Crude

Oil Fades From OPEC Exuberance On Fund Flows, Storage, & Contango Concerns

The overnight exuberance in crude oil futures markets has faded notably as the day has worn on. While news of supply cuts are unquestionably bullish (should one choose to believe it or not, remember the Saudis admission "we tend to cheat"), but the last few days have also seen a plethora of bearish-biased news that for now is being ignored.

Wall Street Reacts To The OPEC/NOPEC Deal: "Saudis Are Wrong To Think US Shale Won't Respond"

With oil prices surging to 17-month highs following this weekend's OPEC-NOPEC deal and Saudi promises to cut still more, many Wall Street analysts are skpetical with Goldman Sachs warning that the Saudis are wrong to think U.S. shale production won’t respond to higher prices. However, Nomura and Bernstein see little threat to OPEC from rising U.S. shale production in 2017.

Frontrunning: December 12

  • Crude Soars as Output Deal Weighs on Bonds; China Shares Tumble (BBG)
  • 10-Year Treasury Yield Above 2.5% for First Time in Two Years (WSJ)
  • The New Reality of TV: All Trump, All the Time (NYT)
  • Fed May Struggle to Signal What Comes After December (WSJ)
  • China warns Trump against ignoring its Taiwan interests (Reuters)

Saudi "Shock And Awe" Sparks Buying Panic In Crude - WTI At 17-Month Highs

Despite Saudi Arabia pumping record amounts of crude, the energy complex has spiked 6% higher tonight after two major headlines. First, Russia and other non-OPEC nations agreed to join the OPEC pledge to reduce production; and then, in what some are calling their "whatever it takes" moment, Saudi Arabia surprised the market by saying it will cut more than previously agreed.

Trump Reignites China Diplomatic Spat, Says Not Bound By "One China" Policy

"I fully understand the 'one China' policy, but I don't know why we have to be bound by a 'one China' policy unless we make a deal with China having to do with other things, including trade. We're being hurt very badly by China with devaluation, with taxing us heavy at the borders when we don't tax them, with building a massive fortress in the middle of the South China Sea."

Art Cashin Explains Yesterday's Furious Rally

"Just before the buy programs kicked in, the rally in the Dow Transports was shifting up a gear as the index was on the verge of punching through to a new record high. If the Transports made a new record high, it would confirm the record high in the Industrials, thus giving a Dow Theory buy signal. As that realization spread, the algorithms kicked in with buy program after buy program and the race was on."

Global Equity Euphoria Prepares To Meet Mario Draghi

There’s seemingly no stopping the equity side of the “Trumpflation” trade in what may be developing into an epic year end blow-off top. The euphoria which took the S&P 500, Russell 2000 and the Transports to all-time highs yesterday, and the Dow to less than 500 points away from 20,000 carried over into Asian stocks (+0.8%) as they followed bullish trend, while European stocks rose for a fourth day.