Crude, Stocks Soar After "Unidentified Sources" Suggest Russia-Saudi "Production Freeze" Consensus

Tyler Durden's picture

Total chaos reigns as equity market "participants" flip from manic-sellers (IMF un-growth and Italian bank bailout failure) to panic-buyers after the following headline hits Bloomberg:

  • SAUDI ARABIA, RUSSIA REACH CONSENSUS ON OIL FREEZE: INTERFAX
  • INTERFAX SAYS SAUDIS TO DECIDE ON OIL FREEZE REGARDLESS OF IRAN
  • INTERFAX CITES UNIDENTIFIED PERSON ON RUSSIA, SAUDI CONSENSUS

The initial surge reaction...

 

Saudi Arabia, Russia reached consensus on oil freeze during talks Tuesday, Interfax reports, citing unidentified “informed diplomatic source” in Doha.

Interfax cites source as saying Saudi Arabia will make final decision on freezing oil production regardless of Iran’s position

Just a day after Algeria said Russia would not agree.

And the funniest thing about all of this farce is that if this headline proves true it is merely the original agreement - in principal - but with both Saudi Arabia and Russia now producing at new record highs.

  • *RUSSIAN ENERGY MIN. DECLINES TO COMMENT ON IFX OIL TALKS REPORT
  • *RUSSIAN ENERGY MINISTRY SAYS NO COMMENT ON TALKS BEFORE APR. 17

Stocks have begun to fade the euphoria...

 

Because "repeat news" is always good for the algos...

As Bloomberg reports, Crude climbed to a four-month high in London as Saudi Arabia and Russia were seen agreeing on whether to freeze oil production.

OPEC members will meet with other major producers, including Russia, to discuss capping production in the Qatari capital on April 17. Prices climbed earlier as forecasts for lower U.S. shale production signaled the global oversupply will slowly diminish.

 

"The headlines about a Saudi-Russian agreement are obviously what’s sending prices higher," said Bill O’Grady, chief market strategist at Confluence Investment Management in St. Louis, which oversees $3.4 billion.

 

Oil has rebounded after falling to the lowest level in more than 12 years amid signs a global glut will ease as U.S. output declines. Saudi Arabia, the biggest OPEC producer, said previously it would agree to a cap only if it’s joined by other suppliers including Iran, while Kuwait said a deal can be done without Tehran’s support.

 

"Prices are also up on speculation that market tightening is underway," said Gene McGillian, a senior analyst and broker at Tradition Energy in Stamford, Connecticut. "The productivity report yesterday shows that shale production will drop. There are also hopes that a production deal will be reached at this weekend’s meeting."

ut when did "old news" ever stop a horde of rampaging machines...

 

As another short squeeze lifts Energy and materials stocks higher... As CS notes, the Energy "Short Basket" is outperforming by over 100bps this morning...e.g. CHK +27%!!

"Most Shorted" stocvks ripped...

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Global Hunter's picture

Well I wasn't going to buy any stocks today but what better reason can there be to turn me into a buyer than higher oil prices?

Serfs Up's picture

One more time:  When you are pumping flat out, as the KSA and Russia both are, then a "freeze" is just keeping things exactly as they are.

But go ahead and panic buy more stocks, Yellen, if that makes your pathetic, fragile ego feel any better.  Because, such as.

MillionDollarBonus_'s picture

I feel sorry for peak oilers.  They are so embarrassed about this oil price shock that completely took them by surprise, they seem to have disappeared and are too ashamed to show their faces. It really shows what can happen to permabears that get too carried away - they inevitably get knocked off their feet and don't know what hit them. Let this be a lesson to the other pessimists out there who continue to downplay stocks and talk up gold: your time is coming too. And so much for 'hyperinflation' that was supposed to take oil into the 200's - who would have thought we'd be trading down here all these years later? It really does highlight the ignorance and incompetence of doomer permabears.  

https://accredited-times.com/2016/04/12/the-science-of-economics-how-eco...

LawsofPhysics's picture

A little bit better MBD. So are you predicting that it will require less energy to extract oil in the future?  All stimulus is fungible my friend and eventually all those paper/digital claims will start seeking out real assets.

That cost of living just keeps going down right?

LOL!  

MillionDollarBonus_'s picture

Maybe it will require less energy to extract oil if extraction technology improves sufficiently. Your mistake is to assume you have a crystal ball that is smarter than the market. If you are so much smarter than the market, how come you peak oilers are so wrong all of the time?

css1971's picture

Actually Peak Oilers are and were very aware that the process of peaking would cause demand destruction, subsequent collapses in price and generally large volatility in price.

Example being whale oil and bone used during the 19th century.

http://www.theoildrum.com/node/3960

 

MillionDollarBonus_'s picture

But it's an excess of supply that is causing this oil price shock, not a lack of demand. Try again. 

Bill of Rights's picture

As if you were in...please. Only a fake trader remarks after the fact, wheres your call loser....

Oldwood's picture

It is the desperation of the traders...their funds, seeking profit anywhere they can. Reminds me of a starving pack of wolves chasing every hint of flesh.

We think of panic on the sell side but with so many funds requiring very positive returns to stay afloat, they will jump at anything. After all, the risk of losing it all is no greater than simply failing to perform. Its not their money.

HedgeAccordingly's picture

Glut glug glug. Anyone who benefited was long vol in crude options. Saudi King visiting Turkey..http://hedgeaccordingly.com/2016/04/saudi-king-salman-nixes-egypt-visit-...

KnuckleDragger-X's picture

Follow the money over the cliff.......

BullyBearish's picture

It's all about one word: F*&^ing Banks!

brada1013567's picture

I was just thinking USD.JPY is not helping time for freeze talk.

XAU XAG's picture

Late April fools joke for the algos 

Keltner Channel Surf's picture

It seems the fact that most indices were at or near their crucial 20EMAs at the time was just as crucial in the bounce.  However, if oil is less imp as today's driver, then we'll see a "double touch" dump back toward the lows, where "it's all solved" dorks will need to defend ...  like solving an equation with 11 variables, with the Fed school marms standing over you with a ruler at the ready to smack away ...

brada1013567's picture

The question is what happens if this is BS and Doha is a complete zero.

 

Who besides algos believes Interfax. 

Keltner Channel Surf's picture

Well, dividing by zero yields infinity, so stocks will ramp, they win either way . . UNLESS the double-touch I referred to occurs, and doesn't hold ... but on this volume?  But, you never know . . . the close of the 11:00 candle will be a battlefield ...

 

EDIT:  CORRECTION - not a candle, it ended up being a flagpole, Virtu's crest flying from the top, perfect for hanging intraday shorts from.

Now what?  If the machines have a sense of humor, we'll re-dump, now THAT would be a divine comedy ...

KnuckleDragger-X's picture

Well, dividing by zero yields infinity...

 Yep, but in which direction?

brada1013567's picture

Negative rates and negative infinity....

Keltner Channel Surf's picture

Both directions in a single day, this is the fine 'liqudity' that allows firms like Nomura to prosper, and those of us that trade to have an easy time of it :)

Traderone's picture

The ES was right at yesterdays lows when the news hit the tape, what do we care eh? :)

Keltner Channel Surf's picture

Yes, T1, without question this was staged, all indices bouncing in pure Quant 101 fashion from 20EMAs just as a headline is conveniently released, coincidences like that just don't happen in real life, and markets have been unreal for years now ...

Nobody For President's picture

Love yah Keltner, your comments keep me more or less sane as I watch this shit show. Ess and P went below the magic 2043 before the announcement, but all is now well, it's at 2057 or some such shit.

Long live the Fed, may it keep us away from real markets and price discovery forevha!

DoHA! DoHA!

Keltner Channel Surf's picture

Thank you, Sir, I'll be awaiting your eBook on how you managed to remain sane.  I've obviously failed in that endeavor but, thankfully, ZH-ers are quite accepting of this requisite flaw traders all possess ...

BeaverCream's picture

This is getting hilarious.

Sky flyer's picture

This won't hold. They are running out of options and bs headline jawboning.

JamaicaJim's picture
Several hours ago on ZH; Oil Strategist: "Doha Freeze Talks, If Anything, Look Bearish For Oil"

I guess fucking NOT!

Bill of Rights's picture

As I said perfect contrarian indicator

runningman18's picture

When the Doha talks are over then we can talk about what is bearish and what is not.

Sky flyer's picture

Douche bank is going...going....wait for it.

RadioFlyer's picture
RadioFlyer (not verified) Sky flyer Apr 12, 2016 10:55 AM

Huma?  Is that you?  Clinton will be upset.

Winston Churchill's picture

In other news:

Geofrey Dahmer was a vegetarian.

Huckleberry Finn from Texas's picture
Huckleberry Finn from Texas (not verified) Apr 12, 2016 10:46 AM

The market is much tighter than it appears.

Emergency Ward's picture

Damn.  I missed my chance to buy the freakin' dip.

101 years and counting's picture

"only" over producing 2-3MB everyday is bullish for oil.  hurry and buy so they can then return the oil to the ground in 3 months when there is no where to put it.  what a fucking joke.

jubber's picture

BUT they already agreed to freeze ages ago in January..this is a non statement

misalkin's picture

But they BROKE that promise from January :) Now it will be different :P riiiight

Jayda1850's picture

Fundamentals seem to have been declared extinct. Now everything trades on rumors, hearsay and innuendoes. Only because the elite know they can only control the latter.

Grandad Grumps's picture

... and you just woke up to this, when?

I think the way it actually works is that they choose the price and then make up the excuse afterwards.

bada boom's picture

This thing must be getting tired.  Should of driven the markets up at least 200 points.  Be careful.

 

OMG, WTF WTF WTF 10:50 edit

Did the US just devalue the Dollar, 10:53 edit

misalkin's picture

Didn't Russia promis same deal like 2 time already, and after month or so it was found out that russia did keep on pumping even more :)

coast's picture

Hey misalkin...I have a question tho...because the mainstream media (and even zerohedge who sometimes mimics mainstream says that Russia/Putin said something, does it mean its true?   I mean, they told us that Russia invaded Ukraine...maybe its all a matrix?  Maybe Russia never agreed to anything?   Its all to control the price of oil?  maybe?

Francis Marx's picture

Maybe they are finally wising up and realized its in their interest to just lie about freezing oil production

Lastline's picture

The news seems like it was fabricated to breach the 200 day SMA.  The timing was impeccable.

Francis Marx's picture

No acually its because it had a daily close above 39.85. I put in extra longs before the close yesterday. Next stop $45 after chopping threw the 41-42 area

thismarketisrigged's picture

yesterdays meeting between cunt and muslim was basically for the cunt to assure the muslim that evevryday until his term is up, she will make up some bullshit rumor on oil so stawks can surge and they can use that as the excuse.

 

 

skbull44's picture

At what point does the media clue into their role in propagating endless lies?

Oh, forget it...that was a stupid question.

http://olduvai.ca