Crude Oil

These Are The Two Most Important Questions Facing The Market

The two most important questions by far, those whose answer will determine not only the near term return of the S&P, but also global equity markets as well as that all-important commodity, oil, are the  following: Can the oil price hold up even as the dollar rises;  and, Can the CNY depreciate without hurting asset prices? Here is Deutsche Bank's attempt at an answer.

The Fascinating Story Of How The Petrodollar Was Born And Lived In Secrecy For Over 40 Years

For decades, the story of Saudi Arabia recycling US petrodollars, i.e., funding the US deficit by buying US Treasuries with proceeds of its crude oil sales (mostly to the US), while the US sweetened the deal by providing the Saudis with military equipment and supplies, remained entirely in the conspiracy realm, with no confirmation or statement from the US Treasury department. Now, that particular "theory" becomes the latest fact, thanks to a fascinating story by Bloomberg which lays out the history of how the petrodollar was born...

Futures Flat, Gold Rises On Weaker Dollar As Traders Focus On OPEC, Payrolls

After yesterday's US and UK market holidays which resulted in a session of unchanged global stocks, US futures are largely where they left off Friday, up fractionally, and just under 2,100. Bonds fell as the Federal Reserve moves closer to raising interest rates amid signs inflation is picking up. Oil headed for its longest run of monthly gains in five years, while stocks declined in Europe.

CEO Of Asia's Largest Commodity Trader Unexpectedly Resigns

We have tracked the problems of recently junked Noble Group - Asia's largest commodity trader - extensively over the past year. Then, moments ago things finally turned serious for the company, announced moments ago on the Singapore stock exchange, not only is CEO Alireza resigning, to be replaced by William Randall and Jeff Frase as co-CEOs, but the company will also begin the sale process of its Noble Americas Energy Solutions, one of its star assets, in a deal that will generate "significant cash proceeds", which is the best confirmation just how desperate for cash the company truly is.

Forget Chinese Commodity Speculators, Meet North America's "Moms-and-Millennials" Oil Day-Traders

We showed you the "bored" Chinese workers who traded commodity futures for excitement - Now, it's time to meet North America's oil day-traders... moms-and millenials. The recent volatility in crude oil has gotten the attention of people who do not list trading as their day job, but are randomly attempting to day trade oil anyway...“I just thought, let’s throw a couple of hundred dollars in it...and try it out...I just enjoy the risk and the thrill of the market in general.”

This Week's Main News From The Oil Sector

For those who need a quick and easy recap of all the main events that took place in the oil and gas services sector, here it is courtesy of Credit Suisse's James Wicklung who present the various "things we've learned this week."

Frontrunning: May 27

  • Oil prices ease from seven-month high to below $49 (Reuters)
  • Wall Street Waits for Yellen Before Taking Off for a Long Weekend (BBG)
  • Donald Trump Celebrates Clinching GOP Delegate Race (WSJ)
  • Trump vows to undo Obama's climate agenda in appeal to oil sector (Reuters)
  • Japan Fails in Bid to Have G-7 Warn of Global Crisis Risk (BBG)
  • Valeant Rejected Joint Takeover Approach From Takeda, TPG (WSJ)

All Eyes On Yellen: Global Markets Flat On Dreadful Volumes, Oil Slides

In a world where fundamentals don't matter, everyone's attention will be on Janet Yellen who speaks at 1:15pm today in Harvard, hoping to glean some more hints about the Fed's intentionas and next steps, including a possible rate hike in June or July. And with a long holiday in both the US and UK (US bond market closes at 2pm today), it is no surprise overnight trading volumes have been dreadful, helping keep global equities poised for the highest close in three weeks; this won't change unless Yellen says something that would disrupt the calm that’s settled over financial markets.

Does The U.S. Have A Plan For The Post-Oil Era?

The world's largest exporter of crude oil, the Kingdom of Saudi Arabia, recently announced a plan for its post-oil future. If a country almost synonymous with the oil economy can see the need for such a plan, how can the rest of the world, particularly the United States, the world's largest consumer of petroleum, not see the necessity of such foresight?

Losing Ground In Flyover America

The Fed’s paint-by-the-numbers Keynesian incrementalism leaves it blind to the underlying rot in the US economy and to drastically over-estimate its capacity to maintain a stable growth equilibrium. In fact, corporate America is being strip-mined by Fed-fueled financial engineering and flyover America is sinking irretrievably into debt, dependency and shrinking living standards.

"The Freeze Is Finished" - Why Did Saudi Arabia Kill OPEC?

The OPEC meeting is only a week away, but the chances of a positive result are as remote as ever. Rising oil prices, the heightened rivalry between Saudi Arabia and Iran, and Saudi Arabia’s willingness to go it alone will make a deal all but impossible. "I don't think OPEC will decide anything," a source from a major oil producer in the Middle East told Reuters. "The market is recovering because of supply disruptions and demand recovery." An OPEC delegate told Reuters that any changes to the cartel’s policy is off the table. “Nothing. The freeze is finished,” the OPEC source said.

Saudi Officials Crackdown On FX Market As Currency Peg Starts To Strain

As we warned previously, the devaluation, or breaking of the Saudi Riyal peg to the dollar, could be the black swan event for crude oil and the recent weakness in SAR forwards - while not as violent as Nigeria's Naira - certainly signals a renewed market fear that breaking the peg is imminent. It appears Saudi officials are none too pleased with the free markets speculating on this devaluation and as Bloomberg reports, banks in Saudi Arabia are coming under fresh pressure over products that allow speculators to bet against the kingdom’s currency peg, according to people with knowledge of the matter, which were supposedly banned in January.