Iran

"[Kerry employs] an absolutely upside-down logic and [it's] yet another attempt to appease those who use terrorists to fight dissenting regimes. We are always in favor of military people talking to each other in a professional way. They understand each other very well. If, as he has said many times, the United States wants those channels frozen, then be our guest."

"One-by-one, the oil-majors will start to participate, then others will follow. While it might take some time to establish itself due to choppy markets and regulatory hurdles as well as the fact that it would introduce a foreign exchange element to crude futures, it is overdue for a Chinese contract to established."

"While we are increasingly convinced that the market needs to see lower oil prices for longer to achieve a production cut, the source of this production decline and its forcing mechanism is growing more uncertain, raising the possibility that we may ultimately clear at a sharply lower price with cash costs around $20/bbl Brent prices."

Presented with no comment...

With Saudis blowing off an OPEC leaders meeting, Iran slashing prices to 3 year lows inventories rising rapidly but US production dropping quickly, and Goldman calling for $20 oil possible, it has been a busy (and mixed) week for oil news. Add to that the seasonal lull amid refinery slowdown/repairs and Today's 10 rig drop in US oil rig count to 652 (following last week's 12 rig drop) is the biggest 2-week drop in 4 months just adds to the noise with Texas rig count dropping most (-9 to 366). Crude prices are rising modestly as US rig count drops back to 2-months lows.

• One Volatile Week Could Seal Fed Stance After Years of Low Rates (BBG)
• Fed to dominate week of central bank meetings (Reuters)
• 30 years on, parallels with Plaza but currency universe very different (Reuters)
• Wal-Mart's Suppliers Are Finally Fighting Back (BBG)
• China's Rising CPI, Deepening PPI Deflation Challenges PBOC (BBG)
• Petrobras spending plan already obsolete, new cuts likely (Reuters)
• Bank of Montreal to Buy GE Capital’s Transportation-Finance Unit (WSJ)

The latest twist in what we have been warning for months has the makings of the biggest proxy shooting war in years, one that will come as a major humiliation to the Obama administration, today we find out that none other than America's most recent diplomatic sweetheart in the Gulf region, Iran, has deployed ground soldiers into Syria in the past few days in cooperation with Russia's President Vladimir Putin.

In what appears to be a bid to lure Asian buyers to lock in longer-term supplies, Reuters reports that Iran has cut its quarterly selling price (for its flagship 'light' crude) to its lowest (relative to Saudi) since Q4 2012. According to recent tanker loading data, Iran's oil sales in September are set to hit a six-month low, and this price reduction is just one of the steps taken by the OPEC producer to ramp up output and regain market share lost since U.S. and European sanctions aimed at its nuclear program cut its crude oil exports by more than half.

Don’t let anyone fool you: As we have detailed since 2013, sectarian strife in Syria has been engineered to provide cover for a war for access to oil and gas, and the power and money that come along with it.

Five Chinese navy ships are currently operating in the Bering Sea off the coast of Alaska, the Wall Street Journal reported Wednesday, marking the first time the U.S. military has seen them in the area. Why the sudden interest? Because the Chinese have been studying the cycles. From generational theorists William Strauss and Neil Howe, they have learned that political/cultural cycles last only 65 years, and then they collapse, cycles first observed by Taoist monks and Roman philosophers. And China is exactly 66 years advanced since the Chinese Communist Revolution of 1949. In terms of generational cycles, China is on the eve of destruction. (In terms of the Strauss/Howe theory, so are we.)

“Sooner or later, everyone sits down to a banquet of consequences..." – Robert Louis Stephenson

So if you really want to make “refugees” the election issue “du jour”, one can waste a lot of time watching the mainstream incumbent parties bicker over the “right” number of refugees to allow into Canada or how much taxpayer money to throw at aid, or even whether more Canadian “boots on the ground” should be headed over there on various “peace keeping” escapades... or, you could ask the really hard hitting questions...

Now that Europe's migrant crisis is making international headlines on a nightly basis, France and Britain are set to use the influx of aslylum seekers as a pretext for airstrikes in Syria. The timing could not be more convenient as new "intelligence" suggests that Russia is expanding its presence in the Assad stronghold around Latakia. For its part, Germany is out warning the Kremlin against "military engagement."

• Global stocks rally as investors scent fresh stimulus (Reuters)
• Japan's Nikkei 225 Rises 7.7% for Biggest Gain Since October 2008 (BBG)
• China's Stocks Advance for Second Day Amid Stimulus Speculation (BBG)
• Abe Pledges Corporate Tax Cut as Investments Slump (BBG)
• U.S. to shift 50 staff to boost office handling Clinton emails (Reuters)
• Chinese Premier Li Keqiang Says China Doesn't Want a Currency War (BBG)
• One Thing China Got Right (BBG)

The prosecution of a Swedish national accused of terrorist activities in Syria has collapsed at the Old Bailey after it became clear Britain’s security and intelligence agencies would have been deeply embarrassed had a trial gone ahead, the Guardian reported.  "The prosecution abandoned the case, apparently to avoid embarrassing the intelligence services. The defence argued that going ahead with the trial would have been an “affront to justice” when there was plenty of evidence the British state was itself providing “extensive support” to the armed Syrian opposition. That didn’t only include the “non-lethal assistance” boasted of by the government (including body armour and military vehicles), but training, logistical support and the secret supply of “arms on a massive scale”."

News That Matters