Crude

"In the year ahead, geopolitics likely poses the greatest potential to disrupt markets in terms of event risk. There is also the potential for geopolitical risks to intersect with economic fragility in the event of a downturn, amplifying both."

CNN Turkey, citing security forces officials, is reporting what appears to be yet another escalation in the middle east maelstrom as Turkish troops enter Iraq. So suddenly, just as the world is scrutinizing Turkey's role in the Islamic State oil trade, Ankara decides to send anti-ISIS troops across the border? Are they trying to secure the crude trade and guard the trafficking routes?

For the 13th week of the last 14, US Oil rig counts declined. Down 10 to 545 rigs, this is the lowest since May 2010 as the temporary respite in the early Fall has given way to reality and rig counts track the lagged crude price lower...

OPEC HAS AGREED TO OIL OUTPUT POLICY ROLLOVER, SETS TARGET AT 31.5 M B/D AFTER INDONESIA JOINS: DELEGATE. This increases the output limit up from 30 million but is merely reflective of the current real output from the Cartel of 31.5 million barrels. And crude is crashing, Ruble is dumping and gold is jumping.

As Reuters reports, "Israel has quietly tested ways of defeating an advanced air-defense system that Russia has deployed in the Middle East and that could limit Israel's ability to strike in Syria or Iran, military and diplomatic sources said."

• The Jobs Report Probably Won't Change the Fed's Mind on Liftoff (BBG)
• U.S. authorities look for militant links to shooters in California mass slaying (Reuters)
• Neighbors, Acquaintances Shocked That Couple Are San Bernardino Shooting Suspects (WSJ)
• ECB Fumbles the Stimulus-Baton Hand-off, Mussing Up Fed’s Plans (WSJ)
• OPEC Heads for Status Quo as Members Clash Over Crude Output Cut (BBG)
• Foreigners drawn in as fear and loathing grip China's finance industry (Reuters)

"There has been a bunch of headlines coming out of OPEC with each contradicting the other," says Petromatrix analyst Olivier Jakob. “It is difficult to trade in front of OPEC - the general consensus is for nothing, but when we get a soundbite that creates a bit of a reaction." However, once the OPEC meeting announces that, sorry Venezuela but nothing changes, expect the early upward bias to crude prices to promptly reverse.

Optimism in US equity futures appears to have returned, and as of this moment US equity futures are higher by 9 points to 2060 as the attention shifts to what, according to BofA, is truly the most important ever. It is unclear just how the algos would take a second consecutive major disappointment in a row: should today's NFP print be well below the 200,000 consensus, December rate hike odd will tumble and the EUR will surge even more after declining modestly from overnight highs just below 1.10, leading to even more losses in European equities and spilling over to the US. 

"I have been able to establish that there is a very high probability that Berat Albayrak is linked to the supply of oil by the Daesh terrorists."

Eighty-five years after the birth of French filmmaker Jean-Luc Godard, and the crude complex is acting suitably surreal today. As expected, rhetoric is ratcheting up out of Vienna ahead of tomorrow’s OPEC meeting, with the crude market shaken up like a snowglobe.

"When Russia courageously stepped into the breach we should have been applauding its willingness to confront ISIS. Instead, we continue to denigrate Russians as if they were still the Soviet Union and Putin, not Islamic terrorists, our most vicious enemy."