US Crude Production At Cycle Highs As Rig Count Stabilizes; Desperate Saudis Jawbone Deeper Cuts To Come
A tough week for crude oil, which tumbled after algos tagged $50 stops yesterday following the biggest gasoline inventory build in 7 months. While the US oil rig count has stopped rising in the last few weeks, production continues to hit cycle highs stalling prices, but the Saudis are not giving up on their incessant jawboning - hinting that "deeper cuts" are still on the table. US oil rig counts rose by 3 to 768 last week - it has fallen 3 times in the last 7 weeks and is practically unchanged in the last 2 months... Just as we predicted, the lagged response to the shifting oil price has been a stalling of the rising rig count... But even with the US oil rig count declining for 3 of the last 7 weeks, crude production in the Lower 48 rose once again to 9.048mm b/d - the highest since July 2015... WTI prices had a disappointing week - not helped by the biggest gasoline inventory build since January... Once WTI algos tagged $50, it was a one-way street lower “We are stuck in a range and having found some support at $48/bbl, it’s moving higher” says Ole Hansen, head of commodity strategy at Saxo Bank. “We’re really unable to make a clean break” But as OilPrice.com's Tsvetana Paraskova notes, the Saudis are not giving up on their incessant jawboning. OPEC and its non-OPEC partners have not closed the door to the possibility of extending the production cut agreement or even lowering production levels, Saudi Oil Minister Khalid al-Falih told Saudi-owned newspaper Asharq Al-Awsat in remarks published on Friday.. Al-Falih’s comments were aired just a day after OPEC confirmed reports that its crude oil production increase last month, reporting a daily rate of 32.869 million barrels, up by 172,600 bpd. Libya, Nigeria, and Saudi Arabia were the main drivers behind the OPEC production increase, with Libya raising its output by 154,300 bpd—by far the biggest increase among the cartel’s members. Nigerian oil production rose by 34,300 bpd to 1.748 million bpd, while Saudi Arabia’s went up by 31,800 bpd to 10.067 million bpd. “The possibility of continued production cuts is on the table, and the door to extension of reduction has not been closed. If further actions are needed by the market, whether to extend or change production levels, they will be examined on time and agreed through 24 countries,” Asharq Al-Awsat quoted the Saudi minister as saying. Saudi Arabia, however, will not take unilateral actions to tweak production and will seek consensus among all parties concerned, according to the most influential of OPEC’s oilmen. Earlier this week, OPEC held a meeting with some of the producers and cited its members Iraq and the UAE, as well as non-OPEC signatories to the deal Kazakhstan and Malaysia, as laggards in compliance, but added that they “all expressed their full support for the existing monitoring mechanism and their willingness to fully cooperate.” “It is too early to predict what will happen following the first quarter of next year,” al-Falih told the Saudi newspaper. Just two months ago, the minister told the same outlet that the oil market had started to show signs that it was headed in the right direction, and expectations pointed to the market returning to balance in the fourth quarter this year. The shrinking contango structure of the oil market has almost disappeared of late, in a sign that the market is tightening.
Much of the recent ebulient narrative about equity markets has been based on the promise of an earnings rebound - due to beneficial comps in the oil & gas sector. That narrative just hit a wall... As Bloomberg notes, analysts haven’t rushed to upgrade their outlook on earnings per share at Europe’s biggest energy companies, even as Royal Dutch Shell Plc, Total SA and Statoil ASA beat estimates for a second straight quarter. With crude below $50 a barrel, analysts cut their EPS predictions to the lowest since November. Concerns that rising global production will continue to weigh on oil prices are keeping those numbers in check, according to MPPM EK and Saxo Bank A/S.
Authored by Mike Shedlock via MishTalk.com, Steen Jakobsen, Saxo Bank chief economist and CIO just pinged me with a PowerPoint presentation on the preceding and next 30 years. He commented “I somehow to my own surprise came to one single trend I believe in: everything is deflationary. Enjoy the “funny pictures” and the outlook.” 30 Years Ago Current and Foreward Trends Mish Comments I agree with Steen that the trends are deflationary from a CPI perspective. Compare the GMO 7-Year returns estimate to the John Bogle view. I believe GMO has this correct. Public pensions are in serious trouble even on the more optimistic view. Credit Impulse Pay close attention to the global credit impulse chart. Credit impulse is the “Rate of Change of Change” of global credit creation/QE. The Stevens Report discusses the topic in Why “Credit Impulse” Matters to You. There are many analysts and investors who believe that the entire ’09-’17 stock rally is nothing more than the result of a historic, globally coordinated credit creation event from the world’s major central banks. Put in layman’s terms, every major central bank in the world has done QE at some stage over the past eight years, and pumped the world full on cash. So, all they’ve done is create massive asset inflation in bonds, stocks and real estate. While there is no hard proof that this global expansion of credit has powered US (and now global) stocks higher, there certainly is at least a casual relationship if we look at history. The reason I am pointing this out is simple: There are growing signs that the near-decade-long global credit creation/QE cycle appears to be nearing the end. First, there are the central bank actions. The Fed is hiking rates, and likely taking steps to reduce its balance sheet, draining liquidity from the system. Second, the ECB appears to be on the verge of tapering its QE program, and while that will still result in a net credit increase for the next year, the pace of credit creation will slow. Finally, and perhaps most importantly, China continues to aggressively reduce credit in its economy, and I’ll again remind everyone the last time they did that, we got the volatility in 2H ’15. This is where the “Credit Impulse” comes in. Credit Impulse is a term used by various research firms that measures the “Rate of Change of Change” of global credit creation/QE. Put simply, while the global amount of credit may still be rising, the pace of the increase has not only slowed… it’s turned negative. Similar to taking your foot off the gas while you’re still going forward. It’s just a matter of time until you stop. Getting more granular, UBS has been out front on this issue, and back in February noted that Credit Impulse turned negative. In a much-anticipated report out last week, the firm said that the decline over the past three-to-four months has accelerated, with Credit Impulse dropping to -0.6% annualized over the past three months. Now, Credit Impulse is a composite of various measures of credit, including loans, loan demand, and other metrics, so this is not a hard-and-fast number. And the fact that it has turned negative doesn’t mean we’re looking at an impending collapse in stocks. But if we look at the entire picture, negative Credit Impulse; a more-hawkish-than-expected Fed that’s apparently committed to reducing its balance sheet, a Chinese central bank that is apparently committed to reducing credit in that economy, and an ECB that will begin tapering QE in 2018… the fact is we appear to be nearing the end of the post-financial-crisis credit expansion, and with economic growth where it is, I cannot see how that will be positive for stocks longer term. Bottom line, I’m not turning into ZeroHedge (although they are all over this), but the fact is that I sense a lot of complacency regarding the end of this global credit creation cycle. Credit Impulse Update Also consider comments on the Global Credit Impulse by Adam Tooze. In late Feb 2017, UBS’ analyst Arend Kapteyn reported that a measure of global credit impulse covering 77% of the world economy was behaving rather alarmingly. After growing vigorously in 2015 and 2016 thanks to another round of Chinese stimulus the credit impulse had collapsed to zero. Since then the news is worse with the global credit impulse indicator falling earlier this month to negative numbers not seen since the dot.com bubble burst. This should be a strong leading indicator of a fall in investment and contractionary pressures in the world economy. Wrapping up the global credit impulse, ZeroHedge discussed it in Why The (Collapsing) Global Credit Impulse Is All That Matters: Citi Explains. Complete Powerpoint Once again Steen made an excellent presentation. It consists of 28 slides. I used 14 of them. Click on Investment Returns Plus/Minus 30 Years for Steen’s full presentation at the 30th Anniversary CFA Annual Forecast Event, Singapore July, 2017. Thanks, Steen!
Курс доллара США к евро продолжает снижаться в понедельник после падения на прошлой неделе до минимального уровня с начала 2015 года.
Уважаемые дамы и господа! В разделе "Разбор полетов" размещена статья аналитиков Saxo Bank "Финансовый кризис: десять лет спустя" ...Минуло десять лет с тех пор, как Bear Stearns, один из крупнейших на тот момент американских инвестбанков, объявил о приостановке выплат инвесторам фонда High-Grade Structured Credit Strategies Enhanced Leveraged Fund. В тот момент, вероятно, мало кто подозревал, что это событие положит начало полномасштабному финансовому кризису. Кроме того, сегодня исполняется десять лет с тех пор, как Банк Англии в последний раз повысил процентные ставки (курс GBPUSD в то время превышал 2.00!)... Предлагаем вам ознакомиться с этим материалом .
Уважаемые дамы и господа! В разделе "Разбор полетов" размещена статья аналитиков Saxo Bank "Трансформация электромобилей может спровоцировать серьезный кризис в нефтянке" ...Большим вопросом остаются масштабы влияния электромобилей и автономного вождения на будущий спрос на нефть. Существующие тренды могут привести к тому, что владение автомобилями превратится в удел избранных (подобно тому, как сейчас лишь богачи держат собственных лошадей), и потребление бензина резко сократится. Если популярность электромобилей продолжит расти текущими темпами, к 2023 году EV могут обусловить падение спроса на нефть на 2 млн баррелей в сутки, что почти эквивалентно размеру профицита "черного золота" в 2014 году.
Цены на нефть растут в четверг после резкого падения по итогам предыдущей сессии, ставшего максимальным за месяц.
Цены на нефть потеряли около 4% в среду, 5 июля, на фоне роста экспортных поставок государствами OPEC и укрепления доллара. Brent завершила сессию, став дешевле на $1,82, или 3,7% — баррель стоил $47,79. West Texas Intermediate снизилась на $1,94, или 4,12% — до $45,13 за баррель. OPEC ежедневно экспортировала в июне 25,92 млн баррелей — это на 450 тысяч баррелей больше, чем в мае, и на 1,9 млн баррелей в день больше, чем годом ранее, выяснили исследователи Thomson Reuters. Поставки росли второй месяц подряд.
Эпоха кредитной экспансии подходит к концу, поэтому инвесторам не стоит исключать возможность рецессии Saxo Bank, специалист в области комплексной онлайн торговли широким спектром активов и инвестиций, опубликовал свой квартальный прогноз по мировым рынкам, а также основные