.
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http://tk.wsjemail.com/track?type=click&enid=ZWFzPTEmbXNpZD0xJmF1aWQ9Jm1haWxpbmdpZD01ODMzMDY5Jm1lc3NhZ2VpZD04Njg5MDAmZGF0YWJhc2VpZD02ODIwMDAmc2VyaWFsPTE2OTcyMzc2JmVtYWlsaWQ9eXVsZW5na0BnbWFpbC5jb20mdXNlcmlkPXl1bGVuZ2tAZ21haWwuY29tJnRhcmdldGlkPSZmbD0mZXh0cmE9TXVsdGl2YXJpYXRlSWQ9JiYm&&&114000124556&&&http://www.wsj.com/articles/opec-sees-booming-growth-in-u-s-oil-supplies-to-end-in-2015-1429180187?mod=djem10point
U.S. Stocks Close Sharply Lower as Global Markets Shudder - The Dow Jones Industrial Average fell 279.67 points, or 1.5%, to 17826.10 on Friday as global stocks slumped, driven by a new round of jitters over Greece's finances, a crackdown on stock-market borrowing in China and a flurry of subpar U.S. corporate earnings. The S&P 500 declined 23.83 points, or 1.1%, to 2081.16, and the Nasdaq Composite fell 75.98 points, or 1.5%, to 4931.81. The Stoxx Europe 600 index was 1.8% lower, mirroring declines in other major indexes across the continent. Yields on 10-year German government bonds hit a record low of 0.07%, as investors pulling cash out of stocks sought safety.
http://www.wsj.com/articles/u-s-stock-futures-fall-along-with-european-markets-1429273588?mod=djemalertMARKET
What Canada will look like with $40 oil By Andrew Seale | Insight – Tue, 7 Apr, 2015 1:57 PM EDT.. Reuters/REUTERS - A rusty oil barrel lies in the middle of a road in the largely empty new township built for workers of the Pengerang Integrated Petroleum Complex in Pengerang, in the southeastern tip of Johor, February 4, 2015. A collapse in oil prices …more It’s looking like a dreamy summer for roadtrippers.... According to TD Economics’ latest Commodity Price report, oil could hit US$40 a barrel in the second quarter of 2015. “While crude oil prices appear to have stabilized over the last two months, more weakness is likely in store,” says the report. “The market is amply supplied, and storage in the U.S. is expected to bump up against full capacity within the next few months, which should lead to another leg down in oil prices.” But while the bargain barrel prices won’t hurt the wallet when it comes to filling up the car, long-term effects will be harder to spot says Ambarish Chandra, assistant professor of economics at University of Toronto’s Rotman School of Management.... “Oil is fundamentally volatile, we know that, so I wouldn’t be shocked if it spikes again but if it does stay at this level for awhile, I think of exchange rates first,” says Chandra.
For starters, Canada will be exporting less oil products and what is exported will bring in less revenue, hurting the dollar.... “The loonie would be relatively weak for awhile,” he adds. “For a lot of Canadian households it just means foreign goods become more expensive, travel to the U.S. will be harder and less attractive, the same with foreign travel.”... In theory, local goods may be less expensive but Chandra points out companies are sluggish when it comes to adjusting their prices to match lower transportation costs. “Prices are sticky, they tend not to move,” he says. “They don’t want to change prices and then have to change them back again three months later or six months later knowing the price of oil is volatile.” He points to the airline industry as a prime example. “People keep expecting airlines to lower their prices, because after all they raised them in response to the higher price of oil,” he says. “I wouldn’t be shocked if the drop in oil prices doesn’t effect airline prices at all.”........ https://ca.finance.yahoo.com/blogs/insight/the-effects-of-40-oil-150217828.html
13 April 2015: China growth slows, HK stocks chase, USD strength, BHP and Rio are flooding an oversupplied iron ore market; Germany renewables control center ensures uninterrupted power; Brent 57.96
Crude Oil (Brent) 57.96 12:52AM EDT
China Growth Last Quarter Seen Worst Since Global Recession, http://www.bloomberg.com/news/articles/2015-04-12/china-growth-last-quarter-seen-as-worst-since-global-recession
Major Warning Signs From China's Economy April 10, 2015, http://www.bloomberg.com/news/videos/2015-04-10/how-scary-is-china-s-slowing-economy-
Greed Never Felt So Good to Hong Kong Bulls Chasing Stock Gains, http://www.bloomberg.com/news/articles/2015-04-12/greed-never-felt-so-good-to-hong-kong-bulls-chasing-stock-rally
The $9 Trillion Short That’s Seen Sending the Dollar Even Higher, http://www.bloomberg.com/news/articles/2015-04-12/the-9-trillion-short-that-s-seen-sending-the-dollar-even-higher
BHP, Rio Faulted by Barnett on Iron as Citigroup Sees $30s 'By'Jasmine Ng 7:59 AM HKT April 13, 2015; The biggest iron ore producers including BHP Billiton Ltd. and Rio Tinto Group are pursuing a flawed strategy of flooding an oversupplied market and they should slow down expansions, the premier of Western Australia said. Shares fell.
http://www.bloomberg.com/news/articles/2015-04-12/bhp-rio-have-flawed-iron-strategy-barnett-says-as-price-slumps
Germany Proves Life With Less Fossil Fuel Getting Easier 'By'Stefan Nicolaand Reed Landberg 7:00 AM HKT April 13, 2015; Sitting in a control center that helps ensure uninterrupted power for 82 million Germans, Gunter Scheibner is proving that renewable energy from the sun and wind can be just as reliable as fossil fuels..... Scheibner, in charge of keeping flows stable over 6,200 miles (9,976 kilometers) of transmission lines in eastern Germany, must keep power from solar and wind in harmony whether it’s sunny or overcast, windy or still. In doing so, he’s overcoming the great challenge for renewable energy: how to keep supplies steady when the weather doesn’t cooperate.
The system Scheibner manages has been so successful that Germany experiences just 15 minutes a year of outages, compared with 68 minutes in France and more than four hours in Poland. The model in Germany, the biggest economy in the world to rely so heavily on renewables, is being copied from California to China as wind and solar displace traditional fuels such as nuclear and coal..... http://www.bloomberg.com/news/articles/2015-04-12/germany-proves-life-with-less-fossil-fuel-getting-easier
4 April 2015: Oil falls after tentative nuclear deal for Iran, Crude Oil (Brent) 54.95
Crude Oil (Brent) 54.95
Oil falls nearly 4 percent after tentative nuclear deal for Iran NEW YORK | By Barani Krishnan Thu Apr 2, 2015 8:07pm EDT (Reuters) - Brent oil fell nearly 4 percent on Thursday after a preliminary pact between Iran and global powers on Tehran's nuclear program, even as officials set further talks in June and analysts questioned when the OPEC member will be allowed to export more crude.
Traders had been fixated on the talks held in Lausanne, Switzerland for over a week as Iran tried to agree with six world powers on concessions to its nuclear program to remove U.S.-led sanctions that have halved its oil exports. The sanctions against Iran will come off under a "future comprehensive deal" to be agreed by June 30, after it complies with nuclear-related provisions, Iranian Foreign Minister Javad Zarif told a news conference. "If nothing is going to be signed until June, something could go wrong between now and then," said Phil Flynn, analyst at Price Futures Group in Chicago.
Bob McNally, an adviser to former U.S. president George Bush who heads energy research firm Rapidan Group, noted Iran will need much patience as the "sanctions are not likely to be lifted until late 2015 or early 2016, though we could see slippage beforehand." North Sea Brent crude futures, the more widely-used global benchmark for oil, settled down $2.15, or 3.8 percent, at $54.95 a barrel, almost $1 above the session low. U.S. crude futures settled down 95 cents, or 2 percent, at $49.14 a barrel, after falling nearly $2 earlier. http://www.reuters.com/article/2015/04/03/us-markets-oil-idUSKBN0MT0AD20150403
U.S. oil rig count cull eases, approaches low point NEW YORK | By Edward McAllister Thu Apr 2, 2015 2:23pm EDT (Reuters) - Two weeks of thin declines in the U.S. rig count have raised expectations that drilling activity is nearing a pivotal level that could dent production, bolster prices and coax idle rigs back to the field after a precipitous cull since October. Energy producers responded quickly to a steep drop in oil prices over the last six months, idling nearly 800 rigs, or 50 percent, since a peak of 1,609 rigs in October. In the last week of January, rigs fell by 94, the biggest drop on record, according to a weekly survey by oil service firm Baker Hughes. [RIG/U] U.S. companies remain nervous about oil prices. Spending has been cut as prices fail to rebound significantly, and further price drops could quickly lead to more shrinkage in the rig count. But the decline has slowed, dropping by just 23 rigs in the last two weeks, the smallest weekly cuts since December, according to the latest survey released on Thursday, a sign that the rig count could be approaching its low point. Some reckon that a 50-60 percent drop is as far as it will fall, once energy firms remove their least efficient rigs. "Production companies are in a holding pattern for now," said Eric Lee, analyst at Citi in New York. "It could be the beginning of the flattening of the decline in the rig count."
http://www.reuters.com/article/2015/04/02/us-energy-oil-rigs-idUSKBN0MT10R20150402
2 April 2015: Iron ore slump to extend? Thailand amassing rubber hoard. Brent 55.70
Crude Oil (Brent) 55.70
Iron Ore Seen Extending Slump Below $50 as BHP, Rio Decline 'By'Jasmine Ng 12:30 PM HKT April 2, 2015; Iron ore, which fell below $50 a metric ton on Wednesday, may extend losses as weakening producer currencies cut mining costs, reducing incentives for the supply cuts needed to balance the market, according to Societe Generale SA.... Lower energy prices have lessened freight expenses and the inability of many high-cost Chinese miners to cut output means that iron ore will stay weak, Mark Keenan, Singapore-based head of commodities research for Asia, said on Thursday. The steel-making raw material will probably drop into the low $40s a ton in the coming weeks, IG Markets Ltd. said in an e-mailed note.... http://www.bloomberg.com/news/articles/2015-04-02/iron-ore-seen-extending-slump-below-50-as-miner-currencies-drop
As Rice Mountain Shrinks, Thailand Risks Amassing Rubber Hoard 'By'Supunnabul Suwannakijand Jasmine Ng 9:42 AM HKT April 2, 2015; Eight months after Thailand’s military junta started selling rice into an oversupplied global market, the officers are taking a different tack amid a rubber glut.
But this approach by Thailand, the world’s biggest exporter of both commodities, may cause as many problems in global markets as the old one, analysts say. That’s because while the rubber purchases revived domestic prices that touched a five-year low in October, they’re failing to cut a global production surplus that is entering its fifth year, according to data from the International Rubber Study Group.... Demand is slowing in China, the world’s top buyer and tire exporter, and natural rubber faces stiffer competition from synthetic material made from crude oil, which costs half what it did a year ago. Rubber prices are down more than 70 percent from their 2011 peak as trees planted in Asia over the past decade matured and flooded the market. That hurt farmers and cut costs for users of the raw material, including Goodyear Tire & Rubber Co. and Michelin & Cie.... “Thailand’s approach is just pushing the problem down the road,” Colin Hamilton, head of commodities research at Macquarie in London, said by e-mail on March 20. “The market needs supply to exit, not be encouraged.”... http://www.bloomberg.com/news/articles/2015-04-02/in-rice-for-rubber-shift-thailand-s-junta-is-a-buyer-once-again
30 March 2015: Brent eases back to $56 on renewed glut worries, Iran deal eyed, fracking link to earthquakes?
Crude Oil (Brent) 55.80
Iran Deal Unlikely Before March 31 as Russia Leaves Talks 'By'Jonathan Tirone, Kambiz Forooharand Henry Meyer 4:46 PM HKT March 30, 2015 (Bloomberg) -- Russian Foreign Minister Sergei Lavrov planned to leave nuclear talks with Iran, suggesting any accord may not come until the final hours before a March 31 deadline.... Lavrov and his counterparts from five world powers and Iran met around the same table Monday for the first time in the latest round of talks in Lausanne, Switzerland. He’ll return if there’s a “realistic understanding of a deal,” Russian Foreign Ministry spokeswoman Maria Zakharova said. “The main thing that gives us optimism is the determination of all the ministers to reach a result without taking a pause,” said Lavrov’s deputy, Sergei Rybakov. Negotiations are in “a critical phase,” German Foreign Ministry spokesman Sebastian Fischer said in Berlin.... After a 12-year standoff, envoys remain divided over the pace of easing sanctions on Iran and the limits to be imposed on its nuclear program. A framework accord by March 31 would be a step toward ending Iran’s economic isolation, though another three months are envisaged to reach a detailed final agreement..... If a deal is reached, Iran could add more crude to an oversupplied oil market where prices have fallen more than 50 percent since June. Iran has stored excess crude on tankers for the past 2 1/2 years as restrictions deterred buyers, according to the International Energy Agency. The country now exports about 1 million barrels of crude per day, down from 2.5 million in mid-2012, IEA data show. ... http://www.bloomberg.com/news/articles/2015-03-30/iran-talks-stuck-as-ministers-step-in-before-deadline
Iran Riches Coveted by Big Oil After Decades of Conflict 'By'Javier Blas 7:01 AM HKT March 30, 2015 Bloomberg) -- Outside the boardroom of BP Plc’s headquarters on London’s swanky St. James’s Square, a display case houses the geological data from Masjid-i-Solaiman, Iran’s first oil well. The discovery of crude in 1908 laid the foundations for the company that would become British Petroleum and opened one of the richest opportunities that Western oil companies have ever enjoyed in the turbulent Middle East. Since then, the industry’s history in Iran is intertwined with CIA-backed coups, colonial exploitation and the anti-Western resentment surrounding the 1979 Islamic Revolution.... Foreign oil companies and Tehran would need to straighten out that turbulent past that stretches all the way to the Masjid-i-Solaiman oil well. The perception among the foreign oil companies is that the history would be put aside. Sultan, the former head of Kuwait Petroleum, said Iranian leaders would play along too. “There is a new momentum in Iran, and that momentum also includes a desire to show success in the oil front,” he said.... http://www.bloomberg.com/news/articles/2015-03-29/iran-reserves-again-coveted-by-big-oil-after-decades-of-conflict
Oil Speculators Focused on Glut Miss Surge as Bombs Hit Yemen By 'Moming Zhou 7:01 AM HKT March 30, 2015 (Bloomberg) -- Speculators were the least bullish on crude in two years before prices surged as Saudi Arabia and its allies bombed rebels in Yemen, threatening supply disruptions in the largest oil-producing region. Hedge funds and other money managers cut their net-long position in West Texas Intermediate crude by 3.8 percent in the seven days ended March 24, U.S. Commodity Futures Trading Commission data show. Futures jumped more than 8 percent in the next two days before dropping 5 percent on Friday as shipping groups said there were no disruptions for now.
Refineries are set to boost rates further as seasonal maintenance ends. Plants have increased crude demand by an average 601,000 barrels a day in April and May over the past five years.... “The dollar and the rising refinery runs supported the market,” Phil Flynn, senior market analyst at the Price Futures Group in Chicago, said by phone March 27. “It doesn’t look like the market fundamentals have changed.”
Big Oil Pressured Scientists Over Fracking Wastewater's Link to Quakes - Energy firms tried to slow science inquiries blaming them for earthquakes in Oklahoma 'By'Benjamin Elginand Matthew Philips 7:00 PM HKT March 30, 2015; In November 2013, Austin Holland, Oklahoma’s state seismologist, got a request that made him nervous. It was from David Boren, president of the University of Oklahoma, which houses the Oklahoma Geological Survey where Holland works. Boren, a former U.S. senator, asked Holland to his office for coffee with Harold Hamm, the billionaire founder of Continental Resources, one of Oklahoma’s largest oil and gas operators. Boren sits on the board of Continental, and Hamm is a big donor to the university, giving $20 million in 2011 for a new diabetes center. Says Holland: “It was just a little bit intimidating.”....... Today, as the number of earthquakes continues to soar, Holland has evolved in his position. He recently told Bloomberg that the vast majority of the increase in earthquakes is due to the injection of oil and gas wastewater. Yet he bristles at any suggestion that industry pressure slowed him from reaching that conclusion. Oklahoma has naturally occurring earthquakes, he says, and there have been large spikes of natural earthquakes in the past where no oil and gas development was occurring. It was proper, Holland says, to start with the hypothesis that the quakes were not man-made. “Science doesn’t operate in beliefs,” he says. “It operates in demonstrable facts.” http://www.bloomberg.com/news/articles/2015-03-30/big-oil-pressured-scientists-over-fracking-wastewater-s-link-to-quakes
26 March 2015: Spike up on Yemen attacks. Short squeeze to nearly $60?
Moneyweek writes in its daily newsletter with note on talk of a short squeeze: Oil prices spiked higher yesterday, as Saudi Arabia launched air strikes on Yemen. The price of Brent went up to nearly $60 a barrel, while WTI (the US benchmark) rose to around $52.... As ever in the Middle East, the details are complicated (we’ll look into it in more detail in the next issue of MoneyWeek magazine). But keeping things simple, the Saudis and other Gulf Arab states are fighting Iran-backed rebels in Yemen, in an attempt to defend the Yemeni government. ... As the FT describes it, it’s basically a Sunni-Shia cold war, with Shia Iran on one side, and the largely Sunni Arab nations on the other.... Now, Yemen doesn’t matter much to the oil price. As various pundits on CNBC point out, Yemen isn’t a big oil supplier, and the trouble isn’t directly disrupting trade routes – yet. “This could help move oil prices partly, but we don’t see that this will disrupt actual oil supply,” said one South Korean oil expert......
17 March 2015: Strong dollar, US oil price dropping, Iran deal could open oil flood, OPEC's days could be numbered, Big Oil profits from the slump, rigs running hot offshore, Brent 53.44
Unprecedented Sugar Glut Expanding as World Output Soars by Marvin Perez, Luzi Ann Javierand Gerson Freitas Jr 7:00 AM HKT March 17, 2015 (Bloomberg) -- The world has never been so awash in sugar. Just as cane harvests expand in India and Thailand, farmers in Brazil, the world’s largest producer, are ramping up exports to take advantage of a tumble in the exchange rate that has swelled their profit margins. And crops that were hurt by drought last year have been revived by rain. Global output is set to exceed demand for a fifth straight year, leaving the biggest stockpiles on record, the International Sugar Organization said. All of that sugar signals global prices, already down 50 percent in three years, are poised to fall further, cutting costs for buyers like Krispy Kreme Donuts Inc. and Mondelez International Inc., the maker of Cadbury chocolates and Oreos. New York sugar futures probably will slide 5.4 percent by July to 12.02 cents a pound, the lowest since January 2009, a Bloomberg survey of nine analysts showed. http://www.bloomberg.com/news/articles/2015-03-16/unprecedented-sugar-glut-expanding-as-world-output-soars
Saudi Arabia Wooing Fired U.S. Shale Workers to ‘Join Our Team’ by Kelly Gilblom 8:00 AM HKT March 17, 2015 (Bloomberg) -- Workers fired from U.S. shale fields after the collapse in oil prices could soon have a new boss: the nation some blame for driving that decline.... The state-owned Saudi Arabian Oil Co., also known as Saudi Aramco, is posting new job ads online aiming to snap up experts in extracting oil from shale as the country seeks to become a leader in that rapidly expanding effort. Tens of thousands of U.S. workers have been fired since November as oil prices plunged because of oversupplies, driven in part by an OPEC decision supported by Saudi Arabia.... Previously, Saudi Aramco didn’t need expertise in shale oil and natural gas exploration because it has large conventional oil reserves that don’t require expensive extra steps to develop, such as the hydraulic fracturing or horizontal drilling used in shale rock. As those highly productive fields age, however, development of shale resources, along with other hard-to-reach oil categorized as “unconventional,” may help Saudi Aramco maintain its dominance in the oil market, according to John Kingston, president of the McGraw Hill Financial Institute.
http://www.bloomberg.com/news/articles/2015-03-17/saudi-arabia-wooing-fired-u-s-shale-workers-to-join-our-team-
Bloomberg - Can Asia Survive a Strong Dollar? http://bv.ms/1LhWf3a
Bloomberg - Oil Is Getting Slammed Again, and Falling to Its Lowest Level in Years http://www.bloomberg.com/news/articles/2015-03-16/oil-is-getting-slammed-again-and-falling-to-its-lowest-level-in-years
Bloomberg - Oil Prices May Have Further to Fall http://www.bloomberg.com/news/articles/2015-03-16/fed-data-suggest-oil-prices-may-have-further-to-fall
Iran’s Nuclear Deal Could Open Oil Flood - WSJ http://www.wsj.com/articles/irans-nuclear-deal-could-open-oil-flood-1426524085?mobile=y
Bloomberg - Iran Can Add Million Barrels a Day of Oil Without Sanctions http://www.bloomberg.com/news/articles/2015-03-16/iran-can-add-million-barrels-a-day-of-oil-if-sanctions-are-ended
Bloomberg - History Suggests OPEC's Days Could Be Numbered http://www.bloomberg.com/news/articles/2015-03-10/opec-beware-cartels-tend-to-end-in-tears
Bloomberg - How Big Oil Is Profiting From the Slump http://www.bloomberg.com/news/articles/2015-03-12/oil-giants-in-europe-use-trading-prowess-to-profit-from-slump
Bloomberg - Rigs Running Hot Offshore as Shale Scales Back http://www.bloomberg.com/news/articles/2015-02-19/rigs-running-hot-offshore-as-shale-scales-back
15 March 2015: Matt Ridley argues that the future is in fossil fuel efficiencies, says environmental movement helped crony capitalists advantage from subsidies in renewables schemes; US deployment of drilling rigs since 2011; GE's energy division troubles, WSJ - effects of a weak euro are reverberating through economies around the world
In conversation with specialists: The structure of some biofuels sectors - often with quite concentrated ownership of biofuel processing facilities in a few hands - is noted by various observers. NGO influenced green standards can also help to attract new margins or earnings for entrepreneurial processors adept at navigating regulatory settings.
The Saturday Essay: Fossil Fuels Will Save the World (Really) - There are problems with oil, gas and coal, but their benefits for people—and the planet—are beyond dispute By Matt Ridley March 13, 2015 5:33 p.m. ET; That fossil fuels are finite is a red herring. The Atlantic Ocean is finite, but that does not mean that you risk bumping into France if you row out of a harbor in Maine. The buffalo of the American West were infinite, in the sense that they could breed, yet they came close to extinction. It is an ironic truth that no nonrenewable resource has ever run dry, while renewable resources—whales, cod, forests, passenger pigeons—have frequently done so..... Nuclear’s problem is cost. In meeting the safety concerns of environmentalists, politicians and regulators added requirements for extra concrete, steel and pipework, and even more for extra lawyers, paperwork and time. The effect was to make nuclear plants into huge and lengthy boondoggles with no competition or experimentation to drive down costs. Nuclear is now able to compete with fossil fuels only when it is subsidized.... As for renewable energy, hydroelectric is the biggest and cheapest supplier, but it has the least capacity for expansion. Technologies that tap the energy of waves and tides remain unaffordable and impractical, and most experts think that this won’t change in a hurry. Geothermal is a minor player for now. And bioenergy—that is, wood, ethanol made from corn or sugar cane, or diesel made from palm oil—is proving an ecological disaster: It encourages deforestation and food-price hikes that cause devastation among the world’s poor, and per unit of energy produced, it creates even more carbon dioxide than coal.... Although the world has certainly warmed since the 19th century, the rate of warming has been slow and erratic. There has been no increase in the frequency or severity of storms or droughts, no acceleration of sea-level rise. Arctic sea ice has decreased, but Antarctic sea ice has increased. At the same time, scientists are agreed that the extra carbon dioxide in the air has contributed to an improvement in crop yields and a roughly 14% increase in the amount of all types of green vegetation on the planet since 1980.... That carbon-dioxide emissions should cause warming is not a new idea. In 1938, the British scientist Guy Callender thought that he could already detect warming as a result of carbon-dioxide emissions. He reckoned, however, that this was “likely to prove beneficial to mankind” by shifting northward the climate where cultivation was possible.... Patrick Michaels of the libertarian Cato Institute has written, since 2000, 14 peer-reviewed papers, published by 42 authors, many of whom are key contributors to the reports of the IPCC, have concluded that climate sensitivity is low because net feedbacks are modest. They arrive at this conclusion based on observed temperature changes, ocean-heat uptake and the balance between warming and cooling emissions (mainly sulfate aerosols). On average, they find sensitivity to be 40% lower than the models on which the IPCC relies.... If these conclusions are right, they would explain the failure of the Earth’s surface to warm nearly as fast as predicted over the past 35 years, a time when—despite carbon-dioxide levels rising faster than expected—the warming rate has never reached even two-tenths of a degree per decade and has slowed down to virtually nothing in the past 15 to 20 years. This is one reason the latest IPCC report did not give a “best estimate” of sensitivity and why it lowered its estimate of near-term warming.... We should encourage the switch from coal to gas in the generation of electricity, provide incentives for energy efficiency, get nuclear power back on track and keep developing solar power and electricity storage. We should also invest in research on ways to absorb carbon dioxide from the air, by fertilizing the ocean or fixing it through carbon capture and storage. Those measures all make sense. And there is every reason to promote open-ended research to find some unexpected new energy technology.... The one thing that will not work is the one thing that the environmental movement insists upon: subsidizing wealthy crony capitalists to build low-density, low-output, capital-intensive, land-hungry renewable energy schemes, while telling the poor to give up the dream of getting richer through fossil fuels.... Mr. Ridley is the author of “The Rational Optimist: How Prosperity Evolves” and a member of the British House of Lords. http://www.wsj.com/articles/fossil-fuels-will-save-the-world-really-1426282420?mod=trending_now_3
Watch Four Years of Oil Drilling Collapse in Seconds By Tom Randall Julian Burgess and Blacki Migliozzi | March 13, 2014; The crash in oil prices kicked off intense debate over when, and how, American producers would react. So far they’re still cranking out oil, but there are signs that a slowdown is looming. Chief among them: the record drop-off in drilling for new oil. The animation below shows the deployment of drilling rigs since 2011, culminating recently in a sudden collapse.
http://www.bloomberg.com/graphics/2015-oil-rigs/?cmpid=BBD031315&alcmpid=
A Crude Awakening for General Electric - Its energy division will cut jobs and buy companies by Richard Clough 2:25 AM HKT March 13, 2015; Not long ago, oil looked like a black gold mine for General Electric. The company known for toaster ovens and lightbulbs wrapped up a three-year, $10 billion buying spree in 2013 to bolster the growing oil and gas equipment unit that helped GE recover from the financial crisis. The company bulked up with the expectation that crude prices would remain at about $100 a barrel for years.... These days, with the price of oil 40 percent lower than six months ago, energy companies are buying less drilling and processing equipment. The industry plans to slash spending by $40 billion and cut 100,000 jobs globally. GE’s oil unit is cutting costs and laying off employees, too. In December the company warned investors that the oil and gas division in 2015 could face its first sales decline—of as much as 5 percent—in five years. “I am not being Pollyannaish in any way,” says Jeff Bornstein, GE’s chief financial officer. “It’s going to be a very tough orders year, and we’re going to see an impact.”... http://www.bloomberg.com/news/articles/2015-03-12/general-electric-bets-big-on-oil-and-gas-division?cmpid=BBD031315&alcmpid=
The 10-Point. Gerard Baker, Editor in Chief of The Wall Street Journal, 13 March 2015. Two Sides of the Coin - The effects of a weak euro are reverberating through economies around the world. Our story looks at how the tumbling euro is boosting optimism in corporate Europe while, at the same time, causing a headache for U.S. competitors. It remains unclear whether the weak euro, monetary stimulus and cheap energy prices will be enough to lift the eurozone out of its prolonged growth malaise. Past episodes of sharp devaluations in developed economies show the impact often boosts growth, but positive results aren’t guaranteed—a lesson relevant for Europe today. Meanwhile, the surging dollar and a global slowdown are likely to restrain the U.S. economy through at least the first half of the year, according to the Journal’s March survey of economic forecasters.
14 March 2015: Brent slides to $54.67, Alan Greenspan: Oil Price Hasn’t Hit Bottom Yet
Crude Oil (Brent) -2.41 54.67 -4.22% Closed: 6:00PM EDT; Reuters reports worries about US oil storage running out of space.
Alan Greenspan: Oil Price Hasn’t Hit Bottom Yet 9:13 PM HKT March 13, 2015
Former Federal Reserve Chairman Alan Greenspan talks about the outlook for oil markets, the U.S. economy and the dollar. Greenspan speaks with Betty Liu on Bloomberg Television's "In the Loop." (Source: Bloomberg) http://www.bloomberg.com/news/videos/2015-03-13/alan-greenspan-oil-price-hasn-t-hit-bottom-yett
12 March 2015: Reuters reports on Ringgit at 6-year low, Brent rebounds and widens gap on US crude down on new record US oil inventories, Euro slumps to 12-year low - Brent 57.82
VEGOILS-Market factors to watch March 12 - RTRS 12-Mar-2015 08:23
FUNDAMENTALS
* Malaysian palm oil futures snapped a five-day losing streak on Wednesday as the ringgit slid to its weakest in six years, although gains were capped by palm's narrowing discount to rival soyoil.
* U.S. wheat futures rose 1.2 percent to a one-week high on Wednesday, extending four-day gains to nearly 4 percent on short-covering and concerns about dry weather in U.S. growing regions.
* Benchmark Brent oil jumped 2 percent on Wednesday, rebounding from a one-month low and widening its gap to U.S. crude, which closed slightly down after a new record high for oil inventories in the United States.
MARKET NEWS
* The euro slumped to a 12-year low against the dollar on Wednesday, driving European stocks higher as shares of big exporters gained, while U.S. stocks slipped on concern over when the Federal Reserve would begin to raise U.S. interest rates.
5 March 2015: Oil price will blow a hole in corporate accounting - Bloomberg; Brent 60.55 6:00PM EST
The Price of Oil Is About to Blow a Hole in Corporate Accounting 'By'Asjylyn Loder 8:00 AM AWST March 4, 2015; (Bloomberg) -- There’s one place in the world where oil is still $95 a barrel. On paper. The U.S. Securities and Exchange Commission requires drillers to calculate the value of their oil reserves every year using average prices from the first trading days in each of the previous 12 months. Because oil didn’t start its freefall to about $45 till after the OPEC meeting in late November, companies in their latest regulatory filings used $95 a barrel to figure out how much oil they could profitably produce and what it’s worth. Of the 12 days that went into the fourth-quarter average, crude was above $90 a barrel on 10 of them.... So Continental Resources Inc., led by billionaire Harold Hamm, reported last month that the present value of its oil and gas operations increased 13 percent last year to $22.8 billion. For Devon Energy Corp., a pioneer of hydraulic fracturing, it jumped 31 percent to $27.9 billion.... This year tells a different story. The average price on the first trading days of January, February and March was $51.28 a barrel. That means a lot of pain -- and writedowns -- are in store when drillers’ first-quarter numbers are announced in April and May.... http://www.bloomberg.com/news/articles/2015-03-04/oil-at-95-a-barrel-discovered-in-sec-rules-on-reserves?cmpid=BBD030415&alcmpid=
27 February 2015: Saudi oil price war paying off says BofA, Noble shares plunge after loss as accounting criticized
Crude Oil (Brent) 61.31
Saudis’ Oil Price War Is Paying Off by Grant Smithand Anthony Dipaola 8:01 AM AWST February 27, 2015 (Bloomberg) -- Three months after Saudi Arabia made clear it was going to let oil prices keep tumbling, the strategy is showing signs of working. U.S. drillers are idling rigs at a record pace, gutting investment plans and laying off thousands of workers. Those steps highlight how the Saudi-led OPEC decision on Nov. 27 to maintain output levels and protect its market share is having the desired effect -- pushing prices down so far that they threaten to curb output in the U.S. and other non-OPEC countries. Saudi Arabia, the most powerful member of the Organization of Petroleum Exporting Countries, will maintain that tack when the group next meets in June, according to some of the world’s biggest banks. The strategy “is working,” Francisco Blanch, head of commodities research at Bank of America Corp. in New York said by phone. “It is having the effect that we would expect, which is a decline in investment and ultimately supply, and somewhat higher demand. We think this change is for good.” http://www.bloomberg.com/news/articles/2015-02-27/saudis-bold-gambit-paying-off-just-three-months-later-energy
Noble Shares Plunge After Loss as Accounting Is Criticized by Yuriy Humberand Jonathan Burgos 5:52 PM AWST February 26, 2015; (Bloomberg) -- Noble Group Ltd. shares fell to the lowest in almost two weeks after reporting a first quarterly loss in more than three years, following allegations of accounting malpractice that the company believes to be the work of a disgruntled ex-employee.
Noble took a $438 million writedown, including charges on assets scrutinized by the anonymous Iceberg Research as part of its allegations. Noble’s shares fell 5.2 percent to S$1.005 as of 11:02 a.m. in Singapore, after a suspension yesterday.... Asia’s largest commodity and energy trader by revenue swung to a $240 million fourth-quarter loss following tumbling commodity prices that hit revenues at its mining and mineral operations and required more capital for provisions, according to a statement yesterday.... The results come on the heels of Iceberg’s two reports critical of the Hong Kong-based company’s accounting practices. The initial report last week included allegations that Noble was overstating the value of associate companies including Yancoal Australia Ltd., sparking a decline of as much as 15 percent in the stock over two days.... http://www.bloomberg.com/news/articles/2015-02-26/noble-posts-240-million-loss-as-its-accounting-comes-under-fire
24 February 2015: Bloomberg on oil prices yet to hit bottom on OPEC meeting and "dead cat bounce"; US banks hoard cash instead of lending, banks face scrutiny on rigging precious-metals markets; Crude Oil (Brent) 59.10
Why Oil Prices Have Not Yet Hit Bottom 6:10 AM AWST February 24, 2015
Feb. 23 -- Crude fell, extending last week’s decline on speculation excess global supply will accumulate after U.S. drillers idled fewer oil rigs and Libya restarted a pipeline. Bloomberg's Isaac Arnsdorf reports on "Street Smart."
http://www.bloomberg.com/news/videos/2015-02-23/why-oil-prices-have-not-yet-hit-bottom
U.S. Banks Hoard $2 Trillion of Ultra-Safe Bonds 'By'Liz McCormickand Daniel Kruger 8:00 AM AWST February 23, 2015 (Bloomberg) -- What do America’s banks know about the state of the U.S. economy that has them hoarding ultra-safe bonds? Growth is on a tear, hiring is the strongest in decades and households are the most upbeat since 2011. Yet banks such as Bank of America Corp. keep plowing their burgeoning deposits into U.S. government and related debt -- pushing the industry’s holdings past $2 trillion -- instead of lending it all out.... http://www.bloomberg.com/news/articles/2015-02-23/bofa-leads-charge-into-bonds-as-banks-build-2-trillion-hoard
WSJ MARKETS ALERT: Big Banks Face Scrutiny Over Pricing of Metals - U.S. officials are investigating at least 10 major banks for possible rigging of precious-metals markets, even though European regulators dropped a similar probe after finding no evidence of wrongdoing, according to people close to the inquiries. Prosecutors in the Justice Department's antitrust division are scrutinizing the price-setting process for gold, silver, platinum and palladium in London, while the Commodity Futures Trading Commission has opened a civil investigation, these people said.
21 February 2015: Cheaper oil helps more spending Lunar New Year treats; Buffet dumping Exxon for Suncor, Phi9llips 66 and others; inventories are up and US running out of storage space while US oil rigs fall again; Why oil may fall more; Crude Oil (Brent) 60.22
Another Happy Consequence of Cheap Oil - Falling oil is leaving more money for Lunar New Year treats by 'By'Rina Chandranand Ailing Tan 10:05 AM AWST February 18, 2015 Each year, Singapore's inflation has usually ticked up in the weeks before Chinese New Year, partly because of the higher prices of the beloved bak kwa, or barbecued pork, that is gifted and consumed in enormous quantities during the festival. While the delicacy is available all year round, long lines can be seen outside the most popular shops in the weeks before the holiday, which even impose limits on individual purchases. An exception to the inflation-bak kwa relation was 2014, when lower COE or vehicle-permit prices caused inflation to slow. This year, it's oil. The Bloomberg bak kwa index -- which tracks prices of the traditional barbecued pork at four of Singapore's most popular vendors -- shows prices are at a record high this year. Inflation though, is at a five-year low, as cheaper oil more than offsets pricier bak kwa. So there are even longer lines at the shops.
http://www.bloomberg.com/news/articles/2015-02-18/cheaper-oil-takes-edge-off-chinese-new-year-treats-in-singapore
U.S. Stocks Rise to Records in Week on Greek Deal, Fed Rate Bets 'By'Callie Bost 6:15 AM AWST February 21, 2015 http://www.bloomberg.com/news/articles/2015-02-20/u-s-stocks-rise-to-records-in-week-on-greek-deal-fed-rate-bets
Buffett Dumping Exxon Points Investors to Review Oil Bets 'By'Joe Carroll 1:40 AM AWST February 19, 2015 (Bloomberg) -- Warren Buffett’s decision to dump his stake in Exxon Mobil Corp. after oil prices plunged is pointing investors toward smaller, more nimble producers that will deliver higher returns during a market recovery. Buffett’s Berkshire Hathaway Inc. sold its entire position in Exxon during the final three months of last year, according to a regulatory filing on Tuesday. The exit marks the end of a $3.7 billion investment in 2013 that at the time was Buffett’s biggest single bet since he bought into International Business Machines Corp. two years earlier. Berkshire is focusing energy investments on more promising names, said Allen Good, an analyst at Morningstar Inc. in Chicago. The Omaha, Nebraska-based company added to its holdings in Canadian oil-sands miner Suncor Energy Inc. and crude refiner Phillips 66, according to the filing that detailed Buffett’s portfolio as of Dec. 31. http://www.bloomberg.com/news/articles/2015-02-18/buffett-dumping-exxon-stake-points-investors-to-rethink-oil-bets
Another Big Reason to Think Oil Prices Aren't Going Up Soon - Inventories bursting at the seams 'By'Tom Randall 5:57 AM AWST February 21, 2015 Oil just had its first weekly decline in a month, breaking a rally in crude prices. A bit of context: After what's happened over the last year, "rally" seems a bit of an overstatement. One big factor that may be driving prices down this week: The U.S. is pumping so much oil it's running out of places to stash it. Crude oil in storage in the U.S. has jumped to the highest levels in at least 80 years, according to a Bloomberg Industries analysis. The EIA this week reported that U.S. inventories rose 7.7 million barrels to 425.6 million. That's more than 20 percent higher than the five-year average. The buildup of supply has been "colossal" and is responsible for oil prices falling this week, Thomas Finlon, director of Energy Analytics Group LLC, told Bloomberg News. http://www.bloomberg.com/news/articles/2015-02-20/another-big-reason-to-think-oil-prices-aren-t-going-up-soon
Get Ready for $10 Oil by A. Gary Shilling Feb 16, 2015 6:00 PM EST At about $50 a barrel, crude oil prices are down by more than half from their June 2014 peak of $107. They may fall more, perhaps even as low as $10 to $20. Here’s why. http://www.bloombergview.com/articles/2015-02-16/oil-prices-likely-to-fall-as-supplies-rise-demand-falls
U.S. Oil Rigs Tumble Again, in Line With Twitter Estimates 'By'Tom Randall 2:13 AM AWST February 21, 2015 U.S. oil and gas rigs continued to fall this week despite still-rising levels of production. Drillers idled 48 rigs (37 of which were oil rigs), dropping the number to 1,310 and marking the 11th consecutive decline, Baker Hughes reported on Friday. The total U.S. rig count is down 32 percent since October, an unprecedented retreat. The median forecast from a Bloomberg survey of ten #RigCountGuesses on Twitter was for a decline of 52. http://www.bloomberg.com/news/articles/2015-02-20/u-s-oil-rigs-tumble-again-in-line-with-twitter-estimates
Arctic Oil Drillers Face Tighter U.S. Rules to Stop Spills 'By'Mark Drajem 2:35 AM AWST February 21, 2015 (Bloomberg) -- Royal Dutch Shell Plc and any oil drilling company that prospects in the Arctic Ocean must boost safety practices to prevent spills in the frigid and often hostile waters or mitigate the impact, U.S. regulators proposed Friday. The Interior Department’s first Arctic-specific drilling rules respond to mishaps that plagued Shell’s efforts three years ago, by shortening the drilling season and requiring companies to have a backup rig nearby. Shell had already agreed to do much of what’s in the proposal as part of its 2012 exploration plan, which was suspended after the stumbles. http://www.bloomberg.com/news/articles/2015-02-20/arctic-oil-drillers-face-tighter-u-s-rules-to-prevent-spills
16 February 2015: Crude Oil Bears Betting on Supply Glut Miss Market Rally - Bloomberg, why the number of oil rigs may not matter anymore, more on the Goldman view; Brent 61.30
Crude Oil Bears Betting on Supply Glut Miss Market Rally (Bloomberg) -- Speculators cut bullish oil bets for a fourth week, missing a market rebound. Hedge funds and other money managers decreased net-long positions in West Texas Intermediate crude by 9.1 percent since Jan. 13, U.S. Commodity Futures Trading Commission data show. Futures climbed for a third week as companies including Apache Corp. and Total SA announced spending cuts. Bad weather kept tankers from loading in southern Iraq and Libya’s production decreased. Baker Hughes Inc. said rigs targeting oil in the U.S. dropped to the lowest in almost five years.... “U.S. production hasn’t started to decline yet, but it is probably going to go flat in June, maybe as early as May,” James Williams, an economist at WTRG Economics, an energy-research firm in London, Arkansas, said by phone Feb. 13. “We’ll have a decline in production in the second half.” ... http://www.bloomberg.com/news/articles/2015-02-16/crude-oil-bears-betting-on-supply-glut-miss-market-rally-energy
This Chart Shows Why the Number of Oil Rigs May Not Matter Anymore - Rig history repeats itself by Tom Randall 5:31 AM AWST February 14, 2015; The number of oil rigs drilling new wells in the U.S. has collapsed at an unprecedented rate. The weekly number has gathered a huge following as investors try to figure out when the crash in oil prices has reached its bottom. Strangely, the number may be irrelevant.... But production isn't slowing yet. In fact, last week the U.S. pumped more crude than at any time since the 1970s. “The headline U.S. oil rig count offers little insight into the outlook for U.S. oil production growth,” Goldman Sachs analyst Damien Courvalin wrote in a Feb. 10 report.
We've seen this before, in natural gas. The chart below shows a striking separation between natural gas production, in orange, and natural gas rigs, in blue. The massive increase in efficiency this represents helped fuel the U.S. fracking boom and has led to some of the world's lowest prices in natural gas, in gray....
http://www.bloomberg.com/news/articles/2015-02-13/this-chart-shows-why-the-number-of-oil-rigs-may-not-matter-anymore
Goldman: Here's Why Oil Crashed—and Why Lower Prices Are Here to Stay - Too. Much. Oil. by Tom Randall 4:37 AM AWST February 12, 2015; Goldman’s model is simple on its face, looking at just two variables over time: the price of oil and the value of U.S. stocks (as measured by the S&P 500). The idea is that the stock market is a pretty good indicator of economic demand. So when stocks move in tandem with oil prices, demand is in the driver’s seat. When the price of oil moves in the opposite direction of stocks, the shock is coming from supply.... It’s a bit more complicated than that—for the statistically inclined, Goldman uses a “vector autoregression with sign restrictions”—but you get the idea.... The big take-away: “[T]he decline in oil has been driven by an oversupplied global oil market,” wrote Goldman economist Sven Jari Stehn. As a result, “the new equilibrium price of oil will likely be much lower than over the past decade.”
http://www.bloomberg.com/news/articles/2015-02-11/goldman-here-s-why-oil-crashed-and-why-lower-prices-are-here-to-stay
11 February 2015: Goldman, Citi expect resumption of lower prices; Russia oil taxes, Germany-Greece tussle, White House concern on Climate Change impact more than Terror; Brent 56.43
Goldman: The Plunge in Rig Count Still Isn't Enough to Stop Oil From Tumbling 'By'Ann Koh 7:15 PM AWST February 11, 2015; (Bloomberg) -- The slump in oil prices may not be over, according to Goldman Sachs Group Inc.... The decline in the number of U.S. drilling rigs that’s helped crude futures in New York rebound 14 percent from this year’s low isn’t enough to reduce an oversupply, the U.S. bank said in a note dated Feb. 10. Lower prices are needed for American output to slow sufficiently to rebalance global markets, it said.... Goldman joins Citigroup Inc. and Vitol Group, the world’s biggest independent oil trader, in signaling prices may resume a decline amid unrelenting production growth. West Texas Intermediate crude is still down by half from last year’s peak as the U.S. pumps the most in three decades. While companies have idled rigs and cut spending, it will be some time before production is affected, according to the International Energy Agency....
http://www.bloomberg.com/news/articles/2015-02-11/goldman-sees-oil-rally-fading-with-further-cuts-needed
Why Oil Could Fall to $20 a Barrel
http://www.wsj.com/video/why-oil-could-fall-to-20-a-barrel/40F4EA84-7C20-4B4E-8A12-1364756240AE.html?mod=djemTEW_h
Russia Faces Fight Over Billions in Oil Taxes on Crude Slump - Bloomberg Business
http://www.bloomberg.com/news/articles/2015-02-10/russia-faces-battle-over-billions-in-oil-taxes-after-crude-slump?cmpid=BBD021015&alcmpid=
Germany Toughens Tone With Greece Before EU Meetings - Bloomberg Business
http://www.bloomberg.com/news/articles/2015-02-10/schaeuble-says-over-for-greece-unless-aid-program-accepted?cmpid=BBD021015&alcmpid=
White House: Climate Change Has Bigger Impact Than Terror - http://www.wsj.com/video/white-house-climate-change-has-bigger-impact-than-terror/44DE368E-A350-4621-89ED-3E1B6A501283.html?mod=djemTEW_h; U.S. Estimates 20,000 Foreign Fighters Heading to Syria, Iraq - WSJ - http://www.wsj.com/articles/u-s-estimates-20-000-foreign-fighters-heading-to-syria-iraq-1423605432?mobile=y
10 February 2015: IEA talks oil price rebound but Citi report lowers forecast for crude (says $20 on way after current head-fake surge, rebound to $75 and $54 for the year), survival skills, undervalued stocks bottoming talk, oil jobs start drying up....Crude Oil (Brent) 57.77
Crude Oil (Brent) 57.77
Oil-Price Rebound Predicted - In the latest sign that the seven-month selloff in crude-oil prices may be nearing a bottom, an energy watchdog said that a recovery seems "inevitable" and the glut that has driven down prices by more than 50% since June could start to ease as soon as the second half of the year.... A wave of spending cuts by oil producers and a sharp decline in the number of rigs drilling for crude in the U.S. likely will slow the nation's oil-output growth, spurring a rebound in prices, the International Energy Agency said in a report.
http://www.wsj.com/articles/demand-for-opec-crude-will-rise-this-year-says-group-1423482563?mod=djemalertMARKET
WSJ: The seven-month selloff in crude-oil prices may be nearing a bottom. We report that the International Energy Agency, which coordinates energy policy among industrialized countries, added its voice to the chorus ofexperts who say that the global glut is abating. A day earlier, OPEC also said demand for the group’s oil would rise in 2015, reversing an earlier estimate that predicted a decline. Our story examines the implications of the new forecasts. If sustained, rising oil prices would curb the boon consumers have reaped from lower gasoline prices. They could also create headwinds for a global economy already struggling with fragile growth in some corners. But a stabilization in oil prices would also spell relief across financial markets, which have been rocked by the recent plunge in prices. U.S. stocks rebounded last week amid hopes that the fall in oil prices might finally be over. However, prices fell again in Asian trade this morning, amid uncertainty over whether they will stabilize and weak Chinese inflation data.....
Citi: Oil Could Plunge to $20, and This Might Be 'the End of OPEC' ; This time is different... The recent surge in oil prices is just a "head-fake," and oil as cheap as $20 a barrel may soon be on the way, Citigroup said in a report on Monday as it lowered its forecast for crude....A pullback in production isn't likely until the third quarter, Morse said. In the meantime, West Texas Intermediate Crude, which currently trades at around $52 a barrel, could fall to the $20 range "for a while," according to the report. The U.S. shale-oil revolution has broken OPEC's ability to manipulate prices and maximize profits for oil-producing countries.....Citi reduced its annual forecast for Brent crude for the second time in 2015. Prices in the $45-$55 range are unsustainable and will trigger "disinvestment from oil" and a fourth-quarter rebound to $75 a barrel, according to the report. Prices this year will likely average $54 a barrel..... http://www.bloomberg.com/news/articles/2015-02-09/citi-oil-could-plunge-to-20-and-this-might-be-the-end-of-opec-
Undervalued Energy Stock May Have Bottomed - http://www.wsj.com/video/undervalued-energy-stock-may-have-bottomed/39453C41-3EE9-4610-8E72-5621274577D0.html?mod=djemTEW_h
Oil Producers Stress Survival Skills - WSJ - http://www.wsj.com/articles/oil-producers-stress-survival-skills-1423520124?mobile=y
OPEC Sees More Demand for Its Oil, Less U.S. Output - WSJ - http://www.wsj.com/articles/demand-for-opec-crude-will-rise-this-year-says-group-1423482563?mobile=y
Oil Jobs Start Drying Up - Bloomberg Business - http://www.bloomberg.com/news/articles/2015-02-09/roughnecks-and-roustabouts-still-have-their-fracking-jobs-but-for-how-long-?cmpid=BBD020915&alcmpid=
6 February 2015: WSJ articles "A Crude Awakening" on oil price dip on US 80-year high inventories, why cheaper oil may not lead to economic growth, analysts failing to see price fall; Brent holding up at $57.20, Saudis deepen Asia oil discount
A Crude Awakening by The 10-Point from Gerard Baker, 5 February 2015
Falling oil prices were supposed to boost growth in a host of major oil-importing economies. But so far, at least, it doesn’t seem to be working that way. Our story looks at the economic consequences of tumbling oil prices. Some governments have already moved to use the opportunity of lower energy prices to shore up their flagging revenues. We note also that falling oil costs have pumped up deflation fears across Europe and Japan, adding to the risk that consumers and businesses will hold back on spending and investment. And one expert noted that the more oil prices lower inflation expectations in those countries, the less effective new central bank easy-money policies meant to spur growth will be. So far, political and economic headwinds appear to be offsetting any gains seeping in from cheaper energy costs. Meanwhile, oil prices posted their largest one-day drop in two months on Wednesday as data showed U.S. crude supplies near 80-year highs. And we examine the failure of Wall Street analysts to foresee the depth of the oil decline.
Saudis Deepen Asia Oil Discount to a Record Low 'By' Mark Shenkand Anthony Dipaola
8:00 AM BNT February 6, 2015 (Bloomberg) -- Saudi Arabia, the world’s largest crude exporter, cut prices for March oil sales to Asia, a sign that the desert kingdom is fighting for market share.
State-owned Saudi Arabian Oil Co. lowered its official selling price for Arab Light 90 cents to $2.30 a barrel less than Middle East benchmarks, the company said in an e-mailed statement Thursday. That’s the lowest in at least 14 years since Bloomberg began gathering data..... http://www.bloomberg.com/news/articles/2015-02-06/saudis-deepen-asia-oil-discount-to-a-a-record-low
Oil Prices Slump as Inventories Rise Near 80-Year Highs - Nymex Crude Posts Biggest One-Day Drop in Two Months By Nicole Friedman; Oil prices tumbled 8.7% on Wednesday, halting a robust four-day rally, after data showed that U.S. crude supplies had climbed to their highest level in about 80 years.... U.S. crude oil for March delivery sank $4.60, or 8.7%, to $48.45 a barrel on the New York Mercantile Exchange, the largest one-day decline since Nov. 28, 2014.... http://www.wsj.com/articles/oil-holds-on-to-bulk-of-recent-gains-1423031216?mod=djem10point
Why Cheaper Oil Doesn’t Always Lead to Economic Growth - Some Governments Raise Taxes, Keeping Pump Prices High; Lower Costs Also Stoke Deflation Fears By Ian Talley in Washington and Brian Spegele in Beijing... Tumbling oil prices were supposed to boost growth in a host of major oil-importing economies. It isn’t necessarily working out that way.... http://www.wsj.com/articles/why-cheaper-oil-doesnt-always-lead-to-economic-growth-1423083687?mod=djem10point
Analysts Blow Calls on Oil Stocks - In Assessing Energy Companies, Many Failed to Foresee Depth of Crude’s Decline By Alexandra Scaggs In late November, as collapsing oil prices pummeled energy-company shares, a Raymond James & Associates analyst told investors that energy stocks were still a good bet.... http://www.wsj.com/articles/analysts-blow-calls-on-oil-1423101306?mod=djem10point
4 February 2015: Oil price has been rebounding smartly (Brent now at $57.75), US producers' strike helps, BP and Exxon news, Rabobank sees limited impact of lower oil price on food industry, palm oil price has poor start in 2015
source: Bloomberg.com
U.S. Oil Settles Up 7% at Highest Level of the Year - Oil prices soared Tuesday, providing investors some respite from a prolonged selloff that rattled financial markets, the energy sector and oil-dependent economies. The benchmark crude-oil contract on the New York Mercantile Exchange settled up 7% at $53.05 a barrel, the highest level since Dec. 31. Nymex crude is up 19% from its Jan. 28 low. http://www.wsj.com/articles/oil-extends-rally-but-markets-cautious-over-rebound-1422944186?mod=djemalertMARKET
Bloomberg - U.S. Producers’ Strike Pushes Oil Prices Higher http://bloom.bg/16frpFg
Lower oil price to have ‘limited’ impact on food industry: Rabobank
http://mobile.foodnavigator-usa.com/Markets/Lower-oil-price-to-have-limited-impact-on-food-industry-Rabobank/?utm_source=newsletter_daily&utm_medium=email&utm_campaign=30-Jan-2015&c=g5U1F%2FHXoYpplOhW9riJWVONFcwmWNry#.VM6xyckZ7qA
Palm oil price has poor start for the year - Bloomberg, http://www.bloomberg.com/news/articles/2015-01-30/palm-oil-heads-for-worst-start-to-year-since-10-as-demand-slows
Bloomberg - BP Fourth-Quarter Profit Falls on Slumping Crude Oil Prices http://www.bloomberg.com/news/articles/2015-02-03/bp-fourth-quarter-profit-declines-on-slumping-crude-oil-prices
Bloomberg - Obama to Oil Industry: Drill There, Not Here http://www.bloomberg.com/news/articles/2015-01-28/obama-to-oil-industry-drill-there-not-here
Bloomberg - Seven Reasons Cheap Oil Can't Stop Renewables Now http://www.bloomberg.com/news/articles/2015-01-30/seven-reasons-cheap-oil-can-t-stop-renewables-now
Bloomberg - I Survived the Global Crisis Only to Find It's the Recovery That Hurts: Australia http://www.bloomberg.com/news/articles/2015-02-03/i-survived-the-global-crisis-only-to-find-it-s-the-recovery-that-hurts-australia
Exxon Could Be the Big Winner of the Oil Crash - Bloomberg Business, http://www.bloomberg.com/news/articles/2015-02-02/exxon-could-be-the-big-winner-of-the-oil-crash?cmpid=BBD020215&alcmpid=
Exxon’s Profit Drops 21% as Production Declines - WSJ, http://www.wsj.com/articles/exxons-profit-drops-21-1422882396?mobile=y
Bloomberg - Bankers See $1 Trillion of Zombie Investments Stranded in the Oil Fields http://www.bloomberg.com/news/articles/2014-12-18/bankers-see-1-trillion-of-investments-stranded-in-the-oil-fields
28 January 2015: Views from an oil economist, Bloomberg reports hedge funds bet on further price fall, S&P cuts Russia to Junk, falling oil prices and wind and solar
Brent Crude this morning $49.60
In conversation with an oil economist from an oil and gas company (a few days ago), some views shared: oil price could drop further as inventories are building up and storage getting full with China turning back cargo. Saudi marginal cost of production is low around $5. It may take 3 years or so for oil prices to recover toward $100 and cash rich oil companies are seeking buying opportunities. The offer of sale of assets was apparent in the industry, even before the oil price collapse.
Bloomberg - Hedge Funds Bet Oil Will Fall Further http://bloom.bg/1CHWY7m
S&P Cuts Russia Credit Rating to Junk, Standard Poor's Ratings Services on Monday cut its credit rating on Russia to junk, deeming the country below investment grade for the first time in more than 10 years. The one-notch downgrade of Russia's long-term foreign-currency rating was largely expected and priced into Russian asset prices.
http://www.wsj.com/articles/s-p-downgrades-russia-foreign-currency-rating-to-junk-1422297409?mod=djemalertMARKET
Will falling oil prices kill wind and solar? http://www.scientificamerican.com/article/will-falling-oil-prices-kill-wind-and-solar-power/?WT.mc_id=SA_Facebook
26 January 2015: Saudis worry most about falling demand, Saudi's King Abdullah died age 90, new King Salman to maintain oil policies, Alwaleed: no more $100+ oil; Brent now around $48
For Saudis, Falling Demand for Oil Is the Biggest Concern By Isaac Arnsdorf Jan 26, 2015 11:55 AM GMT+0800 ; As the world’s oil producers wring their hands over a global glut that’s pushing down prices, evidence is mounting that Saudi Arabia is more concerned about shrinking demand.
The world’s largest exporter has chosen not to cut production, counting instead on lower prices to stimulate consumption, said Mohammad Al Sabban, an adviser to Saudi Arabia’s petroleum minister from 1988 to 2013. The Saudis are keeping an eye on investments in fuel efficiency and renewable energy, according to Francisco Blanch, Bank of America Corp.’s head of global commodity research.
http://www.bloomberg.com/news/2015-01-26/for-saudis-falling-demand-for-oil-is-the-biggest-concern.html
Prince Alwaleed: We'll Never See Oil at $100-Plus Again; http://www.bloomberg.com/video/what-can-we-expect-from-saudi-arabia-s-king-salman-7UF~C3UhSGGI4Hx1Iyn3NA.html
Saudi Arabia’s King Salman to Maintain Oil Policies; http://www.bloomberg.com/video/saudi-arabia-s-king-salman-to-maintain-oil-policies-x09~~BBeTRm3jXpBuiTX4g.html
It's downhill for US after Saudi king dies: Experts by Tom DiChristopher
Friday, 23 Jan 2015 | 1:38 PM ET; http://www.cnbc.com/id/102362872
Saudi Arabia’s King Abdullah dies at 90 - Abdullah’s half-brother Salman pledges to continue predecessors’ policies after ascending the throne
http://www.theguardian.com/world/2015/jan/22/saudi-arabia-king-abdullah-dies
King Abdullah of Saudi Arabia obituary - Monarch whose reign saw the spread of division, corruption and strife, and was saved only by ‘black gold’
by Madawi al-Rasheed, The Guardian, Thursday 22 January 2015 23.43 GMT
http://www.theguardian.com/world/2015/jan/22/king-abdullah-of-saudi-Arabia
20 January 2015: US resists price intervention, Iran says it can withstand $25; contango, oil storage and offshore supertankers
Oil Drops Below $48 a Barrel as U.S. Resists Market Intervention By Ben Sharples Jan 20, 2015 8:53 AM GMT+0800; Oil traded below $48 a barrel as the U.S. signaled it won’t intervene in the market even as prices decline.... Futures fell as much as 3 percent in New York from the Jan. 16 settlement after floor trading was closed Monday for the Martin Luther King Jr. holiday. The U.S., the world’s biggest oil user, will let the market decide what happens, according to Amos Hochstein, the State Department’s energy envoy. Iran is strong enough to withstand a deeper slump even if it must sell at $25 a barrel, Oil Minister Bijan Namdar Zanganeh said.... http://www.bloomberg.com/news/2015-01-19/oil-drops-below-48-a-barrel-as-u-s-resists-market-intervention.html
World’s Largest Traders Use Offshore Supertankers to Store Oil - Companies Are Buying Oil Now to Sell Later When Prices Rise By Sarah Kent And Georgi Kantchev; The supertanker TI Oceania was built to ferry vast quantities of oil across oceans, but for the next year it is expected to remain anchored off the coast of Singapore, storing millions of barrels of oil for Vitol SA, a giant trading house.... According to shipbrokers and analysts, the 3-million-barrel megaship—one of the largest in the world—is just one example of efforts by traders to turn a profit in the slumping global oil market.... http://www.wsj.com/articles/worlds-largest-traders-use-offshore-supertankers-to-store-oil-1421689744?tesla=y
Commodity Traders Exploit Crude Crash to Make Oil Storage King By Andy Hoffman and Rupert Rowling Jan 14, 2015 1:00 PM GMT+0800 While the 28-company STOXX 600 Oil & Gas Index has fallen 3.7 percent this month, shares of Rotterdam-based Royal Vopak NV (VPK), the world’s largest independent storage tank operator, have surged 14 percent.... “We don’t know specifically about occupancy rates but we hear from companies that inquiries for tank storage are growing,” Ronald Backers, adviser for business intelligence at the Port of Rotterdam, said by phone Jan. 12. Europe’s largest port has crude oil tank storage of 85.6 million barrels.... Refiners, tankage firms and traders that invested in oil storage capacity are benefiting as the slump in crude to below $45 a barrel deepened what’s called contango, a relatively rare situation where prices for oil delivery later this year are higher than current prices. Vitol Group, Mercuria Energy Group Ltd. and Gunvor Group Ltd. are among the commodity houses poised to profit by storing oil and petroleum products to sell in the future.... http://www.bloomberg.com/news/2015-01-13/oil-storage-is-king-as-commodity-traders-exploit-crash-in-crude.html
18 January 2015: Brent ends the week at $50.17
source: www.bloomberg.com
14 January 2015: Bloomberg reports oil at "$40 and below" gaining traction in financial markets, 1980s OPEC and supply shock history; palm oil watchers worry about its biodiesel demand (16% of output) on its wide price premium as oil price sinks
Oil at $40, and Below, Gaining Traction on Wall Street By Grant Smith Jan 14, 2015 8:01 AM GMT+0800; Brace for $40-a-barrel oil. The U.S. benchmark crude price, down more than $60 since June to below $45 yesterday, is on the way to this next threshold, said Societe Generale SA and Bank of America Corp. And Goldman Sachs Group Inc. says that West Texas Intermediate needs to remain near $40 during the first half to deter investment in new supplies that would add to the glut.... http://www.bloomberg.com/news/2015-01-14/oil-at-40-and-below-gaining-traction-on-wall-street.html
Arctic Explorers Retreat From Hostile Waters With Oil Prices Low By Mikael Holter Jan 14, 2015 7:01 AM GMT+0800; When Statoil acquired the last of three licenses off Greenland’s west coast in January 2012, oil at more than $110 a barrel made exploring the iceberg-ridden waters an attractive proposition..... http://www.bloomberg.com/news/2015-01-13/arctic-explorers-retreat-from-hostile-waters-with-oil-prices-low.html
Oil Collapse of 1986 Shows Rebound Could Be Years Away By Mark Shenk Jan 14, 2015 8:00 AM GMT+0800; The last time excess supply caused a plunge in oil, it took almost five years for prices to recover......
Bloomberg.com screenshot, source: http://www.bloomberg.com/news/2015-01-13/oil-s-1986-collapse-signals-rebound-years-away-chart-of-the-day.html
Trees Under Water in Malaysia Fueling Rally in Palm Oil By Ranjeetha Pakiam Jan 13, 2015 5:27 PM GMT+0800; .....The slump in crude-oil prices may erode the appeal of palm oil as a source of fuel. About 16 percent of the world crop is used to make biodiesel. Rising crude output and slowing demand sent prices down 52 percent in the past year in New York to $44.41 a barrel today, the lowest intraday price since 2009.... “When you’ve got an oil-price environment that I see, you can’t be bullish on any commodities,” said London-based Doug King, the chief investment officer at the Merchant Commodity Fund, which manages $260 million. Crude may drop below $40 as U.S. output compounds the surplus, he said.... http://www.bloomberg.com/news/2015-01-13/trees-under-water-in-malaysia-fueling-rally-in-palm-oil.html
13 January 2015: As oil slide continues, despondency on energy sector debt problems, US production shut down, across sector earnings cut gloom, fossil fuel riches naivety, Norway considers tapping reserves and call to revamp government spending. Canada tar sands output growth seen as robust.
The 10-Point: My Guide to The WSJ, 13 January 2015: The war of attrition among top oil-producing nations is far from over. Even as oil prices settled below $50 a barrel yesterday for the first time in nearly six years, our story looks at why oil-sands operators aren’t likely to shut off the tap any time soon. Yesterday major producer Canadian Natural Resources Ltd. became the latest to underscore the resilience of oil-sands growth. The company said lower oil prices will force it to trim investment on new projects and curtail its grow, but it still expects output to grow. “It’s not well understood just how robust the oil sands are. If you stopped expansion of the oil sands tomorrow, you would have no decline in the production base for decades,” the chief executive of one operator said. Meanwhile, oil prices continued to fall this morning after the United Arab Emirates’ oil minister said that OPEC would keep output unchanged, pushing the U.S. oil benchmark below the $45 a barrel mark. And energy-producing U.S. states are paring budget forecasts and planning spending cuts amid the plunge in prices.
As Oil Slips Below $50, Canada Digs In for Long Haul By Chester Dawson Jan. 12, 2015 9:04 p.m. ET Oil-Sands Operators, Seeing Long-Term Value, Aren’t Likely to Shut Off the Tap Any Time Soon; Canadian Natural will continue expanding production because it expects higher volume will cut operating expenses at its mainstay Horizon mine, currently at 37.13 Canadian dollars a barrel, by at least another 10 Canadian dollars a barrel.“A lot of the costs are fixed in nature,” Chief Financial Officer Corey Bieber said in an interview Monday. “You don’t necessarily increase your workforce in a corresponding ratio [with production]. If you can increase your denominator and manage your numerator effectively, you wind up with a lower cost per barrel.” http://www.wsj.com/articles/as-oil-slips-below-50-canada-digs-in-for-long-haul-1421114641?mod=djem10point
US-Canada oil imports, screenshot, source: http://www.wsj.com/articles/as-oil-slips-below-50-canada-digs-in-for-long-haul-1421114641?mod=djem10point
Brent Crude Settles Below $50 for First Time in Nearly Six Years; The global oil benchmark settled below $50 a barrel for the first time in nearly six years Monday as major banks continued to slash their forecasts, saying lower prices are needed to reduce global supplies.... Brent dropped $2.68, or 5.3%, to $47.43 a barrel on ICE Futures Europe, the lowest settlement since March 2009. After dropping in half in 2014, Brent oil prices are already down 17% for the year, as robust global supply growth continues to outpace demand.... http://www.wsj.com/articles/brent-crude-falls-below-50-in-asian-trading-1421039495?mod=djemalertMARKET
source: Bloomberg.com 13 Jan 2015, 1.35pm Singapore
Headlines / snippets from Bloomberg.com:
Shale Drillers Can Brag About Their Holdings. Investors Ask: How's Your Debt? By Oliver Renick and Isaac Arnsdorf Jan 13, 2015 3:38 AM GMT+0800 U.S. shale drillers may tout how much oil they have in the ground or how cheaply they can get it out. For stock investors, what matters most is debt. The worst performers among U.S. oil producers in a Bloomberg index owe about 5.7 times more than they earn, before certain deductions, compared with 1.7 times for companies that have taken less of a hit. Operations, such as where the companies drill or how much oil versus gas they pump, matter less.... “With oil prices below $50 and approaching $40, we’re in survivor mode,” Steven Rees, who helps oversee about $1 trillion as global head of equity strategy at JPMorgan Private Bank, said via phone. “The companies with the higher degrees of leverage have underperformed, and you don’t want to own those because there’s a fair amount of uncertainty as to whether they can repay that debt.” .... http://www.bloomberg.com/news/2015-01-12/shale-debt-matters-most-to-stock-investors-as-oil-plunges.html
America's Going to Lose the Oil Price War by Leonid Bershidsky Jan 12, 2015 12:0 PM EST The financial debacle that has befallen Russia as the price of Brent crude dropped 50 percent in the last four months has overshadowed the one that potentially awaits the U.S. shale industry in 2015. It's time to heed it, because Saudi Arabia and other major Middle Eastern oil producers are unlikely to blink and cut output, and the price is now approaching a level where U.S. production will begin shutting down..... http://www.bloombergview.com/articles/2015-01-12/americas-going-to-lose-the-oil-price-war
Oil Whacks S&P 500 Earnings Growth By Lu Wang Jan 13, 2015 5:41 AM GMT+0800 While stock investors wait for the benefits of cheaper oil to seep into the economy, all they can see lately is downside. Forecasts for first-quarter profits in the Standard & Poor’s 500 Index have fallen by 6.4 percentage points from three months ago, the biggest decrease since 2009, according to more than 6,000 analyst estimates compiled by Bloomberg. Reductions spread across nine of 10 industry groups and energy companies saw the biggest cut..... http://www.bloomberg.com/news/2015-01-12/earnings-pessimism-jumps-as-oil-threatens-s-p-500-growth.html
Goldman Sees Need for $40 Oil as OPEC Cut Forecast Abandoned By Chou Hui Hong Jan 12, 2015 6:20 PM GMT+0800 Goldman Sachs said U.S. oil prices need to trade near $40 a barrel in the first half of this year to curb shale investments as it gave up on OPEC cutting output to balance the market..... http://www.bloomberg.com/news/2015-01-12/goldman-sees-need-for-40-oil-as-forecast-for-opec-cut-abandoned.html
$50 Oil Kills Bonanza Dream That Made Greenlanders Millionaires By Peter Levring Jan 12, 2015 7:00 AM GMT+0800 Greenland, an island that may be sitting on trillions of dollars of oil, has had to acknowledge that its dream of tapping into that wealth looks increasingly far-fetched. Back when oil was headed for $150 a barrel, Greenlanders girded for a production boom after inviting in some of the world’s biggest explorers, including Chevron Corp. and Exxon Mobil Corp. (XOM) Now, with Brent crude dipping below $50 last week, Deputy Prime Minister Andreas Uldum says Greenland’s hope of growing rich quickly on fossil fuels was “naïve.” ... ://www.bloomberg.com/news/2015-01-11/-50-oil-kills-bonanza-dream-that-made-greenlanders-millionaires.html
Oil Losses Force Norway to Consider Measures to Back Economy By Mikael Holter, Saleha Mohsin and Jonas Cho Walsgard Jan 9, 2015 6:37 PM GMT+0800; Norway is considering tapping reserve funds to shield western Europe’s biggest oil producer from the worst slump in crude prices in more than half a decade.... Prime Minister Erna Solberg said the government is now “on alert” to respond to the rout. “If the economic situation requires it, we can react quickly,” she said yesterday at a conference in Oslo organized by Norway’s confederation of industry. Erna Solberg, Norway's Prime Minister, said her government is working on models that... http://www.bloomberg.com/news/2015-01-08/norway-on-alert-as-oil-losses-have-government-exploring-options.html
Hayman’s Bass Sees Oil Slump Disciplining Petro-State Norway By Saleha Mohsin Jan 8, 2015 5:20 PM GMT+0800 Hayman Capital Management founder and chief investment officer Kyle Bass said, Norway... Read More The oil rout that has dragged down Norway’s krone since June will ultimately discipline a government that has relied too much on its petro-dollars to finance expenditure. That’s according to Kyle Bass, the founder and chief investment officer of Hayman Capital Management LP, who was in Oslo yesterday to attend a Skagen AS conference.... Norway “trades like an emerging market because of its dependence on crude,” Bass, one of the first hedge-fund managers to predict and make money on the U.S. subprime mortgage crisis, said in an interview. “A traditional cleansing is a good thing in the long run, it keeps government spending in check. Politicians are going to have to figure out how to cut back on the spending that they shouldn’t have been doing in the first place.” .... http://www.bloomberg.com/news/2015-01-07/hayman-s-bass-says-oil-plunge-will-discipline-petro-state-norway.html
12 Jan 2015: Palm oil on multi-month highs on supply - weather issues; Brent crude still languishes around $49.50
1 year price chart, source: http://www.mpob.gov.my/
VEGOILS-Palm oil hits 6-month high on tight supply, monsoon woes - By Anuradha Raghu RTRS 08-Jan-2015 18:14 (Updates prices); Palm rises to highest since July 11 on concerns over floods Heavy rain warning over Peninsular Malaysia upped to "orange stage" KUALA LUMPUR, Jan 8 (Reuters) - Malaysian palm oil futures rose for a third day to hit a near six-month high on Thursday, on fears that supplies of the tropical oil will be further tightened by another round of monsoon rains in the No.2 grower.... "Supply in the near term is tight. We don't know what the damage will be for January," said a trader with a foreign commodities brokerage in Malaysia.... The trader added that until worries of floods ease, prices will likely remain propped up between 2,320 ringgit and 2,420 ringgit.....
Bloomberg - Russia Cut to One Step Above Junk by Fitch on Oil, Sanctions http://bloom.bg/1DH3hXw
Bloomberg - How OPEC Weaponized the Price of Oil Against U.S. Drillers http://bloom.bg/1BMPLQA
Former BP Gas Salesman Is Sorry About How Much Money He Made - Bloomberg View; http://www.bloombergview.com/articles/2015-01-09/former-bp-gas-salesman-is-sorry-about-how-much-money-he-made
7 Jan 2015: Brent dips below $50
source: Bloomberg.com on 7 Jan 2015, 5pm, Singapore
7 Jan 2015: Prices extend drops, good for US and other economies, some soft commodities rally on weather, good times for asset investors over? Singapore (commodity) junk bond worries, Asian energy equities drop. Winners & losers of oil crash (Middle East a winner on reserves?).
source: Bloomberg.com on 7 Jan 2015, 906am, Singapore
Oil Extends Drop Below $48 as U.S. Stockpiles Seen Rising By Moming Zhou and Grant Smith Jan 7, 2015 6:12 AM GMT+0800 Jan. 6 (Bloomberg) -- Oil extended losses below $48 a barrel amid speculation that U.S. inventories will expand, deepening a global supply glut that’s driven prices to a five-year low. Futures declined for a fourth day. Stockpiles in the world’s biggest oil-consuming country probably rose by 700,000 barrels last week, a Bloomberg News survey showed before a government report tomorrow.... http://www.bloomberg.com/news/2015-01-06/crude-holds-slump-to-50-as-global-supply-glut-seen-persisting.html
As Oil Drops Below $50, Can There Be Too Much of a Good Thing? By Peter Coy and Matthew Philips January 06, 2015 Oil falls below $50 a barrel on Jan. 5, and the Dow Jones Industrial Average plunges nearly 330 points. Seems like an open-and-shut case that the price plunge is getting to be a problem. People remember that in 1998, a sharp decline in the price of oil contributed to a Russian default that rocked the global financial system. Not quite. Cheaper oil is still creating more winners than losers. Far more people live in oil-importing countries than live in oil-exporting countries. The U.S., for one, remains a net importer. The well-publicized travails of U.S. shale oil producers are small compared with the gains by American consumers and businesses that are paying less for gasoline, diesel, jet fuel, petrochemicals, and the like. With fuel prices down, people are driving more miles and buying more cars and trucks.... http://www.businessweek.com/articles/2015-01-06/oil-below-50-is-still-good-news?campaign_id=DN010615
Coffee With Sugar Rally on Brazil Concerns to Defy Oil Collapse By Luzi Ann Javier and Marvin G. Perez Jan 7, 2015 2:39 AM GMT+0800 Defying the rout in oil prices, the coffee and sugar markets are rallying because of supply concerns in Brazil, the world’s top producer and exporter of the so-called soft commodities. Those raw materials helped prevent the Bloomberg Commodity Index of 22 energy, agriculture and metal prices from slumping to a 12-year low amid a collapse in crude and fuel. The broad gauge has tumbled to the lowest since March 2009, and a drop of an additional 1.4 percent will send the measure to a level last seen in November 2002. In 2014, arabica coffee soared 50 percent, the most among index components, amid the most-severe drought in decades. On ICE Futures U.S. in New York, coffee posted the biggest two-day rally since April, and an explosion in sugar trading triggered a circuit breaker on the exchange after the price surged as much as 5.6 percent. The sweetener jumped the most in 31 months. Rain in Brazil will be below average in the next six to 10 days, MDA Weather Services in Gaithersburg, Maryland, forecasts.... http://www.bloomberg.com/news/2015-01-06/coffee-with-sugar-rally-on-brazil-concerns-to-defy-oil-collapse.html
Palm Oil Output Seen Slumping 20% After Malaysian Floods By Ranjeetha Pakiam Dec 31, 2014 6:31 PM GMT+0800 Palm oil output in Malaysia will decline this month and next as severe flooding disrupts harvesting in the largest exporter after Indonesia, exacerbating a seasonal drop in production, according to RHB Investment Bank Bhd. Output may contract by as much as 20 percent in December from 1.75 million metric tons in November, according to Alvin Tai, an analyst at the bank who’s covered the plantation industry for 11 years. There’ll be a significant reduction in harvesting, he said by phone in Kuala Lumpur.... http://www.bloomberg.com/news/2014-12-30/palm-oil-output-may-slump-20-as-floods-hit-malaysia-rhb-says.html
Bill Gross Says the Good Times Are Over By Mary Childs Jan 7, 2015 5:45 AM GMT+0800 Bill Gross, the former manager of the world’s largest bond fund, said prices for many assets will fall this year as record-low interest rates fail to restore sufficient economic growth. With global expansion still sputtering after years of interest rates near zero, investors will gradually seek alternatives to risky assets, Gross wrote today in an investment outlook for Janus Capital Group Inc. (JNS), where he runs the $1.2 billion Janus Global Unconstrained Bond Fund. “When the year is done, there will be minus signs in front of returns for many asset classes,” Gross, 70, wrote in the outlook. “The good times are over.” ... http://www.bloomberg.com/news/2015-01-06/gross-says-good-times-are-over-with-markets-set-to-fall.html
Singapore Private Bankers Wake Up to Junk Bond Risks as Cracks Emerge By David Yong and Christopher Langner Jan 6, 2015 11:19 AM GMT+0800; Demand for higher returns in Singapore bonds from the city’s swelling private banking industry has brought with it greater risks.... Junk-rated companies in Singapore must find funds to repay $2.1 billion of debt this year, up from $1.7 billion in 2014 and $1.1 billion in 2013, according to data compiled by Bloomberg. That accounts for 35 percent of all bonds maturing in Singapore in 2015. Wealthy clients of the island’s private banks snapped up 86 percent of the highest-yielding local bonds last year, the data show.... Halcyon Agri, which makes rubber for car tires, raised S$125 million in July selling 6.5 percent notes due 2019. Last month it sought the consent of bondholders to not comply with one of its interest-coverage ratios until the third quarter of 2015. Investors holding 82.8 percent indicated they’ll allow it, according to a Dec. 30 stock exchange filing.... Bonds of Swiber Holdings Ltd., an oil services company, are among the worst performing over the past month. Its S$130 million of 5.125 percent 2016 notes sold in May are trading at 90.5 percent of par from as high as 100.35 percent after issue..... http://www.bloomberg.com/news/2015-01-05/singapore-alert-to-risks-as-cracks-emerge-for-junk-asean-credit.html
Asian Stocks Extend Drop, Led by Energy Companies on Oil Plunge By Jonathan Burgos Jan 7, 2015 8:10 AM GMT+0800; Asian stocks fell, after yesterday sinking the most in nine months, as U.S. equities extended declines and the slump in crude oil deepened. The MSCI Asia Pacific Index (MXAP) declined 0.3 percent to 134.57 as of 9:03 a.m. in Tokyo, with energy companies dropping the most. The Asian gauge slumped 1.7 percent yesterday and the Standard & Poor’s 500 Index fell for a fifth day, extending the longest losing streak in 13 months..... http://www.bloomberg.com/news/2015-01-07/asian-stocks-extend-drop-led-by-energy-companies-on-oil-plunge.html
How the Bear Market in Crude Oil Has Polluted Non-Energy Stocks By Michael P. Regan Jan 7, 2015 1:41 AM GMT+0800; Perusing the list of the biggest stock-market losers since the price of oil peaked in June yields some predictable results. You have your large-cap energy companies like Transocean Ltd., Denbury Resources Inc., Nabors Industries Ltd., Noble Corp. and Halliburton Co., all down at least 45 percent. Yet mixed in with all the obvious ugliness are some names that bring to mind the question asked of Billy Joel by those drinkers at the piano bar, or perhaps even some of the wedding guests who watched him walk down the aisle with Christie Brinkley: Man, what are you doing here? The big bets on high energy prices made by companies like Ford Motor Co. (down 13 percent since oil peaked on June 20) or Tesla Motors Inc. (down 10 percent) or Boeing Co. (down 3.9 percent) jump immediately to mind.... Not so obvious, unless you follow the stock closely, is the investment made by Fifth Third Bancorp (FITB), one of the regional lenders that tried to chase the fracking boom. (It’s down 12 percent since June 20.) Fitch’s list of banks with high concentrations of loans to the industry is topped by BOK Financial Corp., which is down 13 percent since June 20.; Cullen/Frost Bankers Inc., down 16 percent; Hancock Holding Company, down 19 percent; Comerica Inc., down 14 percent; and Amergy Bank of Texas, a subsidiary of Zions Bancorp, which is down 13 percent.... Losses are even worse among the industrial companies that provide the services and sell the pipes, valves and assorted doodads used to pump oil and gas.... Morgan Stanley last month detailed stocks that stand to benefit from lower oil prices, such as airlines and consumer companies, and concluded cheaper fuel is a net benefit for the U.S. economy....
http://www.bloomberg.com/news/2015-01-06/how-the-bear-market-in-crude-oil-has-polluted-non-energy-stocks.html
The Biggest Winners and Unluckiest Losers of the Oil Crash By Isaac Arnsdorf - Dec 4, 2014 6:25 AM GMT+0800; Winner: Ship Owners - Charter rates for oil tankers surged as China booked more cargoes and fuel costs dropped. Loser: Corporate Borrowers - The selloff in energy companies' debt is also leading investors to pull out of other junk bonds, sending yields to the highest in more than a year. Loser: Keystone XL Pipeline - Cheaper oil challenges the economics of developing Canada's oil sands. Some say the industry has already moved on. Winner: Saudi Arabia - The desert kingdom flexed its muscle at November's OPEC meeting by overruling members, showing that it's still the boss. It needs about $97.50 a barrel to balance its budget, but it's got $736 billion banked up. Winner: China - Now the world's second-biggest importer, China is taking advantage of slumping prices to build up strategic stockpiles. Cheaper fuel could reverse China's slowing economy and make it easier for the central bank to cut interest rates. Winner: Ed Morse of Citigroup - Citigroup's head of commodities research said early and often that surging U.S. oil production would drive down prices. His prediction of $75 a barrel went further than other analysts. Now it seems quaint. Loser: BP - The British oil giant said Dec. 10 it would write down about $1 billion as it overhauls operations through next year.... http://www.bloomberg.com/slideshow/2014-12-03/the-biggest-winners-and-unluckiest-losers-of-the-oil-crash.html
6 Jan 2015: Brent drops toward $53, Euro under pressure, $20 cost for most of US, hedges help US producers, write downs loom, Australia mining towns gloom
source: Bloomberg.com, 6 Jan 2015, 8.45am Singapore
Exxon Mobil Shows Why U.S. Oil Output Rises as Prices Plunge By Joe Carroll Dec 19, 2014 5:40 AM GMT+0800; ... Existing wells remain profitable even as benchmark crude futures hover near the $55-a-barrel mark because operating costs going forward are usually $25 or less, Tom Petrie, chairman of Petrie Partners Inc., said in a Dec. 15 interview on the Bloomberg Surveillance television program.... That’s why prices that have tumbled 47 percent from this year’s peak on June 20 haven’t prompted any American oil producers to shut down wells, said Petrie, a U.S. Military Academy at West Point graduate who has advised Saudi Arabia, Alaska and the U.S. government on energy issues.... The average cost to operate an existing well in most parts of the U.S. “is about $20 a barrel,” Petrie said. “It might be $5 higher or it might be $5 lower, that’s the out-of-pocket costs that we’re talking about. Until you dip into that and start losing money on a cash basis day in, day out, you don’t think about shutting in” wells.... http://www.bloomberg.com/news/2014-12-18/exxon-mobil-shows-why-u-s-oil-output-rises-as-prices-plummet.html
Revamped U.S. oil hedges may test OPEC's patience By Lucas Iberico Lozada Mon Jan 5, 2015 1:10am EST NEW YORK (Reuters) - As a war of nerves between U.S. shale producers and Gulf powerhouses intensifies, OPEC's biggest members are counting down the months until their upstart rivals lose the one thing shielding them from crashing oil prices - hedges. They may need much more patience than they reckon, however, because those hedges are a moving target. Rather than wait for their price insurance to run out, many companies are racing to revamp their policies, cashing in well-placed hedges to increase the number of future barrels hedged, according to industry consultants, bankers and analysts familiar with the deals. OPEC officials hope that once U.S. oil companies get fully exposed to the impact of an over 50 percent slide in crude prices since last June, they will have to drill fewer new wells, causing U.S. production growth to stall and putting a floor under oil prices now testing $50 a barrel..... http://mobile.reuters.com/article/idUSKBN0KE0BX20150105?irpc=932
Oilfield Writedowns Loom as Market Collapse Guts Drilling Values By Joe Carroll Jan 6, 2015 6:24 AM GMT+0800; Tumbling crude prices will trigger a flood of oilfield writedowns starting this month after industry returns slumped to a 16-year low, calling into question half a decade of exploration... With crude prices down more than 50 percent from their 2014 peak, fields as far-flung as Kazakhstan and Australia are no longer worth pumping, said a team of Citigroup Inc. analysts led by Alastair Syme. Companies on the hook for risky, high-cost projects that don’t make sense in a $50-a-barrel market include international titans such as Royal Dutch Shell Plc and small wildcatters like Sanchez Energy Corp.... http://www.bloomberg.com/news/2015-01-05/oilfield-writedowns-loom-as-market-collapse-guts-drilling-values.html
Iran says Saudi Arabia should move to curb oil price fall
http://mobile.reuters.com/article/idUSKBN0KB0HG20150102?irpc=932
Exclusive: Mexico's light crude, shunned for U.S. shale, sails east
http://mobile.reuters.com/article/idUSKBN0K908Y20141231?irpc=932
Saudis Seen Giving Asia Smaller Oil Discounts on Signs of Demand; Saudi Arabia will probably offer smaller discounts to ship crude to Asia amid speculation demand will increase after benchmark prices dropped almost 50 percent last year.... The world’s biggest oil exporter will announce February official selling prices to buyers in Asia in coming days, after offering its Arab Light grade at the biggest discount in at least 14 years the previous month. OPEC’s largest producer may narrow the discount, according to 12 of 15 traders and refiners in a Bloomberg News ..... http://www.bloomberg.com/news/2015-01-05/saudis-seen-giving-asia-smaller-oil-discounts-on-signs-of-demand.html
Oil Rout Proving Worse Than Latest Norges Bank Forecast
One month after tumbling petroleum prices forced the central bank of western Europe’s biggest crude producer to cut interest rates, Governor Oeystein Olsen said oil’s subsequent slide has been even worse than expected. “If oil prices stay at $55, at today’s level, then that’s clearly lower than what we based things on in our latest report,” Olsen said today in an interview after a speech in Oslo. “We will look at the development going forward now and come back with an evaluation of the oil price.....http://www.bloomberg.com/news/2015-01-05/oil-rout-proving-worse-than-latest-norges-bank-forecast.html
Canada’s Richest Grain Family Betting on Rebound in Oil; A decade after expanding its grain business during a slump in prices, the Richardson family of Winnipeg, one of the richest in Canada, is making a similar bet on oil. With crude futures collapsing to the lowest in five years, the Richardson’s Tundra Oil & Gas unit last month agreed to buy 550 wells in Manitoba, part of a $410 million divestiture of Canadian assets by EOG Resources Inc. (EOG) Tundra’s biggest purchase ever will boost its output this year by one-third to 32,000 barrels a day......http://www.bloomberg.com/news/2015-01-04/canada-s-richest-grain-family-betting-on-rebound-in-oil.html
From boom to bust in Australia's mining towns - BBC News; http://m.bbc.com/news/world-australia-30584123
Euro Weakens to 2006 Low on Greece as Stocks, Oil Decline
The euro weakened to an almost nine-year low as a debate on Greece’s membership of the currency union deepened a selloff driven by central-bank stimulus. Stocks fell with bonds, while oil slid to its lowest level since 2009. Europe’s shared currency declined 0.8 percent to $1.1905 at 7:21 a.m. in New York, after touching its weakest level since March 2006. Greek notes resumed losses after a rally on Jan. 2. The Stoxx Europe 600 Index lost 0.3 percent and Standard & Poor’s 500 Index futures los t..... http://www.bloomberg.com/news/2015-01-04/euro-extends-slide-as-japan-resumes-n-z-stocks-advance.html
'Grexit' Is Back: A Greek Exit From the Euro Raises Fears of Fiscal Contagion By Simon Kennedy Jan 5, 2015 9:59 PM GMT+0800; Mario Draghi’s July 2012 pledge to do “whatever it takes” to keep the euro intact has kept speculators at bay for almost three years. Bond yields fell from Dublin to Athens, giving governments room to cut budgets and start revamping their economies.
http://www.bloomberg.com/news/2015-01-05/greek-euro-exit-risk-revived-as-merkel-bluff-overlooks-contagion.html
S&P 500 Heads Toward 4-Day Drop as Energy Shares Slump With Oil By Michelle F. Davis and Callie Bost Jan 6, 2015 5:29 AM GMT+0800; Crude oil’s slide below $50 sent the Standard & Poor’s 500 Index (SPX) to its biggest drop since October, as selling spread from the energy industry amid concern that cuts in capital spending will hurt earnings.
3 Jan 2015: USD at 11-year highs makes commodities more expensive
Stronger Dollar Crushes Arabica-Coffee, Raw-Sugar Markets - Arabica Coffee for Delivery in March Fell 3.3% to $1.6105 a Pound By Alexandra Wexler Updated Jan. 2, 2015 3:43 p.m. ET
NEW YORK—A surging U.S. dollar weighed on the coffee and sugar markets on Friday, sending prices tumbling lower.... The WSJ Dollar Index, which tracks the greenback’s performance against 16 other currencies, jumped to an 11 ½ -year high on Friday. Dollar-denominated commodities become more expensive for buyers using other currencies when the greenback appreciates, which saps global demand.... The dollar’s rise to a near 10-year high against the Brazilian currency added to selling pressure for arabica coffee and sugar. Global production of both commodities is largely concentrated in Brazil, and the real’s weakness encouraged producers and exporters to sell their sugar and coffee abroad because they receive more back in their local currency for a crop sold abroad in U.S. dollars. http://www.wsj.com/articles/arabica-coffee-raw-sugar-start-2015-on-sour-note-1420211223
2 Jan 2015: Oil drops more, SWF vulture role?
source: Bloomberg.com 10.25pm Singapore
Oil Trades at 5 1/2-Year Low After Russia, Iraq Boost Supplies By Grant Smith Jan 2, 2015 8:50 PM GMT+0800 Oil fell to the lowest since mid-2009 amid growing supply from Russia and Iraq and signs of manufacturing weakness in Europe and China. Futures headed for a sixth weekly loss in New York and London. Oil supplies in Iraq and Russia surged to the highest level in decades in December, according to data from both countries’ governments. Euro-area factory output expanded less than initially estimated in December. A manufacturing gauge in China, the world’s second-largest oil consumer, fell to the weakest level in 18 months, government data showed yesterday.
http://www.bloomberg.com/news/2015-01-02/oil-trims-6th-weekly-decline-as-collapse-of-2014-seen-excessive.html
Euro Drops to 2010 Low as S&P 500 Futures, Dollar Advance By Richard Frost and Stephen Kirkland Jan 2, 2015 9:48 PM GMT+0800 The euro weakened to a 4 1/2-year low, while Spanish and Italian bonds rose amid speculation the European Central Bank will boost stimulus. Standard & Poor’s 500 Index futures signaled the gauge will rebound and the dollar gained http://www.bloomberg.com/news/2015-01-01/oil-advances-with-u-s-index-futures-as-australian-dollar-drops.html
Also, thanks to a reader for forwarding this article: Oil Prices: A True Black Swan or the Work of Vultures? by DR. KENT MOORS | published DECEMBER 18TH, 2014; First off, there were always indications on both the supply and demand side that matters were softening. Second, the OPEC non-decision on Thanksgiving to keep production levels unchanged was both predictable (from the Saudi perspective) and telegraphed in advance. Then, the orchestration of the talking heads commentary on the tube made the whole move “legitimate.”.... This is hardly something that emerged out of the blue. It’s also not the stuff of a true black swan.... Unless, of course, there is another motive at work and the black swan becomes a convenient cover. Instead, this is what is really happening when it comes to oil prices.... When it comes to oil we are in a new age of massive short plays and swaps. The coordination of these moves is staggering, creating an impact that is immediate. Especially if there is a segue to important policy makers.... All of which has triggered a new development. SWFs have now become a player in the market, shorting the very product responsible for the funds to begin with. In other words, some OPEC members are making money on both sides of the crude pricing curve.... Transacting the deals outside their own borders via SWFs, these countries are hedging the product in both directions. That means they are currently pushing the lower cost of crude forward by pairing shorts to actual oil consignments....
1 Jan 2015: Brent closed last year at $57.33
23 December 2014: OPEC pledges no production cuts, blames others for glut; China as emergency lender to Russia, Argentina, Venezuela.... OPEC is not driving prices, key concerns for 2015...
Saudis See Oil Recovery as U.A.E. Urges Non-OPEC Cuts By Mahmoud Habboush, Wael Mahdi and Anthony DiPaola Dec 22, 2014 7:35 PM GMT+0800; Saudi Arabia and the United Arab Emirates reiterated pledges to keep pumping the same amount of crude, blaming non-OPEC producers for the glut of oil that’s driven prices to the lowest in five years.... Suppliers from outside the Organization of Petroleum Exporting Countries should cut "irresponsible" output, U.A.E. Energy Minister Suhail Al Mazrouei said in Abu Dhabi yesterday. Even if non-OPEC producers were to offer cuts, OPEC probably wouldn’t follow suit, Saudi Oil Minister Ali Al-Naimi said. The two countries account for about 40 percent of OPEC supply.... http://www.bloomberg.com/news/2014-12-21/non-opec-producers-called-on-to-cut-oil-output-amid-oversupply.html
Ruble Swap Shows China Challenging IMF as Emergency Lender By Ye Xie Dec 23, 2014 12:06 PM GMT+0800; China is stepping up its role as the lender of last resort to some of the world’s most financially strapped countries.... Chinese officials signaled Saturday that they are willing to expand a $24 billion currency swap program to help Russia weather the worst economic crisis since the 1998 default. China has provided $2.3 billion in funds to Argentina since October as part of a currency swap, and last month it lent $4 billion to Venezuela, whose reserves cover just two years of debt payments.... By lending to nations shut out of overseas capital markets, Chinese President Xi Jinping is bolstering the country’s influence in the global economy and cutting into the International Monetary Fund’s status as the go-to financier for governments in financial distress. While the IMF tends to demand reforms aimed at stabilizing a country’s economy in exchange for loans, analysts speculate that China’s terms are more focused on securing its interests in the resource-rich countries...
http://www.bloomberg.com/news/2014-12-22/yuan-ruble-swap-shows-china-challenging-imf-as-emergency-lender.html
What’s Next for World Oil as Lower Prices Extend Into ‘15 By Isaac Arnsdorf Dec 23, 2014 1:00 PM GMT+0800; The oil price decline of 2014 upended the geopolitical chessboard. Worth watching in 2015 will be who can recover and dominate play -- OPEC, Vladimir Putin or U.S. shale drillers.
Oil’s international benchmark price dropped as much as 49 percent in 2014. Those looking for a quick rebound may be disappointed, as world consumption growth slowed to the least since 2009, U.S. companies pumped more than they have since the 1980s and a price war broke out among members of the Organization of Petroleum Exporting Countries.... “It’s a turning point in the way people perceive OPEC, that this so-called cartel is not really driving prices,” said Jeff Colgan, a professor at Brown University’s Watson Institute for International Studies who researches the geopolitics of energy. “The real story is going to be about the fracking industry. How much pain can North American producers take?” Here are five concerns about oil markets for 2015............
http://www.bloomberg.com/news/2014-12-23/what-s-next-for-world-oil-as-lower-prices-extend-into-15.html
Billionaire Shale Pioneer Cuts Spending 41% on Oil Crash By Bradley Olson and Joe Carroll Dec 23, 2014 8:38 AM GMT+0800; Billionaire Harold Hamm, whose early adoption of shale drilling in North Dakota helped usher in a U.S. energy renaissance, plans to cut spending by 41 percent at his company after the plunge in oil prices.... Continental Resources Inc. and other U.S. producers can adjust quickly to the crude collapse and will be able to withstand the downturn better than many producing countries, which face economic “ruin,” Hamm said in an interview.... “The oil and gas industry has lowered the cost of gasoline to consumers in this country,” Hamm, chairman and chief executive officer of Continental, said yesterday. “It’s been good for America, this increase in supplies that we have here. We don’t want to see it all go for naught.”....
http://www.bloomberg.com/news/2014-12-22/continental-resources-cuts-spending-41-on-plunging-oil-price.html
17 December 2014 (evening): Ruble troubles, Russia and OPEC to maintain supply, US talks exports, US cuts GDP link with oil, Petrobras cash crunch, Norway krone drops, palm oil drops with oil slide
Ruble Trouble by The 10-Point: My Guide to The WSJ, 17 Dec 2014; Russia’s beleaguered currency was volatile in early trading today after the country’s Finance Ministry announced plans to begin selling its excess foreign-exchange holdings. We report that the plunging ruble is reawakening fears of the kind of financial crisis Vladimir Putin has sought to leave behind. Moscow residents have rushed to buy big-ticket items and swapped rubles for dollars and euros, signaling a new feeling of vulnerability among Russians and a fresh challenge to their leader. We also find that global banks are curtailing the flow of cash to Russian entities, and the ruble’s selloff has deepened concerns for European companies exposed to the Russian market. A Pimco bond fund was also among the victims, after stumbling over a large bet on bonds issued by Russian corporations. Meanwhile, selling eased in Asia this morning after falling oil prices and worries about tighter U.S. monetary policy battered emerging markets earlier in the week. Investors are now looking to the U.S. Federal Reserve’s policy statement for cues.
Oil Trades Near 5-Year Low as Russia Echoes OPEC Output Policy By Heesu Lee and Rupert Rowling Dec 17, 2014 8:26 PM GMT+0800; Output from Russia, the world’s largest crude producer, will be similar to this year’s...Oil traded near a five-year low in New York as Russia reiterated that it will keep crude production steady next year, echoing OPEC’s strategy of refraining from curbing supply to tackle a global surplus.... Futures fell as much as 2.4 percent after sliding below $54 a barrel yesterday for the first time since May 2009. Output from Russia, the world’s largest crude producer, will be similar to this year’s 10.6 million barrels a day, according to Energy Minister Alexander Novak. Iran is said to be offering shipments to Asia at the deepest discount in at least 14 years, according to four people with knowledge of the decision. Iraq may revisit its oil-production plans, the country’s Deputy Prime Minister said today in London.... http://www.bloomberg.com/news/2014-12-17/oil-trades-near-5-year-low-as-russia-mirrors-opec-output-policy.html
U.S. Talking Oil Exports Just When World Needs It Least By Dan Murtaugh and Lynn Doan Dec 17, 2014 12:09 PM GMT+0800 ; The U.S. Congress is talking about allowing unfettered oil exports for the first time in almost four decades. Its timing couldn’t be worse.... There’s space in the global market for 1 million to 1.5 million barrels a day of U.S. crude if the ban vanishes, Energy Information Administration chief Adam Sieminski told a congressional subcommittee at a Dec. 11 hearing. That would be less than 2 percent of worldwide demand. With prices sliding amid a glut, the figure is bound to be even smaller, according to consultants including Wood Mackenzie Ltd...
http://www.bloomberg.com/news/2014-12-17/u-s-talking-oil-exports-just-when-world-needs-it-least.html
Bloomberg slideshow - America is Shaking off its Addiction to Oil: http://www.bloomberg.com/graphics/2014-america-shakes-off-oil-addiction/
Petrobras Said to Cut Exploration Spending in Cash Crunch By Sabrina Valle and Leonardo Silva Dec 17, 2014 12:44 AM GMT+0800 ; Petroleo Brasileiro SA (PETR4), the biggest oil producer in ultra-deep waters, is curbing refining and exploration spending in response to the collapse in prices and difficulties tapping debt markets during a corruption probe, said two people with direct knowledge of the matter.... The state-run oil company known as Petrobras plans to freeze investments in the Premium I and Premium II refineries in northeastern Brazil and sell assets to protect its cash position, said one of the people. The exploration cuts will focus on projects that are behind schedule, they said. Both asked not to be named because the information isn’t public.... http://www.bloomberg.com/news/2014-12-16/petrobras-said-to-cut-exploration-spending-in-cash-crunch.html
Oil Shocks Norway’s Krone as Swedish Currency Rises to Parity By Lucy Meakin Dec 17, 2014 12:33 AM GMT+0800; As the smaller economy of the two Nordic nations, Norwegians have long taken pride in their currency’s pre-eminence over the Swedish counterpart. Not to mention the cheap shopping across the border it has allowed.... That all came to an end today as the currency joined the Russian ruble in oil-induced tumble. The krone, likened to an emerging market currency, declined to parity with the Swedish krona for the first time since 2000.... http://www.bloomberg.com/news/2014-12-16/norway-s-krone-slides-to-parity-with-krona-as-oil-prices-plunge.html
Malaysian palm oil slides for 3rd-straight day on crude oil slide Wednesday, 17 December 2014
KUALA LUMPUR: Malaysian palm oil futures fell for a third day on Tuesday and slide to their weakest in nearly two weeks, as crude deepened its sharp drop and volatility in emerging Asian markets turned investors wary.... Brent crude fell as low as $59.02, its weakest level since May 2009, while U.S. crude was down $1.60 at $54.31 a barrel, extending a 6-month selloff as slowing Chinese factory activity and weakening emerging-market currencies added to concerns about demand.
Traders said while the palm market has been supported over the past weeks on hopes that weakening production will help shrink inventories, this week's turmoil across equity markets and steep losses in crude could trigger more selling... The benchmark March contract on the Bursa Malaysia Derivatives Exchange fell to a Dec. 3 low of 2,114 ringgit in afternoon trade, before settling down 2.4 percent at 2,120 ringgit ($608) per tonne by Tuesday's close...." http://www.thestar.com.my/Business/Business-News/2014/12/17/Palm-down-more-on-crude-oil-slide/?style=biz
17 December 2014 (morning): Brent below $60, Russia, US-China role reversal, Roubini's macro themes for 2015
source: Bloomberg.com, 17 Dec 2014, 9am Singapore
Note: At one point, yesterday evening, we note 3.5% fall for Brent on the day
Here's Why the Russian Ruble Is Collapsing; The Russian economy has been in trouble for months, but last night, things got absurdly bad. The value of the ruble dropped as much as 19 percent in the last 24 hours, the worst single-day drop for the ruble in 16 years. Now Russians are reportedly bum-rushing malls to swap cash for washing machines, TVs, or laptops—anything that seems as if it might hold value better than paper money, whose worth is evaporating in real time. The political and economic forces sending Russia into a downward spiral are complex. Here's what you need to know.
Russia's economy has been hurt by two big things: the falling price of oil and economic sanctions. (Remember Crimea?) The oil and gas industry generates about half of Russia's revenue, so when a combination of the shale boom in the U.S. and weaker demand worldwide pushed the price from $110 per barrel earlier this year to $60, Russia got hammered. The sanctions imposed by Europe and the U.S., designed to punish Russia's companies for President Vladimir Putin's actions in Ukraine, have hurt, too. http://www.businessweek.com/articles/2014-12-16/no-caviar-is-not-getting-cheaper-everything-you-need-to-know-about-the-russian-ruble-collapse?campaign_id=DN121614
U.S.-China Economic Role Reversal Roils Emerging Markets By Simon Kennedy Dec 17, 2014 1:44 AM GMT+0800; The world economy’s two biggest tectonic plates are shifting, setting off the frictions increasingly evident in financial markets and global capitals.... The U.S. is accelerating and China is cooling, marking a reversal of trends that followed the financial crisis. As a result, oil is slumping as American supply rises and Chinese demand falls; capital is fleeing emerging markets; the dollar is surging and the influence of the BRICs is on the wane... http://www.bloomberg.com/news/2014-12-16/economic-tensions-roil-emerging-markets-as-u-s-china-switch.html
Asia Isn't Ready for a China Crash by William Pesek Dec 16, 2014 8:00 PM EST; "As China's first full year of rebalancing draws to close, how has President Xi Jinping done? Reasonably well, it seems. Growth appears to be moderating gently, stocks continue to soar and most economists still foresee a soft landing rather than market-shaking meltdown for the world’s second-largest economy.
Next year, however, Xi's team will have to get to the hard stuff: taming an opaque, unwieldy financial system. My question isn’t so much whether China will or won’t crash. It’s whether the rest of Asia is ready for the possibility of 5 percent or even 4 percent Chinese growth, as predicted by pundits like Larry Summers and Marc Faber. It’s almost certainly not.... Historically, hedge funds betting against China haven't done very well. This week, in fact, the government is expected to revise 2013 GDP figures upward by as much as $275 billion, which on paper should help meet its target of 7.5 percent growth for the year.... For anyone who thinks China is operating even close to that number, though, I have two words: iron ore. Even more than the precipitous drop in oil, the halving of prices for these pivotal rocks and minerals -- as well as a 44 percent plunge in oil and tumble in coal and other commodities -- suggests that China may be braking rapidly.... http://www.bloombergview.com/articles/2014-12-17/asia-needs-to-prepare-better-for-possible-china-slowdown
The Year Ahead: Roubini's Top 10 Macro Themes; We recently laid out the top 10 themes that we believe will define the global economy in 2015, exploring how possible scenarios will unfold and the potential risks to our baseline views. Key themes to watch for include:
1.Global Growth Is Battered and Bruised, but Unbroken (Thanks to the U.S.)
2.China Is Slowing Far Faster Than Consensus and Heading for a Bumpy Landing
3.Europe Faces a Challenging Year, With Politics a Key Risk
4.Oil (and Commodity) Glut: Oil Weak, Metals Worse—Producers Hit, but Good for Growth and Inflation
5.DM Inflation: 'Still No Bark' as Disinflation Reigns
6....
16 December 2014: UAE sees OPEC output hold even at $40. Commodity contagion, currencies and emerging markets hit in echoes of 1998 crisis? Petrobras scandal, deals and capex cuts in the oil rout.
source: Bloomberg.com on 16 Dec 2014, 1015am, Singapore
Bloomberg - U.A.E. Sees OPEC Output Unchanged Even If Oil Drops to $40 http://bloom.bg/1BKaXtW
Bloomberg - Oil Storm Has Texas Wildcat Veterans Warning Bakken Rookies to Take Cover http://bloom.bg/16nxvDY
Russian Central Bank Raises Key Rate to 17% from 10.5%; Russia's Central Bank, in a bid to stem a sharp decline in the ruble, raised its key interest rate to 17% from 10.5%. Earlier Monday, Russia's currency lost more than one-tenth of its value, collapsing to a record low and raising fears that the Kremlin wouldn't be able to stop the slide as the price for oil, its main export, also continued to fall.
http://www.wsj.com/articles/russias-central-bank-raises-key-rate-to-17-1418682581?mod=djemalertMARKET
Bloomberg - 1998 Comes Calling in Currency and Credit Plunges From Russia to Venezuela http://bloom.bg/1zXlVu6
Bloomberg - Rupiah at ’98 Low Defies Logic for Best Forecaster: Asean Credit http://bloom.bg/16oTc6t
Petrobras- Coming down with a bump, More problems are revealed at Brazil's oil giant; Dec 14th 2014 | SÃO PAULO | Business and finance; "NOT long ago Petrobras was the pride of Brazil. It was steward of the biggest offshore oil discovery so far this century and the subject of a record-breaking $70-billion public share offering in 2010. It had become the technological leader among oil giants at finding new reserves. But now the state-controlled behemoth is sinking into a hole as fathomless as its deep-sea oil wells. Every day brings news that ranges from bad to dreadful, much of it the result of a 10 billion reais ($3.7 billion) bribery scheme that was recently unearthed by Brazil’s federal police, aided by the press...." http://www.economist.com/news/business-and-finance/21636420-more-problems-are-being-revealed-brazils-oil-giant-coming-down-bump
Repsol Readies Bid for Talisman Energy; Repsol is preparing an $8.3 billion bid for Canada's struggling Talisman Energy, a takeover that would roughly double the Spanish company's oil output right away and boost its potential for further expansion. The Madrid company's board met Monday evening and unanimously approved the offer, which has an enterprise value of $13 billion including debt. Repsol said it was preparing to offer $8 a share for Talisman, a significant premium over the Calgary-based company's closing price Friday. http://www.wsj.com/articles/talisman-confirms-repsol-talks-1418656109?mod=djemalertDEALS
Share price chart comparison for Exxon, Petrobras, SembCorp Marine (among other things selling oil rigs to Petrobras and others), and Sapura Kencana (key Malaysia oil & gas sector services provider, a sector now facing capex cuts by Petronas)
source: Bloomberg.com on 16 Dec 2014, 1015am, Singapore
note: Start date of chart is in May 2012. 30 October 2014 is marked, being approximate date of Khor Reports' last review of these relative equity prices
13 December 2014: Brent $61.85 shakes equity and credit markets. Shale oil's market disruptive effect and 1930s history
Brent at $61.85. From scanning Bloomberg news on this you can see demand destruction worries hitting equities, bond market shifting to safety, China stockpiles expected as many.VLCCs head it's way and chartists seeking a bottom as the price plunge breaches many indicators. Demand forecasts were also cut. ouch.
The Relentless Production of Shale Oil Is Breaking OPEC’s Neck By Peter Coy and Matthew Philips December 11, 2014; "The world’s biggest oil companies faced ruin in the summer of 1931. Crude prices had plummeted. Wildcatters were selling oil from the bonanza East Texas field for a nickel a barrel, cheaper than a bowl of chili. On Aug. 17, Governor Ross Sterling declared a state of insurrection in four counties and sent 1,100 National Guard troops to shut down the fields and bring order to the market. A month later the Railroad Commission of Texas handed out strict production quotas.... That heavy-handed intervention in the free market was remarkable enough. Even more remarkable was who pulled it off. The person in charge of shutting down the wildcatters, National Guard Brigadier General Jacob Wolters, was the general counsel of Texas Co., an ancestor of Chevron (CVX). And the Texas governor who ordered Wolters in was a past president of Humble Oil and Refining, a forerunner of ExxonMobil (XOM). Big Oil played hardball in those days.... History is repeating itself, with a twist. The stressed-out giants of today are Saudi Arabia and its fellows in the Organization of the Petroleum Exporting Countries. The descendants of the 1930s wildcatters are today’s producers of oil from shale, who are driving down the world price of crude by flooding the market with millions of barrels of new oil each day...."
http://www.businessweek.com/articles/2014-12-11/shale-oils-relentless-production-is-breaking-opecs-neck?campaign_id=DN121214
12 December 2014: In a parallel to the oil & gas market share grab, iron ore biggies raise output to shutter less competitive miners?
Roubini Global Sees Sub-$60 Iron Ore Amid Massive Surplus By Jasmine Ng Dec 11, 2014 8:03 PM GMT+0800; "Iron ore may drop to less than $60 a metric ton next year as the largest mining companies press on with raising supply, deepening a glut just as demand growth in China falters, according to Roubini Global Economics LLC.... The commodity will average $65 a ton in 2015, with weaker prices in the first half before a recovery as some higher-cost capacity is closed, Director of Commodities Helen Henton said in an interview. While producers won’t fare well in an environment of falling prices, it does make sense for low-cost suppliers to keep expanding in the expectation that less-competitive mines will be shuttered.... The biggest producers including BHP Billiton Ltd. (BHP), Rio Tinto Group and Vale SA invested billions of dollars to increase output, pushing the market into oversupply and spurring a 48 percent tumble in prices this year. A slowing Chinese economy may reduce consumption growth in iron ore, used to make steel for buildings and appliances. The raw material will extend losses as supply growth outpaces demand, according to JPMorgan Chase & Co., which this week cut forecasts through 2017..." http://www.bloomberg.com/news/2014-12-10/roubini-global-sees-iron-ore-sinking-to-less-than-60-on-surplus.html
11 December 2014: Oil plunge contagion and banks trading revenue? Investors seeking bottom. Biodiesel demand worry.
source: Bloomberg.com 10.26am Singapore time
U.S. Getting Rid of Oil Addiction as Price Plummets in Glut By Lynn Doan and Dan Murtaugh Dec 11, 2014 8:18 PM GMT+0800 ; "The U.S. is producing the most oil in 31 years, economic growth is picking up and crude prices are plunging. So why is Americans’ use of petroleum waning? As the U.S. moves closer and closer to energy independence, greater fuel efficiency, changing demographics and an increase in renewables are altering the dynamic that in the past would have seen demand for gasoline climbing. Gross domestic product, the value of all goods and services produced in the U.S., grew at a 2.4 percent pace in the third quarter from the year-earlier period. Oil consumption fell 0.3 percent, government data show... “Oil demand and GDP growth used to go hand in hand,” Christopher Knittel, a professor of applied economics at Massachusetts Institute of Technology’s Sloan School of Management, said by phone on Dec. 8 from Cambridge, Massachusetts. “Now, they’re in some ways almost independent of each other because of investments in fuel economy that tended to break the link.” ... http://www.bloomberg.com/news/2014-12-11/america-getting-rid-of-oil-addiction-as-price-plummets-amid-glut.html
Bloomberg - Oil Plunge Rips Through Markets as Investors Seek Bottom http://bloom.bg/1x3K4zt
Bloomberg - JPMorgan Sees ‘High Teens’ Decline in Trading Revenue http://bloom.bg/1ulzKgg
CIMB - Plantation update (MPOB stats for Nov) - Biodiesel demand risk; released today this notes that "we are concerned about biodiesel demand risk due to the sharp fall in crude oil prices, which makes biodiesel conversion uneconomical"
Roubini Global Economics Forecasts China’s 2016 Growth at 5.4%; 10 Dec 2014; Following the recent release of a two-part China Trip Report by Dr. Nouriel Roubini, Don Hanna (Managing Director, Asia) and Daili Wang (Senior Economist) comes our latest China Outlook, in which we have further revised down our 2016 growth forecast for the economy to 5.4%. Lower investment (especially in residential construction), weakening domestic demand and the implementation of economic reforms will be key headwinds in the coming years, with the resulting friction taking a toll on GDP growth, Chinese equities and commodity prices.
Oil Prices Fall as U.S. Inventories Show Surprise Gain; 10 Dec 2014; Oil prices took another dive Wednesday on a U.S. government report showing a surprise increase in the country's crude stockpiles. The weekly reading on U.S. oil supplies signals a potential deepening of a global glut that has sent crude-oil prices plunging more than 40% in nearly six months. The benchmark U.S. oil price recently was 4% lower at $61.22 a barrel on the New York Mercantile Exchange. U.S. crude supplies rose by 1.5 million barrels in the week ended Dec. 5, according to the U.S. Energy Information Administration. Analysts expected supplies to fall by 2.7 million barrels.
http://www.wsj.com/articles/crude-oil-prices-continue-to-fall-on-tepid-demand-ample-supply-1418209538?mod=djemalertMARKET
Yesterday, before last night's rout:
(BN) Energy Insiders See ‘Fire Sale,’ Buy Most Shares Since 2012; The rout in energy stocks reminds Tim Rochford of something else he’s seen in Texas. “What happened is almost like a herd of cattle, one cow turns left, all the cows follow it and it’s a stampede,” said the 68-year-old co-founder of Midland-based Ring Energy Inc., one of 118 industry executives who bought shares of their own companies in the last month amid the worst losses since 2008. “This is an absolute fire sale,” he said. “It’s an overreaction and the result is it’s oversold.” ... http://www.bloomberg.com/news/2014-12-08/energy-insiders-see-fire-sale-buy-most-shares-since-12.html
(BN) Oil’s Slump Puts Canada Acquisitions Streak on Ice; The rapid decline in global oil prices is setting the stage for a long dance between buyers and sellers in Canada’s energy industry.
The rout put a chill on an oil and gas acquisition market that saw about $39 billion of deals this year and is leading sellers like Penn West Petroleum Ltd. (PWT) to consider waiting for a rebound. Highly indebted Canadian oil and natural gas producers may not be able to afford that luxury, and suiters such as Crescent Point Energy Corp. (CPG) Chief Executive Off ... http://www.bloomberg.com/news/2014-12-08/oil-s-slump-puts-canada-aquistions-streak-on-ice.html
Oil Drop Pressures Crude-Producing Countries, Energy Firms - Oil Prices Extend Losses, Hitting Five-Year Lows By Nicole Friedman; Oil prices dropped sharply Monday to fresh five-year lows, putting additional pressure on countries that rely on oil revenue and on energy companies that are trying to calibrate their investment plans.
http://www.wsj.com/articles/oil-drop-pressures-crude-producing-countries-energy-firms-1418065427?mobile=y&mg=reno64-wsj
From The Economist: The new economics of oil: Sheikhs v shale; The economics of oil have changed. Some businesses will go bust, but the market will be healthier; Dec 6th 2014 | From the print edition; "THE official charter of OPEC states that the group’s goal is “the stabilisation of prices in international oil markets”. It has not been doing a very good job. In June the price of a barrel of oil, then almost $115, began to slide; it now stands close to $70. This near-40% plunge is thanks partly to the sluggish world economy, which is consuming less oil than markets had anticipated, and partly to OPEC itself, which has produced more than markets expected. But the main culprits are the oilmen of North Dakota and Texas. Over the past four years, as the price hovered around $110 a barrel, they have set about extracting oil from shale formations previously considered unviable. Their manic drilling—they have completed perhaps 20,000 new wells since 2010, more than ten times Saudi Arabia’s tally—has boosted America’s oil production by a third, to nearly 9m barrels a day (b/d). That is just 1m b/d short of Saudi Arabia’s output. The contest between the shalemen and the sheikhs has tipped the world from a shortage of oil to a surplus...." http://www.economist.com/news/leaders/21635472-economics-oil-have-changed-some-businesses-will-go-bust-market-will-be
8 December 2014: Lower oil prices to boost global growth: Oil investors to lose trillions? US drillers argue for exports.
Many of the world’s top policy makers are betting that plummeting oil prices will lead to a boost in global growth. Our story looks at why prices are dipping and how they will affect the world economy. Falling energy prices are clearly hurting major oil exporters that rely heavily on petroleum revenues. But for major oil importers such as Japan, Italy and Germany, the International Monetary Fund calculates that the price plunge since June could add nearly a percentage point of gross domestic product to their economies. “There will be winners and losers, but on a net-net basis, it’s good news for the global economy,” IMF Managing Director Christine Lagarde told me at the Journal’s CEO Council annual meeting last week. Whether the recent tumble is driven more by a supply glut or a drop in demand could determine the direction of the global economy in the coming year, we note. But while much of the world will benefit from cheaper oil, there is also the risk of a negative shock—as producers’ problems could spill over into financial instability. And revised figures overnight from Japan that showed a sharper drop in output in the third quarter than previously reported underscore the depth of the hole in which some countries find themselves before they see the benefits of lower oil costs..... Falling Oil Prices Spur New Bets on Global Economic Growth - Policy Makers Shrug Off Concerns That Tumbling Oil Costs Are Harbinger of Slowdown By Ian Talley;
http://www.wsj.com/articles/falling-oil-prices-spur-new-bets-on-global-economic-growth-1418001937?mod=djem10point
Bloomberg - Oil Investors at Brink of Losing Trillions of Dollars in Assets. Gore: It's That Road Runner Moment http://bloom.bg/1yzJtn6
Bloomberg - Oil Drop Gives U.S. Drillers Argument to End Export Ban http://bloom.bg/1ykazfs
5 December 2014: price war, US shale boom, sub-$50 at well head
Oil Speculators (Mostly) Saw the Massive Price Drop Coming By Matthew Philips December 03, 2014; "Since June, speculators have dumped the equivalent of 500 million barrels of oil onto the futures market. Among other consequences, they are now insufferable at dinner parties... The drop in oil prices has been stunning, with both U.S. and international crude pushing a 40 percent decline since June. Attention so far has been on supply and demand getting out of whack: The world has more oil than it actually needs, with various estimates of the surplus falling anywhere from 700,000 to more than 1 million barrels of daily production.... The U.S. is mostly to blame. The shale boom has poured an extra 4 million barrels of oil into the world since 2008. That helped the market weather chaos elsewhere, keeping oil prices remarkably flat. But the trend has been clear for a while now, and plenty of smart analysts have been talking for more than a year about the potential for much lower prices...." http://www.businessweek.com/articles/2014-12-03/oil-speculators-mostly-saw-the-massive-price-drop-coming?campaign_id=DN120314
Brent Drops From 4-Year Low as Saudi Discounts Deepen Price War By Ben Sharples Dec 5, 2014 10:22 AM GMT+0800; "Brent extended losses from a four-year low as Saudi Arabia offered customers in Asia record discounts on its crude, bolstering speculation it’s defending market share. West Texas Intermediate dropped in New York.... Futures fell as much as 0.7 percent in London and are headed for a second weekly decline. State-run Saudi Arabian Oil Co. cut its differential for Arab Light sales to Asia next month to $2 a barrel below a regional benchmark, according to a company statement. That’s the lowest in at least 14 years. The kingdom doesn’t want to subsidize Iran, Iraq and Venezuela and is willing to let the market decide prices, said Daniel Yergin, an energy analyst and Pulitzer Prize-winning author... Crude slumped 18 percent last month as the Organization of Petroleum Exporting Countries maintained its output quota, letting prices decrease to a level that may slow U.S. production. Saudi Arabia has no price target and will let the market decide at what level oil should trade for now, said a person familiar with its policy... “It seems what the Saudis want, the Saudis are going to get,” Phil Flynn, a senior market analyst at Price Futures Group in Chicago, said by e-mail today. “We’re going to see prices continue to be under pressure. It is still game on.”
http://www.bloomberg.com/news/2014-12-05/wti-trades-near-5-year-low-as-saudi-discount-deepens-price-war.html
Sub-$50 Oil Surfaces in North Dakota Amid Regional Discounts By Dan Murtaugh Dec 4, 2014 11:26 PM GMT+0800; "Oil market analysts are debating if oil will fall to $50. In North Dakota, prices are already there. Crude sold at the wellhead in the Bakken shale region in North Dakota fell to $49.69 a barrel on Nov. 28, according to the marketing arm of Plains All American (PAA) Pipeline LP. That’s down 47 percent from this year’s peak in June, and 29 percent less than the $70.15 paid for Brent, the global benchmark.... The cheaper price for North Dakota crude underscores how geographic and logistical hurdles can amplify the stress that plunging futures prices have put on drillers in new shale plays that have helped push U.S. oil production to the highest level in 31 years. Other booming areas such as the Niobrara in Colorado and the Permian in Texas have also seen large discounts to Brent and U.S. benchmark West Texas Intermediate.... “You have gathering fees, trucking, terminaling, pipeline and rail fees,” Andy Lipow, president of Lipow Oil Associates LLC in Houston, said Dec. 2. “If you’re selling at the wellhead, you’re getting a very low number relative to WTI.” ..... https://www.bloomberg.com/news/2014-12-03/sub-50-oil-surfaces-in-north-dakota-as-regional-discounts-swell.html
20 November 2014: Palm oil price - Brent crude and Indonesia biodiesel mandate outlook
Palm hits 5 week low as crude drops, biggest weekly drop in 3 Friday, 28 November 2014 18:22 Posted by Shoaib-ur-Rehman Siddiqui KUALA LUMPUR: Malaysian palm oil futures fell to their lowest in more than five weeks on Friday and recorded their biggest weekly drop in three, dragged down by steep losses in crude oil after OPEC decided against curbing output. Malaysian palm prices may drop to 1,740 ringgit a tonne next year if Brent crude slides to $60 a barrel, industry analyst James Fry warned at a palm oil industry meet in Indonesia on Friday... Additionally, any recovery in palm futures over the next year will hinge on Indonesia's biodiesel mandate, vegetable oil analyst Dorab Mistry said in the same palm oil meet.... Looking ahead, palm prices are expected to average 2,200-2,500 ringgit per tonne from now until June, said a senior official from Malaysia's Sime Darby Bhd , the world's top oil palm planter by land size. Copyright Reuters, 2014
http://www.brecorder.com/markets/commodities/asia/207554-palm-hits-5-week-low-as-crude-drops-biggest-weekly-drop-in-3.html
Indonesia’s ‘Toothless Mandate’ for Biofuel Hurting Palm By Ranjeetha Pakiam and Yoga Rusmana Nov 28, 2014 7:31 PM GMT+0800 Biodiesel policies in Indonesia will determine the direction of palm oil prices in the next 12 months as output climbs to a record in the biggest producer, according to Dorab Mistry, director at Godrej International Ltd. The government should impose financial penalties for non-compliance with its mandate, Mistry said in remarks prepared for a conference in Bandung today. Failure to enforce the rules will mean that palm will continue to trade between 2,200 ringgit ($652) a metric ton and 2,300 ringgit, he said.... http://www.bloomberg.com/news/2014-11-28/indonesia-s-toothless-mandate-for-biofuel-seen-hurting-palm.html
28 November 2014: OPEC keeps production up and oil prices drop
OPEC Fails to Take Action to Ease Glut as Crude Plunges By Wael Mahdi, Golnar Motevalli and Grant Smith Nov 28, 2014 7:00 AM GMT+0800; "OPEC took no action to ease a global oil-supply glut, resisting calls from Venezuela that the group needs to stem the rout in prices. Futures slumped the most in more than three years... The group maintained its collective production ceiling of 30 million barrels a day, Ali Al-Naimi, Saudi Arabia’s oil minister, said yesterday after the 12 nations met in Vienna. Brent crude dropped as much as 8.4 percent in London, extending this year’s decline to 34 percent...." http://www.bloomberg.com/news/2014-11-27/opec-leaves-output-ceiling-unchanged-at-30-million-barrels.html
source: Bloomberg.com, accessed 7.30am Bandung time
At GAPKI's Bandung conference this afternoon, Dr James Fry of LMC International (yes, where I work) will be talking about the energy sector prices in relation to palm oil prices. Energy sector cost of production indicators will also be referred to. That will be worth checking out.
17 November 2014: OPEC's most difficult meeting this century and Halliburton-Baker Hughes deal
The 10-Point: My Guide to The WSJ, 17 November 2014 - A Cartel Divided: As oil prices fall further, the Organization of the Petroleum Exporting Countries knows it must cut production. But it isn’t clear whether its members will agree. Our story examines oil-market dynamics and the issues that underlie the commodity’s recent fall. We find that, according to officials and executives, Saudi Arabia doubts that other OPEC members would live up to a collective commitment to cut output. While such a move could boost prices, we note that it would also rob members of revenue. It’s unclear how long vulnerable OPEC economies could afford to limit production. Meanwhile, failure to broker a deal could weaken the group’s already-subsiding influence over global prices. OPEC members are expected to meet in Vienna later this month. “The upcoming OPEC meeting is going to be the most difficult one during this century,” said a former senior adviser to Ali al-Naimi, the Saudi oil minister. http://tk.wsjemail.com/track?type=click&enid=ZWFzPTImbXNpZD0xJmF1aWQ9Jm1haWxpbmdpZD01NTYyMzMzJm1lc3NhZ2VpZD04Njg5MDAmZGF0YWJhc2VpZD02ODIwMDAmc2VyaWFsPTMzODE5MzY2JmVtYWlsaWQ9eXVsZW5na0BnbWFpbC5jb20mdXNlcmlkPXl1bGVuZ2tAZ21haWwuY29tJnRhcmdldGlkPSZmbD0mZXh0cmE9TXVsdGl2YXJpYXRlSWQ9JiYm&&&960042&&&http://online.wsj.com/articles/falling-oil-prices-test-opec-unity-1416188605?mod=djem10point
Big Oil Deals Return as Halliburton Moves First By Brooke Sutherland Nov 17, 2014 8:50 PM GMT+0800; "Halliburton Co. (HAL)’s deal for Baker Hughes Inc. (BHI) may be just the start of big energy takeovers as oil prices slump... Crude has plunged to a more than four-year low amid a U.S. supply glut. That’s making top energy companies, from equipment makers to oil explorers, cheaper for buyers that have the capital to survive and the confidence to strike. Halliburton, a $47 billion provider of oilfield services and equipment, approached Baker Hughes about a combination several weeks ago, a time when the target was trading near its cheapest price in more than a year. The forces that drove them together will likely spur on other dealmaking as well...."
http://www.bloomberg.com/news/2014-11-16/big-oil-deals-return-as-halliburton-moves-first-real-m-a.html
What Does $75 Oil Mean to the Solar Industry? Nov. 14 (Bloomberg) -- SolarCity Co-Founder and CEO Lyndon Rive discusses the impact of lower oil prices on the solar energy industry. He speaks with Erik Schatzer from the Bloomberg The Year Ahead: 2015 summit in Washington. (Source: Bloomberg)
http://www.bloomberg.com/video/what-does-75-oil-mean-to-the-solar-industry-T_WMcdlqQfqstlLd2E6oxw.html
13 November 2014: Brent recently dips below $80
Brent Falls Below $80 For First Time in 4 Years on Glut By Mark Shenk Nov 13, 2014 3:38 AM GMT+0800; "Brent crude, used to price more than half the world’s oil, fell below $80 a barrel for the first time in four years amid speculation OPEC will refrain from removing a surplus triggered by booming U.S. shale output... Futures dropped as much as 2.2 percent. Brent last traded below $80 on Sept. 29, 2010. The Organization of Petroleum Exporting Countries won’t cut its collective output when it meets in Vienna this month, according to Kuwait Oil Minister Ali Al-Omair... Oil plunged into a bear market last month, the result of a surge in shale drilling that has lifted U.S. production to a three-decade high as well as slowing growth in global demand. OPEC members Saudi Arabia and Kuwait have resisted calls to cut output while Libya, Venezuela and Ecuador have asked for action to prevent even lower prices...."
http://www.bloomberg.com/news/
4 November 2014: US oil production eyes $70 oil?
How Low Can They Go? Further declines in oil prices in the U.S. seem to be in the cards. Our story looks at the move by Saudi Arabia to unexpectedly cut prices for crude sold to the U.S., adding to pressure on American energy producers. We note that the decision increases concerns about the resilience of the U.S. oil industry, which has expanded rapidly in recent years. Some traders interpreted the Saudi action as taking aim at U.S. shale-oil production rather than being driven by supply and demand. However, an industry official said that it wasn’t a decision to undercut shale production, but rather an incentive for refiners in the U.S. to get higher margins by buying more Saudi crude. Nonetheless, most analysts expect U.S. oil production to keep increasing unless prices fall below about $70 a barrel. http://tk.wsjemail.com/track?type=click&enid=ZWFzPTEmbXNpZD0xJmF1aWQ9Jm1haWxpbmdpZD01NTM5MDMyJm1lc3NhZ2VpZD04Njg5MDAmZGF0YWJhc2VpZD02ODIwMDAmc2VyaWFsPTE2OTU3NDY4JmVtYWlsaWQ9eXVsZW5na0BnbWFpbC5jb20mdXNlcmlkPXl1bGVuZ2tAZ21haWwuY29tJnRhcmdldGlkPSZmbD0mZXh0cmE9TXVsdGl2YXJpYXRlSWQ9JiYm&&&1452400153652&&&http://online.wsj.com/articles/saudi-oil-price-cut-upends-market-1415063053?mod=djem10point
31 October 2014: OPEC members raising output, shale and changes in oil trade routes
Khor Reports comment: There's a lot of discussion in the agro-commodity space about oil prices as prices of commodities, especially palm oil have become quite linked to oil price as agricultural crops are key feedstocks in biofuels. 16% of palm oil is used in biodiesel now. So, putting back on a rather dusty equity analyst hat, we pulled together a share price chart comparison for Exxon, Petrobras, SembCorp Marine [1] (among other things selling oil rigs to Petrobras and others), and Sapura Kencana (key Malaysia oil & gas sector services provider) below. The correction in Petrobras share price is particularly big and SembCorp Marine (alongside Keppel Corp) was among significant providers of oil rigs for offshore oil & gas, and also corrected. Exxon has done better, but another oil & gas services company in Malaysia (with Petronas pushing for domestic oil & gas reserves increases via development of marginal fields) had huge share price gain and a recent correction. Oil & gas services and equipment companies are considered a leveraged play on oil & gas prices.
source: Bloomberg.com
[1] Singapore government-linked corporation with key utilities and marine services businesses.
In the latter: "Offers a full spectrum of integrated solutions from ship repair, ship conversion, rig building and repair to offshore engineering and construction" with FY2013 Group net profit mix (excluding Corporate) of 39% or S$337m.
In the latter: "Offers a full spectrum of integrated solutions from ship repair, ship conversion, rig building and repair to offshore engineering and construction" with FY2013 Group net profit mix (excluding Corporate) of 39% or S$337m.
OPEC Boosts Oil Output as Prices Slide to Four-Year Low 31 Oct 2014; http://www.bloomberg.com/news/2014-10-30/opec-boosts-oil-output-as-prices-slide-to-four-year-low.html; "Brent crude for December settlement slipped 88 cents, or 1 percent, to $86.24 a barrel on the London-based ICE Futures Europe... OPEC nations lifted output as Brent crude ... survey of oil ...Production by the 12-member Organization of Petroleum Exporting Countries climbed by 53,000 barrels a day to 30.974 million, led by gains in Iraq, Saudi Arabia and Libya, according to the survey of oil companies, producers and analysts. Last month’s total was revised 14,000 barrels a day lower to 30.921 million because of changes to the Iraqi, Kuwaiti, Nigerian and Qatari estimates.
OPEC nations lifted output as Brent crude dropped to a four-year low amid ample global supplies and sluggish demand. The group’s biggest producers, Saudi Arabia, Iraq, Iran and Kuwait, have cut their official selling prices, sparking speculation they will compete for market share rather than trim output. Ministers will gather next month to discuss the group’s production target...."
Shale Boom Redraws Oil Routes as Alaskans Ship to Korea 31 Oct 2014; http://www.bloomberg.com/news/2014-10-30/shale-boom-redraws-oil-routes-as-alaskans-ship-to-korea.html; "The U.S. Commerce Department in June opened the door to more U.S. oil ... U.S. West refineries, traditional buyers of Alaskan oil ... of benchmark crudes ... The bank cut forecasts for Brent ... State-owned Saudi Arabian Oil ..."
Why Oil Prices Went Down So Far So Fast 30 Oct 2014; http://www.bloomberg.com/news/2014-10-29/why-oil-prices-went-down-so-far-so-fast.html; "Break-Even Points for U.S. Shale Oil Brent crude ... Brent crude ... The Paris-based International Energy Agency predicted world oil ... On Oct. 1, Saudi Arabia lowered prices on its crude ... The plunge does not accurately reflect the balance between oil ...The reasons oil prices started sliding in June were hiding in plain sight: growth in U.S. production, sputtering demand from Europe and China, Mideast violence that threatened to disrupt supplies and never did.... After three-and-a-half months of slow decline, the tipping point for a steeper drop came on Oct. 1, said Ray Carbone, president of broker Paramount Options Inc. That’s when Saudi Arabia cut prices for its biggest customers. The move signaled that the world’s largest exporter would rather defend its market share than prop up prices...."
More here: http://www.bloomberg.com/energy/
15 October 2014: It's fallen from $105-110 range to $85 now
U.S. Oil Producers May Drill Themselves Into Oblivion By Matthew Philips, October 13, 2014; "Remember the fall of 2008? As the world spun out of control and the price of everything crashed, a barrel of oil lost 70 percent of its value over about five months. Of course, prices never should’ve been as high as $146 that summer, but they shouldn’t have crashed to $40 by the end of that year either.... As the oil market has recovered, there have since been three major corrections, when prices have fallen at least 15 percent over a few months. We’re now in the midst of a fourth, with oil prices down more than 20 percent since peaking in late June at around $115 a barrel. They’re now hovering in the mid-$80 range and could certainly go lower. That’s good news for U.S. consumers, who are finally starting to reap the rewards of the shale boom through low gasoline prices. But it could spell serious trouble for a lot of oil producers, many of whom are laden with debt and exaggerating their oil reserves.... In a way, oil companies in the U.S. are perpetuating the crash by continuing to drill and push up U.S. oil production to its fastest pace ever. Rather than pulling back in hopes of slowing the amount of supply on the market to try and boost prices, drillers are instead operating at full tilt and pumping oil as fast as they can. Just look at the number of horizontal rigs in the field...One final note of caution: The U.S. natural gas industry ran through this same cycle a few years ago with companies getting themselves into trouble by flooding the market with gas, crashing the price and themselves in the process. By mid-2012, the price of natural gas got too cheap to drill. The number of natural gas rigs in the field still isn’t anywhere close to returning to where it was a few years ago...." http://www.businessweek.com/articles/2014-10-13/u-dot-s-dot-oil-prices-are-dropping-but-drilling-is-more-expensive?campaign_id=DN101414
Oil Oversupply Highlights Discord within OPEC, Wednesday, 15 October 2014; "Oversupply, slowing demand, a strong US dollar, and OPEC discord as to what to do about these factors are culminating in sliding oil prices. Wealthy Gulf states, including Saudi Arabia, will likely push to maintain current output and oil prices will continue to slide....The price of oil is at a multi-year low. A trio of factors, oversupply (Libya has restored production, and the US has cut a third of their oil imports), a strong US dollar and a slowdown in demand, particularly from South and East Asia, has seen the price of oil slump......Iraq and Iran will lead the push to reduce production and raise the oil price closer to a benchmarked $100 a barrel. After years of sanctions, Iran’s economy is fragile. The country requires US$130 (US$140 by some estimates) a barrel to profit, compared to the UAE at US$70, and Saudi Arabia at US$90, making any further reduction unacceptable. Budget balancing will also be on Iraq’s agenda. Though sometimes forgotten, a cost of over US$90 a barrel is still a high price. For Saudi Arabia this market volatility is not an immediate disaster. With huge currency reserves and little national debt, the Kingdom is well prepared for the short term, as are other rich Gulf such as the UAE. So far, Saudi Arabia seems to believe the current situation is a temporary phenomenon, and dismissed calling an emergency meeting before November... "; http://www.futuredirections.org.au/publications/indian-ocean/29-indian-ocean-swa/1988-oil-oversupply-highlights-discord-within-opec.html