Crude Oil

George Osborne is giving the Mansion-House (residence of the Lord Mayor of London) speech to the city tonight, an annual speech in which the Chancellor of the Exchequer traditionally gives his impression of the state of the British economy.

The 20th century could be categorized as THE century when communications took off and we started living in each other’s pockets. Lives had been ruined by war, trouble and strife. Wealth had been redistributed beyond belief. There were no longer just a few that were making the profits, but there were growing classes of people that wanted recognition.

President Barack Obama stated yesterday that Federal Reserve Chairman Ben Bernanke has stayed in his position “longer than he [Bernanke] wanted”. Some will be probably agreeing with Bernanke (and Obama) more than he might have expected after having said that. Although he should have stopped short of adding (for fear of hurting Helicopter Ben’s feelings?) that he has done an “outstanding job”.

A mixed picture is starting to emerge from the Middle East in terms of oil production. Several members of the 12-member OPEC oil cartel are embroiled in turmoil or struggling to ensure post-war political gains. Oil production from the Middle East declined by 1.5 million barrels per day in 2009. Production from most Middle East countries has slowed down or leveled off, though gains from Iraq have offset some of those declines. With economic recovery seemingly on the horizon, a new OPEC may be developing from the ashes of the recession.

China! Honestly, it comes to something when China jumps on the accusatory band-wagon asking the US administration to provide some comments about its monitoring programs and answer up to the international community.

Iran is a right old sorry state (of affairs).  Plunged into recession, inflationary pressure that Abenomics wouldn’t mind having a bit of and Bernanke might just be getting if he carries on printing the greenbacks at the rate they are churning out of the Federal Reserve faster than a Ford-T in 1908.

The summit opens today for two days of public display of back-slapping and hand holding, championing the things that the west does best. The summit was preceded yesterday by the parading of 8 life-size puppets with huge heads to draw attention to poverty levels in the world.

Stock-market crashes saw the light of day more and more as the world became industrialized. The 19th century saw a rapid increase in their numbers.

Amid the Syria debacle (or growth 'hope' if you are a true believer), the price of a barrel of WTI crude oil just topped $98 - its highest since September of last year. The bad news for all those that 'consume' is that this level of crude suggests the price at the pump will be hitting $3.80 - that elusive P/E expansion-ending level - very soon.

"Information about the usage of chemical weapons by Assad is fabricated in the same way as the lie about Hussein's weapons of mass destruction.” Alexei Pushkov, head of the Russian lower house of parliament’s international affairs committee, said on Twitter.

This was one helluva week. Nevertheless current markets are still hooked on QE.

• Reports on surveillance of Americans fuel debate over privacy, security (Reuters)
• Apple to Yahoo Deny Providing Direct Access to Spy Agency (Bloomberg)
• Misfired 2010 email alerted IRS officials in Washington of targeting (Reuters)
• Spy vs Spy: Cyber disputes loom large as Obama meets China's Xi (Reuters)
• When NSA Calls, Companies Answer (WSJ)
• How the Robots Lost: High-Frequency Trading's Rise and Fall (BBG)
• Japan's Pension Fund to Buy More Stocks  (WSJ)
• ‘Frankenstein’ CDOs twitch back to life (FT)
• China’s ‘great power’ call to the US could stir friction (FT)
• Toyota Tries on Corolla Look That’s Just Different Enough (BBG)

More than 97,000 rail carloads of crude oil were delivered in the United States during the first quarter of the year.That's 20 percent more than the fourth quarter of 2012 and 166 percent more than during the same period last year. Rail shipments of grain, metallic ores and minerals declined, however. Oil companies are moving more of their oil by rail because pipeline capacity can't keep up with North American production gains. Last week, a pipeline planned from Texas to California was shelved because of the lack of shipper interest, though for rail, there's been relative surge in crude oil traffic. It remains to be seen if that can be sustained, however. The debate over pipelines versus rail hinges on access, price and reliability.

There is energy independence, and then there are crude oil imports, which according to just released and revised Census data, amounted to 233,215 thousand barrels in April, and 914,456 thousand barrels year to date (just under 3 billion annualized). For those unaware who the most important US crude oil trading partners are, here is the updated list of the main countries that serve to fuel America's industrial infrastructure and its engines, in the off chance that the Tesla electric revolution fails to deliver.

•     550,000 SPY shares
•     10,000 June 2013 eMini futures contracts
•     1,400 Nasdaq 100 futures contracts
•     800 Dow Jones futures contracts
•     350 Russell 2000 futures contracts
•     125 S&P 400 Midcap futures contracts
•     300 Crude Oil futures contracts
•     900 Dollar Index futures contracts
•     800 Gold futures contracts
•     10,000 10yr T-Note futures contracts
•     2,500 5yr T-Note futures contracts
•     3,500 T-Bond futures contracts
•     5,000 Eurodollar futures contracts
•     750 Japanese Yen futures contracts
•     600 Euro futures contracts