Crude

• Oil up after U.S. crude stocks drop, still close to 11-year lows (Reuters)
• Global Stocks Rally; Mining, Metals Shares Lead Gains (WSJ)
• OPEC Sees Demand for Its Crude Oil Falling for Rest of Decade (BBG)
• The Trouble With Sovereign-Wealth Funds (WSJ)
• U.S. Calls for 256% Tariff on Imports of Steel From China (BBG)
• Iraqi troops expected to drive ISIS from Ramadi in days (Reuters)

With just a handful of trading sessions left in the year, this is how the major global markets look as 2015 is about to close. As of this moment, and in keeping with the Christmas spirit, the biggest question is whether the S&P500 will close green or red for the year.

There are a few correlations that we find particularly compelling...

It's grim up north... and getting grimmer. Amid soaring suicide rates, Canada's once-booming oil patch is rapidly accelerating its downward trajectory. "Canadians should be concerned in times like these," warned Tim McMillan, president and chief executive of the Canadian Association of Petroleum Producers, noting that the oil and gas sector will see 100,000 job losses by the end of this year. Apart from the protracted price declines, Alberta’s oil and gas sector has also had to contend with a 20 per cent hike in corporate taxes, increased provincial royalties, a carbon tax and new regulatory policies to limit rein in carbon emissions... and now a new competitot from US exports.

2015 has witnessed several events that had, and will have, negative repercussions on individual freedom. Orwellian totalitarianism is increasingly creeping into our everyday lives. How much more intrusive will the violations of our liberties become and for how long will the establishment get away with this? With regards to the financial system, no real solution was found to issues such as those in the euro zone. Furthermore, the financial system as a whole once again got deeper into debt. For how much longer can central banks and governments continue kicking the can down the road without any real reform?

Following last week's huge build reported by DOE, crude inventories reported by API tonight dropped 3.6 million barrels (drastically different from the 2.3mm build expected). WTI is rallying on the news, despite a 1.5 million barrel build at Cushing (up notably from last week's 847k) - the 7th weekly build in a row.

Just as we warned, since the US export ban 'lift' loomed, so WTI prices have shifted notably, having today converged to Brent's price for first time since January. It may have a lot further to fall as some analysts suggest the lifting of the export ban "is going to end up ultimately being bearish everything."

"... we fear that prices are soon to head lower… and perhaps materially so. Thus, it is not only wise, it is reasonable, that we shall increase the size of our derivatives positions to make quite certain that our net long position is covered completely and that we are indeed as “net neutral” as we can possibly be.... ... we do find ourselves quietly… very, very quietly… turning away from being manifestly and overtly bearish of crude to being bullish as the term structures continue to shift."

• Battered oil wins respite, lifts stocks (Reuters)
• Oil Halts Decline as Emerging Market Stocks Climb on China (BBG)
• Bonds Set to Beat Stocks Globally in 2015 After China Falters (BBG)
• SpaceX Falcon rocket nails safe landing in pivotal space feat (Reuters)
• China Leaders Flag More Stimulus After Top Economic Meeting (BBG)
• SEC to Retrench Case Against SAC’s Steven A. Cohen (WSJ)

It has been a seesaw session with U.S. stock index futures following their dramatic buying burst in the last half hour of market trading yesterday by first rising, then falling, then rising again alongside European equities both driven almost tick for tick with even the smallest move in the carry trade of choice, the USDJPY, even as Asian shares trade near intraday highs after China’s leaders signaled they will take further steps to support growth.

Oil's hope for a bottom anytime soon appears to stand Snow White's chance in hell of coming true. Seventy-eight years after Walt Disney released the first full-length animated feature, and seven factors in today’s crude complex are dwarfing crude prices.

OPEC blowback continues to ripple around the world. With Russia's Ruble pushing back towards record lows against the USD, and Kazakhstan's Tenge having tumbled to record lows, the writing was on the wall for Azerbaijan. As Bloomberg reports, the third-biggest oil producer in the former Soviet Union moved to a free float on Monday and the manat crashed almost 50% instantly to its weakest on record with the second devaluation this year.