Short-term, oil prices are a function of sentiment and manipulation. Here's how that works.
“This would mean a regional war. Mistakes can’t be tolerated, especially with the tension mounting around the region. It’s not about Iranians, but about all troops on the ground fighting with the Syrian army. How would the Syrian army deal with a foreign country on its soil, without its permission, and maybe aiming [guns] at them?"
"Do they really think they would win such a war very quickly? That's impossible, especially in the Arabic world. There everyone is fighting against everyone... everything is far more complicated. It could take years or decades."
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.
“Given the current environment in the oil and gas market and the poor outlook for future fundamentals in the short to medium term, BNP Paribas has had to make adjustments to some of its businesses and has decided to stop the redevelopment of its reserve-based lending business."
As Saudi Arabia readies a Syrian ground invasion, there are competing accounts of just who destroyed 9 targets in Aleppo on Wednesday. While The Pentagon says Moscow hit the city's two main hospitals, The Kremlin claims two US Air Force A-10 attack planes carried out the strikes which raises the following question: is the US set to conduct airstrikes in support of the rebels, thus marking a fresh and exceptionally dangerous escalation of hostilities in the country?
Disgruntled employee (maybe he was mad that the kingdom rolled back fuel subsidies) or excuse to invade Syria? We'll see.
Saudi Arabia and Turkey are both pushed into a corner over the shifting power base in the Middle East. The paranoia and desperation, like Saddam in 1990, could very well cause both countries to commit to the very act of aggression which will lead to their ultimate demise and removal from a position of influence within the region. Are we on the verge of another war?
John Kerry Makes Last Ditch Effort To Avert World War III As Saudis, Turks Prepare For Syria InvasionSubmitted by Tyler Durden on 02/10/2016 13:57 -0500
Tomorrow, John Kerry will meet Sergei Lavrov and several of his other counterparts from Europe and the Mid-East in Munich in a last ditch effort to revive Syrian peace talks, which fell apart amid an intense Russian air assault on rebel positions in Aleppo. With the opposition facing imminent defeat, the rebels' Sunni benefactors are preparing to intervene in a move that may very well spark a global conflict.
While algos patiently await the only thing that matters for US stocks today which is Janet Yellen's testimony before Congress. expected to be released at 8:30 am (and previewed here), the rest of the world this morning is a hot mess of schizophrenic highs and lows.
AL JUBEIR SAYS U.S. PROPOSED GROUND FORCE DEPLOYMENT: SPA
SAUDI FORCE WOULD FIGHT AS PART OF U.S.-LED COALITION: SPA
SAUDI MINISTER SAYS SENDING GROUND FORCE UNDER DISCUSSION: SPA
SAUDI ARABIA READY TO SEND SPECIAL FORCE TO FIGHT IS IN SYRIA
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...
"Our whole existence is now threatened, not just losing more ground. They are advancing and we are pulling back because in the face of such heavy aerial bombing [by Russia] we must minimize our losses."
Everything went from bad to worse once Europe opened, and things started going "bump in the morning" across the European banking sector, where not only has it been more of the same with CDS spreads for major banks - most notably Deutsche Bank - continuing their surge wider, but also EM spreads to Bunds all following, with the Portugal-Germany Yield spread blowing out above 300 bps for the first time since 2014, and other peripheral nations following.
An Exasperated John Kerry Throws In Towel On Syria: "What Do You Want Me To Do, Go To War With The Russians?!"Submitted by Tyler Durden on 02/07/2016 23:48 -0500