UPDATE: Denial *GREEK CREDITORS NOT YET DRAFTING FINAL ACCORD, EU OFFICIAL SAYS
Another day, another rumor (not yet denied) of a report that Greece and its creditors are crafting a deal (well durr)... The result, vertical buying panic in US equities, USD dumped (on EUR strength), TSY yields spike 3bps, and Crude oil surges... what a "market"
WTI Crude's late-day bounce yesterday is gone... and then some. Front-month (July) futures prices are back below $57.50 - their lowest since April 23rd (before the inventory "draw"s began). With OPEC's June meeting looming every closer, one wonders if this downward pressure on price is helping to solidify anti-Saudi rhetoric among the cartel members...
Crude oil prices are tumbling as the USDollar pushes on to new highs driven by the continued stretch of renewed weakness in the Euro. As Bloomberg's Richard Breslow notes, however, "it’s not all about Greece. Not even close."
It had been a painfully quiet session in Asia (where Chinese levitation continues with the Shanghai Composite up another 0.6% oblivious of yesterday's rout in the US, because as we explained for China it is now critical to blow the world's biggest stock bubble) and Europe, where the only notable news as that for the first time in months the ECB had not increase the Greek ELA, keeping it at €80.2 billion on conflicting reports that Greek deposit withdrawals had halted even as Kathimerini said another €300MM had been pulled just yesterday, suggesting the ECB has reached the end of its road when it comes to funding nearly two-thirds of what Greek deposits are left in local banks. But the punchline came moments ago when Bloomberg reported that "Greece will likely miss a deadline for a deal with creditors by the end of the week as the two sides have made little progress during talks in recent days."
Between 1974 and 2009 there were 62 magnitude 3.0 or stronger earthquakes in Oklahoma. In the past five years there have been 1,070 M3.0+ quakes. The chart of Oklahoma's quake surge correlates perfectly with the amount of wastewater injected into the state. And when it comes to Oklahoma's "induced seismicity" there is nobody more responsible for either Oklahoma's "shale miracle" or the resultant earthquake epidemic than David Chernicky, CEO of Tulsa-based New Dominion.
WTI is having its worst day in over 2 months as the front-mointh tumbles back below $57.50 to one-month lows... Perhaps fundamentals do matter after all - or is this pre-OPEC dump to force non-Saudi cartel members to revolt?
A rooftop solar system may make overall sense if the cost of grid electricity is high enough, but batteries and backup generators still aren’t remotely competitive with grid electricity when it comes to load-following.
"We shall do our best then to remain as we have been: pleasantly long of equities on balance. There really is no other course of actions we can take.... Long of One Unit of Ten Year Notes/short of One Unit of the Long bond future: Friday, May 22nd we wished to sell into the strength of the bond market"
It appears the oil-spoofing machines are unhappy with the 'good' news this morning on orders and US housing - or perhaps they read this - but for now, WTI Crude front-month futures are back below $58.50, down over 2% on heavy volume...
Storage withdrawals and falling rig count have been the main sources of hope that U.S. tight oil production will fall and that oil prices will rebound. That hope is fading as it is now clear that recent withdrawals from U.S. crude oil storage are because of price, not falling supply, and that the drop in rig count has stalled. Present data, however, suggests that the global over-supply has gotten worse, not better, that overall demand for liquids remains weak, and the world economic outlook is discouraging. At the same time, market movements are not always based on fundamentals. In the long run, however, fundamentals rule suggesting the current price surge is at best premature.
While yesterday most markets were closed and unable to express their concerns at the very strong showing of "anti-austerity" parties in Spain's municipal election from Sunday, then today they have free reign to do just that, and as a result European stocks are broadly lower, alongside the EURUSD which dripped under 1.09 earlier today, with Spanish banks among the worst performers: Shares of Banco Sabadell, Bankia, Caixabank and Popular were down 1.8 to 2.3% earlier this morning, and while the stronger dollar was a gift to both the Nikkei and Europe in early trading, after opening in the green, Spain's IBEX has since slid into the red on concerns of what happens if the Greek anti-status quo contagion finally shifts to the Pyrenees.
On June 5, all eyes will be on OPEC as the group convenes in Vienna to discuss its course for the second half of 2015.
Israel is refusing to comply with an order by a Swiss court that it pay $1.1 billion that it has owed to Tehran since before Iran’s 1979 Islamic revolution for its share of a jointly owned oil pipeline. “Without referring to the matter at hand, we’ll note that according to the Trading with the Enemy Act it is forbidden to transfer money to the enemy, including the Iranian national oil company,” the Israeli Finance Ministry said in a statement.
"Like pushing a rock up a hill," is how some trader’s view the current disconnect between the physical market for crude oil and the futures market with speculators pushing futures prices higher while the physical market remains moribund.