Emergency officials and Exxon Mobil were responding Tuesday afternoon to a ruptured pipeline that was leaking crude oil into the ocean off the Santa Barbara County coast, authorities said. The Santa Barbara County office of emergency management has identified the responsible party as Plains All American Pipeline. As The LA Times reports, by 3:45 p.m., the leak had left a four-mile-long sheen of oil extending about 50 yards into the waters along Refugio State Beach in Goleta, said U.S. Coast Guard Petty Officer Andrea Anderson.
Yesterday, the FT reported that Saudi Arabia gloated in declaring victory over US shale. “There is no doubt about it, the price fall of the last several months has deterred investors away from expensive oil including US shale, deep offshore and heavy oils,” a Saudi official told the Financial Times in Riyadh, giving a rare insight into the kingdom’s thinking on oil strategy. Which is great, but there are two problems. First, any time someone say "there is no doubt about it", or "unambiguously this or that", it is a lie. Second, Saudi Arabia is dead wrong.
PetroChina just surpassed Exxon Mobil to become the largest energy company in the world, on a market cap basis. Now the question becomes: can PetroChina retain its status as the world’s largest energy company?
The biggest overnight story was neither out of China, where despite the ridiculous surge in new account openings and margin debt the SHCOMP dipped 08%, or out of Japan, where the Nikkei dropped 2.7%, the biggest drop in months, after the BOJ disappointed some by not monetizing more than 100% of net issuance and keeping QE unchanged, but Europe where for the second day in a row there was a furious selloff of Bunds at the open of trading, which briefly sent the yield on the 10Y to 0.38% (it was 0.6% two weeks ago), in turn sending the EURUSD soaring by almost 200 pips to a two month high of 1.1250, and weighing on US equity futures, before retracing some of the losses.
"An 'oil-debt nexus' could create a vicious circle whereby overindebted companies pump more oil to ensure they can pay interest on their loans, adding to the current global oil glut, and further depressing energy prices," WSJ notes, citing a BIS report. The interplay between the industry's growing debt pile and falling prices is a microcosm of the deflationary dynamic that’s taking hold in the macroeconomy and that serves, in Citi's words, to destroy creative destruction, creating "zombies" along the way.
There is mounting evidence that oil prices are poised to rebound from a historic bust. But what if the bust is not over yet? Despite the signs of a rebound, ExxonMobil’s CEO Rex Tillerson has a much more bearish take on oil prices. Speaking at the IHS CeraWeek conference in Houston, Tillerson predicted that oil prices would remain subdued for the next several years.
Apple's market capitalization of $730 billion may now be more than double that of Exxon Mobil, but when it comes to taxes paid to the US government, it's no contest: the company with record profitability that so many progressive hipsters adore and for whose products they line up with annual regularity is billions of dollars below its "fair" contribution to the US Treasury. Ironically, it is eclipsed by that other company that so many progressives love to hate: Exxon Mobil, which paid $4 billion more in tax than Apple, yet whose valuation has been cut by 15% over the past year as a result of the collapse in oil prices.
As hopeful US investors buy everything oil-related on the back of a lower than expected crude build this week (after the biggest build in 30 years the week before), The Kingdom has stepped up overnight and ruined the dream of supply-restrained price recovery as it announced a surge in production output in March to yet another record high. The nation boosted crude output by 658,800 barrels a day in March to an average of 10.294 million a day, which as Bloomberg notes, is about half the daily production from the Bakken formation. WTI Crude prices have slipped by around 2% from yesterday's NYMEX Close ramp highs as it appears Saudi Arabia is not willing to just let this effort to squeeze Shale stall.
Capitol Locked-Down After Mailman Lands Gyrocopter On Lawn To Deliver Campaign Reform Letter To CongressSubmitted by Tyler Durden on 04/15/2015 13:51 -0400
Update: *LOCKDOWN LIFTED AT U.S. CAPITOL AFTER GYRO COPTER ARREST
US Capitol Police have locked-down buildings after a man landed a gyrocopter on the lawn. As The Tampa Bay Times reports, the man is a mailman from Ruskin named Doug Hughes who was attempting to deliver campaign reform messages to Congress.
Instead of leaving its own production flat in an attempt to stabilize oil prices and hit its "optimistic" outlook sooner rather than never, Saudi Arabia would boost production quite sharply to claw back market share. Specifically al-Naimi, revealed that the kingdom’s oil production in March was 10.3-million barrels a day – a record high. .. Why is Saudi Arabia opening the spigot? There is no doubt that country’s own domestic demand is rising, thanks to heavy investment in new refineries, requiring more production. But it also appears that Saudi Arabia is making renewed push for market share for fear that a gusher of Iranian oil will soon hit the export markets as the Iranian embargo is ratcheted back
The full breakdown of the biggest energy deal in the past decade and the 14th largest ever corporate takeover.
- Germanwings Airbus crashes in France, 148 feared dead (Reuters)
- Greece promises list of reforms by Monday to unlock cash (Reuters)
- Merkel Points Tsipras Toward Deal With Greece’s Creditors (BBG)
- Banks Shift Bond Portfolios -Move to ‘held to maturity’ category aims to guard against rising rates, shield capital (WSJ)
- Beijing to Shut All Major Coal Power Plants to Cut Pollution (BBG)
- As Silence Falls on Chicago Trading Pits, a Working-Class Portal Also Closes (NYT)
- Oil below $56 as Saudi output near record, China activity slows (Reuters)
Utilities have always been attractive yield plays for conservative investors, but natural gas prices are low and margins are not that great for the industry.
- Hilsenrath: Fed to Markets: No More Promises (WSJ)
- Fed set to ditch 'patient' rate vow as it eyes U.S., world growth (Reuters)
- Fannie, Freddie could need another bailout (Reuters)
- Alibaba Stock-Sale Lockup Is Ending (WSJ)
- Netanyahu Sweeps Aside Herzog’s Challenge to Win Israel Vote (BBG)
- Oil Bonds Lose Investors $7 Billion in 10 Days (BBG)
- There’s a mysterious $1.1 trillion in spending cuts in the House GOP’s budget (WaPo)
- ECB's Celebration of Its New $1.4 Billion Tower Is Spoiled by Protesters (BBG)
- Germans Tired of Greek Demands Want Country to Exit Euro (BBG)
- Weak euro powers European stocks to new highs (Reuters)
- Siemens Cheers Euro Slump as Emerson Eases Dollar’s Sting (BBG)
- A Police Gadget Tracks Phones? Shhh! It’s Secret (NYT)
- If Economists Were Right, You Would Have a Raise by Now (BBG)
- iWatch: who’s going to pay $17K for a device that will be obsolete in two years? (Barrons)
- Ferguson Suspect Said to Claim He Wasn’t Firing at Police (BBG)
- Why Bankers Are Leaving Finance for No-Salary Tech Jobs (BBG)