Crude

Having pushed up towards $49 in its exuberant "a hawkish fed must mean everything in the world is awesome" way, yesterday's reality check on inventories (rising), production (rising), and The Fed (we are going to hike no matter what) which means the dollar too is surging and is pushing down on commodity prices, has dumped WTI Crude back below $46 and erased all of the gains post-FOMC.

For those eager to cut to the chase and curious if overnight we have had another standard USDJPY ramp levitating US equity futures on low volume, the answer is yes. And since the USDJPY carry was patient enough, it managed to trigger the 2100 ES stops and as of this moment the futures were comfortably on the politically-correct side of 2100.

Trucks, Trains and now Ships: suddenly everything seems to be in freefall.

There's a long way to go for the Saudis and the UAE to get back into the black and indeed, even Qatar is now set to post red ink...

When Saudi Arabia moved to Plaxico themselves last November by killing the petrodollar in an effort to bankrupt the US shale space and tighten the screws on Moscow, Riyadh set in motion a series of events that culminted in a 20% fiscal deficit and, most recently, an S&P downgrade. Now, the kingdom is not only running out of money, but water and food as well.

Crude oil algos traders are buying WTI despite DOE reporting the 6th consecutive weekly inventory build in US crude stocks (confirming API's build at 2.8mm barrels). Furthermore, for the 3rd week in a row, US crude production rose (back to one-month highs)... and then the humans appeared to read the DOE report and the selling began.

The most entertaining overnight story has to do with the latest farcical development in the Chinese "market" when just after open, it was reported that PBOC Governor Zhou said a trading link with Shenzhen will start this year which promptly sent all Chinese brokerages soaring, and the Shanghai Composite jumped over 3%. And then, out of the blue, the PBOC said the undated comments were actually as of May. As Bloomberg put it, "China’s central bank unintentionally sparked a surge in the nation’s stock market by publishing five-month-old comments from governor Zhou Xiaochuan that said a link between exchanges in Shenzhen and Hong Kong would start in 2015."

For the sixth week in a row, API reports a larger than expected 2.8mm inventory build (though that is lower than the last few week's build). Cushing stocks, however, saw a 508k draw, easing some storage concerns. Crude oil prices remain confused for now having pumped and dumped to unch.

Remember Skopos Financial, the US subprime auto lender run by Santander Consumer veterans? Well, in a testament to just how desperate America is to perpetuate the US auto market "renaissance," the company just sold $154 millon worth of paper to investors partially backed by loans to borrowers with no credit score.

Echoing the end of August face-ripping rally, WTI crude has soared almost 12% in the last 4 days, pushing the Dec contract above $48 for the first time since mid-September... And the reason? Well, The Fed is raising rates and they wouldn't do that if the economy was not awesome, right?

The Keyser Soze bid is back... panic buying crude futures to run stops above yesterday's high before being gone... just like that...

So far today's trading session has been a repeat of what happened overnight on Monday, when following a weak start on even more weak Chinese data, US equities soared on the first trading day of the month continuing their blistering surge since that dreadful September payrolls report, which as we showed was mostly catalyzed by a near record bout of short's being squeezed and covering, which accelerated just as the S&P broke the 2100 level.