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WTI Crude Tumbles Under $78 As OPEC Slashes Growth & Demand Expectations

Tyler Durden's picture




 

While it has been obvious to many that the drop in oil prices is a weak demand issue (amid a desperate over-supply pump for revenues in a decling growth world), talking-heads have remain unashamedly bullish of growthiness and shrugged at commodities dumping at the fastest pace since Lehman. However, it appears OPEC just burst that little bubble of hope by slashing demand forecasts. Crude prices tumbled on the admission.

 

OPEC's World Oil Outlook slashes GDP growth expectations from last year

 

With OECD demand tumbling

 

And the result...

 

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Thu, 11/06/2014 - 09:59 | 5419152 Cognitive Dissonance
Cognitive Dissonance's picture

Didn't an oil/commodities crash precede the last global stock market crash?

Thu, 11/06/2014 - 10:02 | 5419162 kliguy38
kliguy38's picture

repeat after me........recovery

Thu, 11/06/2014 - 10:04 | 5419176 max2205
max2205's picture

Don't worry McCONnell has it under control

Thu, 11/06/2014 - 10:06 | 5419186 GetZeeGold
GetZeeGold's picture

 

 

Because unemployed people that aren't counted in the unemployment figures can't afford gas?

Thu, 11/06/2014 - 10:32 | 5419296 Bunghole
Bunghole's picture

Who needs gas when Honey Boo Boo is on the TeeVee and Uncle Sugar sends you a check every 2 weeks.

FSA, FSA, FSA!!!!

Thu, 11/06/2014 - 10:59 | 5419431 MalteseFalcon
MalteseFalcon's picture

This is the oil-soaked version of QE taper.  The rise in oil prices under Obama was used to recapitalize the banks.  Now the hope is that lower oil and gasoline prices will re-ignite the real economy.  Are the banks re-capitalized?  Will the real economy reignite?

People don't need to drive to a job they don't have.  I'm not spending my gasoline savings.  Let's see what XMAS looks like.

Thu, 11/06/2014 - 11:41 | 5419617 JRobby
JRobby's picture

Looks like buy everything on the 23rd & 24th after 16 price cuts.

Thu, 11/06/2014 - 13:30 | 5420137 Son of Loki
Son of Loki's picture

Oil is plunging because … of the weather.

Thu, 11/06/2014 - 11:50 | 5419678 Kprime
Kprime's picture

they cancelled honey booo shit, reckon they'll cancel the checks some day?

Thu, 11/06/2014 - 10:03 | 5419165 Winston Churchill
Winston Churchill's picture

Yes, its de'javu all over again.

Thu, 11/06/2014 - 10:05 | 5419175 Philo Beddoe
Philo Beddoe's picture

You can say that again. 

Thu, 11/06/2014 - 10:18 | 5419239 agent default
agent default's picture

Yes but this time it's different. MUAHAHAHHAHA LOL

Thu, 11/06/2014 - 10:25 | 5419263 LawsofPhysics
LawsofPhysics's picture

not quite, this time we have the same criminals leveraged 1000x greater than they were last time.

I wonder how the "bailouts" will be recieved this time around...

tick tock motherfuckers.

Thu, 11/06/2014 - 10:25 | 5419265 LawsofPhysics
LawsofPhysics's picture

The NSA is duplicating my posts...

Thu, 11/06/2014 - 10:13 | 5419171 Dr. Engali
Dr. Engali's picture

Yes, but we also had mark to maket accounting, and we all know what happend to that. 

 

Here uncle Ben, this turd sandwich should be trading at a premium. I'll let you buy it for par.

Thu, 11/06/2014 - 10:03 | 5419172 Headbanger
Headbanger's picture

Yep, all that re-re-re-rehypothecated  collateral in commodities is now worth ZILCH!

Can you say "MASSIVE EPIC EQUITY IMPLOSION DEAD AHEAD!!?"

There ya go.. I knew you could.

Thu, 11/06/2014 - 10:04 | 5419177 post turtle saver
post turtle saver's picture

call me when it's $60

Thu, 11/06/2014 - 10:14 | 5419214 Stoploss
Stoploss's picture

Why, yes. Yes it did.  Also sent us into recession.

Which is about to morph into the second phase.

Moar recession-er.

Thu, 11/06/2014 - 10:23 | 5419259 agent default
agent default's picture

This does not feel like a second recession phase.  It feels a lot, at least to me, like something very very big will break this time.  I don't know what it is and I don't know where it will come from, but some times I just get very scared by all this.  And I am one of the people who have been expecting and preparing another crash.

Thu, 11/06/2014 - 14:16 | 5420335 bbq on whitehou...
bbq on whitehouse lawn's picture

I think Abe broke something he didnt intend to break. Someone got out of step in this dance and now is falling into the other dancers.

With all the 'saveing face' in the east we might not know who blew up and why, only the effect. Something unexpected happend on the 22 oct.

Thu, 11/06/2014 - 10:30 | 5419283 Salah
Salah's picture

Repeat after me (100X): "Neptune in Pisces".....etc.  

Oil & gas gets found nearly everywhere, by nearly everybody.

Thu, 11/06/2014 - 11:00 | 5419427 LULZBank
LULZBank's picture

You seem a bit mysterious, if not outright confused.

What are you peddling? :)

Let it all out...

Thu, 11/06/2014 - 11:18 | 5419512 Hohum
Hohum's picture

True enough.  But is it positive cash flow (even at $80/barrel)?  For new finds, the answer over time is more likely to be no.

Thu, 11/06/2014 - 11:39 | 5419613 Cathartes Aura
Cathartes Aura's picture

ahhh, but "Neptune in Pisces" might also hint at

imagining, hoping, day-dreaming about maybe finding "oil nearly everywhere",  with maybe "nobody" willing or able to "pay" for that oil.

ubiquitous yet un-desired, un-necessary as lives adapt to shifting tides.

what might a "new saviour" imagined look like?  who will dream up the new followers, who are waiting, begging to be inspired/led?

Thu, 11/06/2014 - 10:36 | 5419305 Calculus99
Calculus99's picture

No, the very high oil price was the prick that broke stocks, then when they tanked they took most things, uncluding oil, down with them.

This time could be the reverse!

Thu, 11/06/2014 - 09:59 | 5419153 SheepDog-One
SheepDog-One's picture

Is it good for stawks? That's all that actually matters.

Thu, 11/06/2014 - 10:05 | 5419180 post turtle saver
post turtle saver's picture

the answer is, no, it isn't... plan accordingly

Thu, 11/06/2014 - 10:01 | 5419160 Dr. Engali
Dr. Engali's picture

Darn it all to hell. Cheaper oil and less currency I have to pay at the pump. I hate it when that happens. Old Yelller better get to printing and take care of that problem stat.

Thu, 11/06/2014 - 10:04 | 5419170 Cognitive Dissonance
Cognitive Dissonance's picture

All fixed. Please bring back the 6 MPG SUV stat.

I wanna dance like no one's watching.

Thu, 11/06/2014 - 10:13 | 5419200 NoDebt
NoDebt's picture

I want a Bugatti Veyron SUV.  Believe me, I NEED a 1000+HP SUV to shuttle the kids from home, school and soccer practice.

Sadly, they don't make one.  Yet.  I believe demand would be extremely high for such a vehicle.

Thu, 11/06/2014 - 10:09 | 5419201 Winston Churchill
Winston Churchill's picture

Not to worry , you HC premiums will increse threefold any saving on gas.

They are just stealing from a different pocket.

Get to work serf.

Thu, 11/06/2014 - 10:02 | 5419164 DavidC
DavidC's picture

Come on Tylers! It was at $76 two days ago.

DavidC

Thu, 11/06/2014 - 10:02 | 5419166 Hamm Jamm
Hamm Jamm's picture

All part of their plan

Thu, 11/06/2014 - 10:02 | 5419169 LULZBank
LULZBank's picture

So finally its about demand now?

Thu, 11/06/2014 - 16:33 | 5420989 Bemused Observer
Bemused Observer's picture

Yeah, and funny thing about that...there's nothing they can DO about it. Nothing in their little bag 'o tricks for this problem.
For demand to be exercised, they have to either raise wages significantly, or lower current prices to match existing wages. Neither of which they can bring themselves to do, period.
I suppose they could, in desperation, mail out checks again, but a one-time buying spree won't fix anything. The only way to keep their game going is if THEY do the bulk of the buying, of the stuff they're trying to sell for 'profits'...Which is just stupid enough to make me think they'll try it before giving up.

Thu, 11/06/2014 - 10:04 | 5419178 wmbz
wmbz's picture

So this is good right? Less exspensive gas/fuel for the serfs?

Thu, 11/06/2014 - 10:15 | 5419220 LULZBank
LULZBank's picture

Could even be to help unwind the paper hedge (short) positions of the Oil traders, which they have been accumalating over the years to massage their numbers.

Big commodity houses have, or are, shutting down Gasoline and Biofuels trading desks and going through noticable downsizing.

And they are owned by the Tribe, so if tribe cannot make money, what chance would the mere mortals have.

Thu, 11/06/2014 - 10:19 | 5419247 McCormick No. 9
McCormick No. 9's picture

As far as my personal purchasing power index goes, oil is still above 4/gal. How 'bout you? Feelin' richer, are ye?

This is deflationary shit. That means my cash flow drops faster than prices.

Thu, 11/06/2014 - 12:36 | 5419876 gcjohns1971
gcjohns1971's picture

TRUE.

Personal anecdotal evidence:

My employer asked me to take a 40% pay cut on the new contract.   Everyone on the contract received similar requests.

Prices up, Pay down, Unemployment up, Gulags and Secret Police up = Gallows and pitchforks.

Thu, 11/06/2014 - 10:05 | 5419185 NoDebt
NoDebt's picture

I don't believe it.  A non-hockey-stick (i.e. truthful) growth forecast from...... OPEC?

The "oil guys" telling it like it is while the "debt guys" keep putting j-curve charts on everything.

Wow.  Just wow.

Thu, 11/06/2014 - 10:07 | 5419193 oak
Thu, 11/06/2014 - 10:11 | 5419203 the not so migh...
the not so mighty maximiza's picture

BUT BUT BUT BUT PEAK OIL!!!!!!!

Thu, 11/06/2014 - 10:21 | 5419255 Toxicosis
Toxicosis's picture

The peaking of oil fields has everything to do with SUPPLY not DEMAND.  You might demand something but if it becomes to expensive or difficult to extract or make what you want due to supply constraints then eventually the ride comes to a complete stop.  BUT BUT BUT BUT.......!!!!!!

Thu, 11/06/2014 - 10:11 | 5419204 ekm1
ekm1's picture

So, OPEC , OFFICIALLY" is reducing output from 30 million barrels per day to 28.2 million barrels per day

 

I think at least 5 billion barrels are in onshore/offshore storage world wide, that is a minimum of 160 days of OPEC output.

 

OPEC wants control and wants oil from storage locked up as rehypotheticated collateral to be dumped.

Just my view

Thu, 11/06/2014 - 11:20 | 5419519 Hohum
Hohum's picture

5 billion is good; that should satisfy world demand for less than two months.

Thu, 11/06/2014 - 10:13 | 5419209 buzzsaw99
buzzsaw99's picture

planet shmanet janet. [/Frank-N-Furter]

Thu, 11/06/2014 - 10:15 | 5419216 AdvancingTime
AdvancingTime's picture

In addition to manipulation by the government-financial complex other forces have converged to further distort and disconnect Wall Street from the American economy. Why American equities are rising is very important as we worked through a pre-election and post-election rally. We are experiencing a double down and let it ride mentality that has been ratcheted higher by media hype. 

Most analysts agree that money from countries with weakening currencies is flowing out of the troubled areas and the U.S. is receiving most of the benefit. The Japanese as well as many Chinese and Europeans know with so much money floating around and few safe harbors America is becoming the most comfortable option for temporary investing their money. More on why this should be viewed as a sign of instability rather than a reason to celebrate in the article below.

http://brucewilds.blogspot.com/2014/11/why-american-equities-are-rising.html

Thu, 11/06/2014 - 10:17 | 5419233 McCormick No. 9
McCormick No. 9's picture

Oil price dive will affect shale plays, and unwind shale ponzi investment.

Will bond contagion find "patient zero" in the fracking patch?

When this junk blows up, it will affect bond prices negatively across a broad swath.

How much depth does this corner of the bond market have? How long can people hold on to "trust me"'s before they mob the exits?

Thu, 11/06/2014 - 10:28 | 5419274 LawsofPhysics
LawsofPhysics's picture

Exit?  Who is actually left to exit?  All the 401k sheep are locked in.  Outside of that I see trading bots.

Thu, 11/06/2014 - 12:32 | 5419860 Monty Burns
Monty Burns's picture

"All the 401k sheep are locked in.  "

Tell me about it....

Thu, 11/06/2014 - 11:19 | 5419515 Hongcha
Hongcha's picture

McCormick; that works for this Administration and will work for the next one.  They all Kowtow to if not outright suck the Saudi ass.  Whoever thought these reptiles in office were ever American?

Thu, 11/06/2014 - 10:23 | 5419258 NEOSERF
NEOSERF's picture

Do most robots use more oil than humans?  I think not but that Tin Man got squeaky a lot

Thu, 11/06/2014 - 10:33 | 5419295 robertocarlos
robertocarlos's picture

There's a 2018?

Thu, 11/06/2014 - 10:37 | 5419313 ClowardPiven2016
ClowardPiven2016's picture

after you die from ebola you no longer consume any oil

Thu, 11/06/2014 - 13:06 | 5420044 edifice
edifice's picture

Yes, you do; they have to burn your body. Oil.  :>

Thu, 11/06/2014 - 10:47 | 5419355 THE DORK OF CORK
THE DORK OF CORK's picture

The rise in the price of oil post 1998 has everything to do with the development of the present euro supply chain which has both European and global inpacts in the use of oil ( much more Bunker fuel was needed to supply europe post 1998)

The euro entrepot  region was structured to its present absurd degree post 1990.

It began to use ever increasing amounts of previous soviet military inputs.

Now Russia is burning more oil internally again.

Russian oil demand has reached a new all time high according to the IEA and is now 400KBD above it 5 year average.

(Kersonse needed for those Bears)

 

Thu, 11/06/2014 - 10:58 | 5419419 THE DORK OF CORK
THE DORK OF CORK's picture

European rail transport of goods has been in constant decline since the euro year ( I am talking the 1970s)

 

Irish rail freight is typical of this pattern.

In 1978 ( the year before euro entry) Irish rail Commodities Conveyed by Rail (000 Tonnes) peaked.

Y1978 :  3,789

Y2012 :    567

http://www.cso.ie/px/pxeirestat/Statire/SelectVarVal/saveselections.asp

 

After 1980 ~ the internal production / consumption economy (the real economy) began to implode.

It has never recovered.

Thu, 11/06/2014 - 11:43 | 5419634 forwardho
forwardho's picture

Quick! somebody!

Blow up some more pipelines.

Must... Push... price...

Higher.

Thu, 11/06/2014 - 11:56 | 5419715 MedTechEntrepreneur
MedTechEntrepreneur's picture

Go ahead Global Elite...Soros...Obama....  Keep poking Putin like this and you will have your WW3.  And it will not turn out like you have imagined in your psycotic mind.

Thu, 11/06/2014 - 12:30 | 5419851 Monty Burns
Monty Burns's picture

Maybe they're actually looking for that war?  I note they've started attacking the Donetsk region in Ukraine again.

Thu, 11/06/2014 - 16:22 | 5420936 Bemused Observer
Bemused Observer's picture

You know, there is one foolproof way to end this bullshit quickly (or as quickly as possible...) All the so-called 99% have to do is hunker down for a year and make no unnecessary purchases, take out no loans.
The system is set up in a way that it will immediately turn and cannibalize itself. Without new money and debt coming in, all the old debt explodes.
Come to think of it, maybe we are seeing something like that. The consumer isn't able to spend anymore even if he WANTS to, and it doesn't seem like he does.

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