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Oil Slumps To 3-Year Lows, Bond Yields Tumble, Stocks Stumble
Overnight saw the weakness in the crude complex continue with WTI dumping to its lowest since October 2011 at $75.84. Treasury yields tracked crude lower and 30Y yields are now down 4bps on the week (having been up 5bps at their peak yesterday before Saudi Arabia's pricing decision). Stocks are sliding in the pre-market but have room to fall to catch down to oil/bonds implied weakness. Gold, silver, and copper are also lower even as the dollar slides lower.
Stocks catching down to Bonds/Oil weakness
Don't forget oil's plunge is as much lack of demand as over-supply by desperate oil producers
As Futures tried to scramble back to unch from Saudi news overnight but failed
Chart: Bloomberg
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Will be used as justification for QEx
Look at them trying desperately to keep Ag under $16, it ain't happening! Those of you waiting for $1000 and $9 will be sorely disappointed.
It's ’cause no one’s driving to the polls . . . they all did ‘early voting’.
Shut down oil rigs and closed mines.
Lot's of jobs tied to these.
Deflation is vortexing.
THe USD is just doing what gold did in sept 2011
Gas is getting cheap. Time to go out and buy me a Hummer,...... then, after she gets done, I may go look at cars.
Don't be a cheapskate ... why not buy two Hummers!
That's what a good friend would do. Buy two Hummers then give one to his buddy.
This is cleary a US / Saudi / Qatar / CIA Operation to strangle Russian oil revenues through a 'poison pill' strategy.
As Putin said 'Play time is over..'
Or maybe its just demand destruction gaining momentim in a negative feedback loop, rest is just trying to look like its all part of the plan?
2011 replay
Worse actually.
We know there is no plunge protection team and there is no recovery. And we also know Wall Street has an absolute mountain of leverage and "has been surprised all year by the strength in treasuries and the drop in oil" according to the Wall Street Journal (said repeatedly and all year I might add.)
Easy to overplay this and this is one trade I don't want to right in (waiting to get back into equities and be a "job creator.")
On the other hand...
Debt saturation means everyone is too busy paying interest to buy oil? The last time oil broke this trend was in 2008 in the middle of the last crisis. Maybe the bomb already went off?
supply and demand, lulz
there is no market, there is only old yeller
maintenance work on printers will soon be complete
maintenance work on printers will soon be complete
Rough calculation:
As of 2009:
250 million barrels not reported per quarter at minimum
Hence 1 billion barrels per year
Hence 5 billion barrels for 5 years.
This is at minimum
I'd say between 5 to 10 billion barrels are in storage world wide locked up as collateral for derivatives.
That is exactly why economy is dying.
Price drop is a margin call on that, same as in 2008.
Assuming 7 billion being in storage:
For 18 million barrels per day US consumption, that is about 380 days or so, so 1 year of US consumption
For 9 million barrels per day China consumption, that is about 750 days of China consumption, about 2 years
Think. That is why world economy is dying
Well reasoned, ekm, thanks.
Where does one store 7,000 tankers full of oil?
onshore storage
And Silver has a 15 handle. lol
Industrial demand is gonna come crushng in during a recession, just wait!
deflation first
Wait....you mean stawks are down? I feel all dismayed like the White House.
Massive nasty deflation gaining momentum as more job losses, houses prices correcting sharply (outside of Cali), more layoffs, more taxes, higher food prices, piles fo clothes sitting in the aisles of retial stores, and so on.
Except for that, I'm very Bullish ! I may join the doc Engali and trade in my Ford 'Fireball' Pinto or my exploding Honda airbag vehicle for a Hummer also!
http://www.pbs.org/newshour/bb/automakers-recall-14-million-cars-explodi...
Oil coming back up, now over $77. Stawks closing in on green territory, too.
2 years ago Jim Ricktards was predicting:
- war with Iran
- Persian Gulf mined
- $ 200 oil