Crude

The "Terrifying Prospect" Of A Triumph Of Politics Over Economics

All of life’s odds aren’t 3:2, but that’s how you’re supposed to bet, or so they say. They are not saying that so much anymore, or saying that history rhymes, or that nothing’s new under the sun. More and more 'they's seem to be figuring out that past economic and market experiences can’t be extrapolated forward - a terrifying prospect for the social and political order.

What Matters Most?

What 3 pieces of information would you need to confidently call the 2016 end-of-year level on the S&P 500?

The Curious Case Of The 550 Million Missing Barrels Of Crude Oil

Crude oil production exceeded consumption by an average of 0.9 million barrels per day in 2014 and 2.0 million bpd in 2015. This means that as of this moment, about 550 million "missing barrels" are unaccounted for "apparently produced but not consumed and not visible in the inventory statistics."

Despite Record Cushing Inventory, Oil Jumps To $38 On Biggest Gasoline Draw In A Year

DOE's 3.88mm inventory build confirms API's print and is the 8th weekly rise in the last 9 for overall crude levels. Cushing also saw a build (690k) -- the 17th week of the last 18. But the market - for now - is focused on the 4.5mm barrel draw in gasoline inventories - the biggest in a year, as the seasonals pickup. Crude jumped on the news, seemingly ignoring the fact that Cushing inventories now stand at a record high 66.9mm barrels. Also notably, US production rose for the first time in 7 weeks.

"Output Freeze A Joke", China Demand To Fall, And Other News That Should Be Moving Oil

In this bipolar market, where only momentum, liquidity, technicals and short squeezes matter, as well as the occasional kneejerk reaction to a flashing red headline (usually some lie out of Venezuela or Nigeria about an imminent OPEC meeting which has not even been scheduled), one thing that no longer seems to have an impact on prices is actual news and fundamentals. So to help those who are blindly following the price of oil as an indicator of what is happening, here is a brief recap of the main news and research reports that should be impacting where oil trades today, but almost certainly won't.

S&P Futures Jump As Rebound In Commodities Helps Defense Of Key Support Trendline

With China's Plunge Protection Team having intervened and set a positive spin on another poor session, traders put declines in Asia behind them as European markets rose along with U.S. index futures and commodities. European shares advanced for the first time in three days on speculation the region’s central bank will ramp up monetary stimulus on Thursday. A gauge of raw materials rebounded from its biggest selloff in a month, buoyed by gains in oil and copper. Furthermore, the previously noted selloff in Japanese government bonds - one which triggered circuit breakers and which some speculated may have been precipitated by the BOJ itself - dragged Treasuries and German bunds lower, gold fell a second day and the euro dropped versus most of its major peers.

Who Makes What?

From Bahamian crawfish to Mexican shoes, and from Argentine soybeans to Ethiopian coffee, the world makes (and trades) in far more than just crude oil and petroleum products. However, given the current deflationary world, it is very notable how many countries in the world are dependent on commodities as the primary source of foreign income.

Crude Chaos As Cushing Inventories Rise For 6th Straight Week

Following Genscape's projection that Cushing inventories rose less than expected, various sources on Twitter report that API sees a 4.4mm build (in line with expectations of a 3.9mm build) after EIA's massive build of over 10.3mm barrels last week. Cushing saw a 692k build - the 6th week in a row but gasoline and distillates saw a draw. Crude sold off all day as the short-covering squeeze ended but as the data hit, WTI dipped, ripped, and dipped again... only to rally once more...

Trumpomania & Trumpopanic

The country’s social mood is apparently ripe and it finally seems actually possible for a perceived outsider to win by challenging the established order. Our main regret is that it wasn’t yet ripe at the time Ron Paul tried his hand at winning the nomination. Everything Trump is saying and doing should probably be seen in the context of his strategy. It’s quite Machiavellian actually. The alleged lack of discernible policy stances, the occasional contradictions and often hair-raising statements are all in pursuit of the same goal: to win the nomination. Other than that, we mainly enjoy the growing discomfort of assorted cronies and professional politicians.