International Energy Agency

Is The Short Squeeze Over? Global Rally Fizzles, Futures Lower

The biggest question on all traders' minds will be whether the bear market short squeeze that sent the S&P higher by 130 points in 6 days, is finally over - with most global market rolling over and with US equity futures unable to find their  solid early morning footing, it may finally be time to cash out of the bear market rally which so many predicted, and which GSBank yesterday may have top-ticked with perfection.

WTI Surges Above $33 Despite IEA 'Glutter'-For-Longer Warnings

WTI crude prices are up almost 6% this morning with April (the new front-month) trading above $33.50 - testing post-DOE plunge stops. The irony of the ramp is that it comes amid terrible global PMIs (demand), a report from IEA of oil staying in glut for longer than expected (supply), and warnings from Abu Dhabi's biggest bank that $20 oil is possible. Oh well, we are sure the algos know what they are doing... despite veterans of the 1980s oil glut warning it could take 7 to 10 years to emerge from the current slump.

UAE Offers India Free Oil To Ease Storage Woes

In an oil sector first, the oil-rich United Arab Emirates (UAE) has offered free oil to India in return for a storage deal at India’s planned underground facility as the supply glut worsens and some analysts predict that "peak storage" could sending prices crashing further.

OPEC Will Not Blink First

An OPEC production cut is unlikely until U.S. production declines by about another million barrels per day (mmbpd). OPEC won’t cut because it would accomplish nothing beyond a short-term increase in price. Carefully placed comments by OPEC and Russian oil ministers about the possibility of production cuts achieve almost the same price increase as an actual cut. The focus going forward must be on the source of the problem. That is the United States and not OPEC.

WTI Plunges Back Below $30 After Goldman "Teens" & IEA Excess-Supply Warning

WTI keeps dead-cat-bouncing thanks to the algos and crashing thanks to reality. This morning's reality check on the overnight ramp comes courtesy of a double-whammy from Goldman ("wouldn't be surprised to see WTI in the teens") and The IEA which increased its estimate of excess-supply drastically. This has dragged WTI back below $30 once again and where oil goes, stocks go...

Frontrunning: January 20

  • Oil slump rocks markets again in equity rout (Reuters)
  • Global Stocks on Brink of Bear Market as Oil Slides; Ruble Drops (BBG)
  • Global Stocks Slide on Oil Rout (WSJ)
  • Emerging Markets Roiled as Stock Selloff Surpasses Asian Crisis (BBG)
  • Rising Debt in Emerging Markets Poses Global Threat (WSJ)
  • China shares slip as oil slides, outweighing stimulus hopes (Reuters)

Equities Soar, Oil Back Over $30 On Hopes For More Stimulus Following Disturbing Chinese Data

Last night's Chinese data deluge can only be classified with one word: bad. So if bad news was again bad news as many claim, both commodities (read oil), and US equity futures should be tumbling right now... but just the opposite is happening and in fact both Brent and WTI have already jumped over $30 this morning. This happens even as the IEA said this morning that global oil markets could “drown in oversupply,”  And yet this morning both commodities, global stocks and futures soaring? Simple: the following Bloomberg headline summarizes it: "Brent Rallies More Than $1 as China GDP Spurs Stimulus Bets," and where Brent goes, so goes risk, and the S&P.

The Crude Oil Export Ban - "What, Me Worry About Peak Oil?"

Congress ended the U.S. crude oil export ban last week. There is apparently no longer a strategic reason to conserve oil because shale production has made American great again. At least, that’s narrative that reality-averse politicians and their bases prefer. Congress’ decision to lift the 40-year U.S. ban on crude oil exports reflects the same misinformed and distorted thinking that declares that the world’s highest cost producer - tight oil - can somehow also be the world’s swing producer.

Russia Sees No Oil Price Recovery In The Coming 7 Years

“In our estimates, one should hardly expect any serious growth of the oil price above $50," Oreshkin told a breakfast forum hosted by Russian newspaper Vedomosti on Friday. “The oil industry is changing structurally and it may happen that... the global economy will not need that much oil."

Dow Dumps Over 300 Points From Thursday Highs After IEA Warns Oil Glut To Worsen

'As goes oil, so goes the US equity market' appears to bethe new mantra. Just as yesterday's pump-and-dump tracked oil, so in the pre-market, WTI Crude plunged back to fresh 7-year lows after IEA warned that the oil glut will worsen, with prices lower for longer as demand remains subdued through at least 2017. This in turn sent US equities tumbling with Dow futures down 200 points (down 330 from Thursday highs).

US Equity Futures Suddenly Fall Off A Cliff As Europe Slides, Oil Tumbles, EM Currencies Turmoil

It was a relatively calm overnight session in which European stocks wobbled modestly, Japan was up, China was down following its weakest fixing since 2011 as the PBOC continues to aggressively devalue since the SDR inclusion (stoking concerns capital outflows are once again surging), EM stocks stocks were weak and the dollar was unchanged ahead of today's retail sales data and next week's Fed meeting, and then suddenly everything snapped.

OPEC Production Hits Three-Year High As Oil Price Continues Slump

The latest confirmation that the oil cartel formerly known as OPEC is effectively non-existent, came a little over an hour ago when in its latest November monthly report, the Organization of Petroleum Exporting Countries reported that total monthly crude output for the member nations rose to 31.695 million barrels per day, the highest amount produced in three and a half years.