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*MW Chesapeake surges to close up 14.1% as oil spikes
*MW Energy names, Apache, Consol, each up at least 6%, among top S&P gainers
*MW S&P 500 energy sector jumps 2.8%
Who Wins If America's Oil Export Ban Is Squashed?
dj article now, no link since from broker feed.
House Republicans plan on voting in the next couple of weeks on a bill that would lift the ban on U.S. oil exports.
It’s unclear if the bill will gain enough support from congressional Democrats to pass.
Elimination of the export ban would be good news for E&Ps and bad news for refiners and U.S. drivers.
The massive crude oil supply glut in the United States once again has Washington debating the elimination of the 40-year-old national ban on crude oil exportation. Republicans in the House of Representatives announced Tuesday that they plan to vote to remove the ban in coming weeks. If the ban is eventually repealed, the change could provide much-needed relief for struggling oil stocks.
Does It Have The Votes?
The bill’s chief sponsor, Texas Rep. Joe Barton , hopes that he can get all of the Republican House members and at least 20 Democrats to support the bill.
“This is a policy decision that is made over at the Commerce Department , and for that reason we wouldn’t support legislation like the one that’s been put forward by Republicans,” White House spokesman Josh Earnest said in response to news of the vote.
Who Wins?
Several years ago, it was unimaginable that the US would consider lifting the ban on oil exports. However, the U.S. shale production boom and the subsequent crash in oil prices has put the industry in a difficult situation.
The obvious potential beneficiaries of a repeal of the export ban are the more than a dozen oil companies that have aggressively lobbied Congress to lift the ban over the past year, including Continental Resources Inc (NYSE: CLR), ConocoPhillips (NYSE: COP) and Marathon Oil Corp (NYSE: MRO).
In a 2014 report, S&P said that exploration and production companies with exposure to Eagle Ford Shale would be the biggest winners from elimination of the export ban. These companies include EOG Resources Inc (NYSE: EOG), Pioneer Natural Resources Co (NYSE: PXD), Anadarko Petroleum Corp (NYSE: APC), Devon Energy Corp (NYSE: DVN) and Marathon.
Who Loses?
Many U.S. refiners would likely see shrinking margins as well. PBF Energy Inc (NYSE: PBF) has led a coalition of four refiners that have recently been lobbying Congress in opposition to elimination of the export ban.
At The Pump
Could car-driving Americans be impacted? According to a study by the U.S. Energy Information Administration , probably not.
“Petroleum product prices in the United States , including gasoline prices, would be either unchanged or slightly reduced by the removal of current restrictions on crude oil exports," the report concluded.
Separately, Barton recently told CNNMoney that, "It doesn't raise gasoline prices. It puts people back to work."
Disclosure: the author holds no position in the stocks mentioned.
Rest of World Rig Additions Surpassed US Rig Additions in August
rochet hmm WTI could go > Brent as has happened in past. A thought.
http://finance.yahoo.com/news/rest-world-rig-additions-surpassed-150735676.html
US versus global rig count
According to estimates by Baker Hughes (BHI), the total number of active rigs in the rest of the world currently exceeds the US rig count. On average in August 2015, there were 883 active rigs in the United States compared to a combined 1,343 rigs in Africa, Asia–Pacific, Canada, Europe, Latin America, and the Middle East.
In February, the US rig count started falling behind the rest of the world’s rig count for the first time since 2009. It has been below the world’s count for the past seven months. Between 2009–2014, US rigs surpassed the total number of international rigs in operation by an average of 190, or 12%.
Rig count comparison
The United States still has more rigs than any other country in the world. The Middle East is a distant second, with 393 active rigs in August 2015. That month, the Middle East’s rig count increased by two from July’s figure. Latin America comes in third, with 319 active rigs recorded in August 2015.
The US rig count dropped from higher levels compared to the rest of the world in the past seven months. This is a strong indication of the negative effect weak energy prices are having—and will continue to have—on the American shale boom.
MW U.S. jobs growth not making a dent in poverty
By Josh Zumbrun
The U.S. poverty rate was unchanged at 14.8% in 2014, according to a release today from the Census Bureau . This was the fourth consecutive year that the poverty rate was not statistically different from the previous year.
The lack of change shows that the progress in the U.S. job market--in 2014 the economy added 2.6 million jobs, the most in more than a decade--have remained insufficient to lift the fortunes of the nearly 47 million people living in poverty.
The official definition of poverty varies depending on the size, age and composition of the family. For a couple with no children under age 65, the threshold for income below which they are considered in poverty is $15,853 . For a couple with two children, the threshold is $24,008 .
An expanded version of this story is available at WSJ.com (http://blogs.wsj.com/economics/2015/09/16/u-s-job-growth-not-making-a-dent-in-poverty/)
- Josh Zumbrun ; 415-439-6400; AskNewswires@dowjones.com
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09-16-15 1047ET
Prez cycles hmm
Used to read those stats too. Pretty much does follow a pattern like you stated. Not certain is 100% on 8th year of 2 year term but darn close. Especially gets tight as months leading up to Election when both parties are quite close (as lately).
Implies flat first 2 Qtrs then messy. Have to see if any reports come out about this condition. Trump being a sort of third party guy can be a factor until Reps decide. If Reps don't take him and he goes third dog then really gonna be super wild since Dems aren't as usually tight as in past. Without a solid Obama like lock, the Hill gonna be uphill.
Funny thing is that in my part of liberal Manhattan there were tons of Obama stickers on cars, windows, poles, etc. but so far few for Hill. Maybe too soon.
General economy will be big factor. Ruling party often goes hyperdrive last year hoping to get their person in. Pocket book will rule this time.
Crude DOE # EIA, Cushing
and CNBC reporter from floor said oil forming pennant, bullish. Refinery seasonal changeover time.
10:32 News Bot: US DOE U.S. Crude Oil Inventories (11-Sep) W/W -2104K vs. Exp. 2000K (Prev. 2570K); US crude output fell by 0.197% to 9.117mln bpd, according to the EIA
- US DoE Cushing OK Crude Inventory (Sep 11) W/W -1906K vs Exp. -311K (Prev. -897K).
- US DoE Gasoline Inventories (Sep 11) W/W 2840K vs. Exp. -500K (Prev. 384K).
- US DoE Distillate Inventory (Sep 11) W/W 3060K vs. Exp. 300K (Prev. 952K).
- US DoE Refinery Utilisation (Sep 11) W/W 2.20% vs. Exp. -0.55% (Prev. -1.90%)
(U.S. Department of Energy)
Crude DOE # EIA, Cushing
and CNBC reporter from floor said oil forming pennant, bullish. Refinery seasonal changeover time.
10:32 News Bot: US DOE U.S. Crude Oil Inventories (11-Sep) W/W -2104K vs. Exp. 2000K (Prev. 2570K); US crude output fell by 0.197% to 9.117mln bpd, according to the EIA
- US DoE Cushing OK Crude Inventory (Sep 11) W/W -1906K vs Exp. -311K (Prev. -897K).
- US DoE Gasoline Inventories (Sep 11) W/W 2840K vs. Exp. -500K (Prev. 384K).
- US DoE Distillate Inventory (Sep 11) W/W 3060K vs. Exp. 300K (Prev. 952K).
- US DoE Refinery Utilisation (Sep 11) W/W 2.20% vs. Exp. -0.55% (Prev. -1.90%)
(U.S. Department of Energy)
Floor Trader: yesterday, GS $20 wrong
Floor Trader: Why Goldman Is Wrong (Again) On $20 Oil Prediction
http://finance.yahoo.com/news/floor-trader-why-goldman-wrong-115821252.html
Platts sees EIA -200K barrs after -3.1M API
And Zaner outlook day
CURRENCIES: Dollar upside momentum to continue for 24-36 hours
ENERGIES: Higher off of surprise inventory draw, focus on weekly EIA stats and US crude oil production.
----------------------------
09:18 AM EDT, 09/16/2015 (MT Newswires) -- Oil futures are significantly higher Wednesday morning, after late Tuesday the American Petroleum Institute reported a 3.1-million-barrel decline in U.S. commercial oil inventories last week.
Oil futures were last up 2.4% at $45.65 a barrel as traders await the release of the U.S. Energy Information Administration's (EIA) latest inventories data for confirmation of a large inventory decline. The EIA data is more highly regarded than the API data. Analysts polled by Platts expect U.S. crude stocks fell by 200,000 barrels in the prior week.
Oil traders will also be paying close attention to the Fed's two-day meeting, which starts today.
http://www.mtnewswires.com Copyright © 2015 MTNewswires. All rights reserved. MT Newswires does not provide investment advice. Unauthorized reproduction is strictly prohibited.
Couple In'tl hot spots Syria & N. Korea
Potential to go boom. Also LNG, XOM had decent day, XOM climbed eod.
Russian Military Buildup in Syria Concerns U.S. Officials
WASHINGTON --Russian forces have delivered half a dozen tanks to an airfield in Syria , the strongest indication yet that Moscow is preparing to transform the strategic coastal compound into a new military hub to help President Bashar al-Assad , U.S. officials said.
Over the weekend, American officials said, six T-90 Russian tanks arrived at an airfield south of the Syrian port city of Latakia, where Russia's military has embarked on an intensive buildup.
The steady arrival of more military gear at the base has solidified concerns in Washington that Russia is preparing to play a more muscular role in the Syrian war, one that could complicate both America's fight against Islamic State and its attempts to foster a diplomatic solution to the conflict.
The Assad regime has suffered a series of setbacks recently in the multi-sided war now in its fifth year. Mr. Assad made an unusually frank admission in June that his military was unable to hold on to some parts of the country because the forces have been depleted by desertions and defections.
With an average of two Russian cargo planes flying into Syria each day, U.S. defense officials said there is a growing consensus that Moscow is preparing to bring in Russian fighter jets that could be based at the coastal airfield and conduct airstrikes to help Mr. Assad beat back Islamic State and other rebel forces trying to topple him.
Along with the tanks, Russia has sent three dozen armored personnel carriers, about 15 new artillery pieces, and housing that could accommodate as many as 1,500 people, the officials said.
The pace is moving so quickly, officials said, that the airfield could be ready to host Russian fighter jets by month's end.
Russia has played down the importance of the military deliveries and cast them as part of its long-standing support for Mr. Assad.
"The arms transferred to the Syrian army are designed for countering the terrorist threat," said Maria Zakharova , a spokeswoman for Russia's foreign ministry."
Mr. Assad's forces, she said, "bear the brunt of fighting the Islamic State on the ground."
President Barack Obama last week warned Russia that it was making a mistake by aiding Mr. Assad.
U.S. officials worry that American jet fighters could end up confronting Russian pilots over Syrian airspace, or that Russian airstrikes could target Syrian rebels backed by the U.S.
Capt. Jeff Davis , a Pentagon spokesman, said the U.S. would welcome Russia's direct involvement in battling Islamic State extremists in Syria , but not if it is done in coordination with Mr. Assad.
"We welcome Russia participating in the global anti-ISIL efforts, but to do that via the Assad regime is unhelpful and potentially destabilizing, " he said.
That concern was echoed by John Kirby , a spokesman for Secretary of State John Kerry , who said that sending more arms to help Mr. Assad wouldn't help Syria .
"We know, and the Russians have indicated that they know, that there has to be a political transition away from Assad in Syria ," Mr. Kirby said at a news briefing. "The way to get there is not by propping him up militarily, and giving him more fire power."
Later, under questioning from reporters, Mr. Kirby said that while Moscow agrees on the need for a political transition, it continues to support Mr. Assad.
The port city of Latakia is the capital of a province of the same name that is a political stronghold for Mr. Assad and his minority Alawite sect--an offshoot of Shiite Islam. The coastal region offers Russia vital access to the Mediterranean Sea and Russia has a naval base in the port city of Tartus, about 60 miles south of Latakia. Many believe the Syrian president would try to take refuge in Latakia if the capital Damascus fell to regime opponents.
Russia has been one of Mr. Assad's strongest international supporters, and Moscow will play a central role in steering the course of the conflict toward a potential diplomatic deal or a more deadly conflict.
Washington has sought to isolate the Assad regime diplomatically while developing Syrian rebel forces that have so far proved largely ineffective on the battlefield.
The Russian planes are using a new air route over Iraq , after Bulgaria rejected a request from Moscow last week to fly the cargo over its airspace, U.S. officials said.
In their Syria airlift, the Russians have followed established civil-aviation routes, making it harder for the U.S. to exert any over pressure either directly on Moscow or on the overflight countries.
"We've been in touch with all of our allies, partners and friends in the area to encourage them to ask hard questions about who and what is flying through their airspace," Capt. Davis said.
Write to Dion Nissenbaum at dion.nissenbaum@wsj.com and Philip Shishkin at philip.shishkin@wsj.com
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------- SEOUL -- North Korea said it was in the "final phase" of developing a new satellite, fueling speculation it would launch a long-range rocket as early as a major political anniversary next month.
Such a move would ratchet up tensions on the peninsula because the isolated country is banned by the U.N. Security Council from testing ballistic rocket technology. While Pyongyang says its long-range rocket launches are for peaceful purposes, the U.S. and other countries see them as part of an effort to develop an intercontinental missile capable of delivering a nuclear warhead.
North Korea celebrates the 70th anniversary of the founding of its ruling Workers' Party on Oct. 10 , an event that outside observers may be marked by a long-range rocket firing. South Korea's foreign minister said last week a launch is possible, although analysts who have studied recent satellite images say there are no clear signs of preparations for a launch at Pyongyang's main long-range rocket base.
The director of North Korea's space agency said scientists are "pushing forward at a final phase [for] the development of a new earth observation satellite," according to a report published late Monday by Pyongyang's state news agency.
"The world will clearly see a series of satellites...soaring into the sky at the times and locations determined by the WPK Central Committee," said the director, who wasn't named said, according to the report.
In response to the report, a U.S. State Department spokesman noted that multiple U.N. Security Council resolutions require North Korea to suspend all activities related to its ballistic missile program.
"Any satellite launch using ballistic missile technology would be a clear violation of those resolutions," John Kirby said at a regular news briefing.
North Korea successfully tested a long-range rocket in December 2012 , delivering an object that it said was a satellite into orbit around the earth. Experts confirmed the presence of the device but failed to pick up any communications signals from it.
Two months later, North Korea staged its third test detonation of a nuclear bomb. U.S. and other government officials see North Korea's nuclear tests as an effort to produce a weapon small enough to mount on an intercontinental ballistic missile. Senior military figures in Washington believe Pyongyang may have already mastered such technology.
The U.N. Security Council increased sanctions on North Korea in the wake of the latest rocket and nuclear tests, but Pyongyang has pledged to continue launching rockets and building up its nuclear arsenal. During times of military tension, North Korea claims it can hit the continental U.S. with a long-range missile, adding to concerns that the rocket program is intended to give it a new threat.
Write to Alastair Gale at alastair.gale@wsj.com
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Chinese consumers/travelers choke on wealth
Have to wonder where fresh 100% demand gonna come from. Reminds me of all those malls built in US pre 2008. China has those empty towns/malls true, but looks to be growing as some fatigue sets in.
Chinese Open Luxury Wallets for Europe
PARIS--Outside Galleries Lafayette's flagship department store here, 26-year-old Chong Jing stands with his family from the coastal Chinese city of Qingdao , eager to splurge.
Chinese bus tour groups crowd the store's entrances from the street. Inside, the Louis Vuitton and Chanel boutiques are so full of Mandarin-speaking shoppers that security has cordoned off the area, forcing other Chinese shoppers to wait.
"My family is here to buy," said Mr. Chong, a student in France . "It's all so much cheaper here. The yuan has lost some value, but Chinese buying power is still strong."
Luxury brands are struggling within China , quietly discounting merchandise to get rid of excess inventory, industry consultants say. But China's economic slowdown and stock market slide haven't dented Chinese travelers' European shopping sprees--at least not yet. Global Blue, a tax-refund service often used by visitors, said it has witnessed a 75% spike in spending by Chinese tourists during the first six months of the year and a 72% increase in August alone, the month when the Chinese currency was devalued and equity prices plummeted.
The average spend by Chinese shoppers in Europe processed by Global Blue over the first six months of the year was EUR981 (US$1,112) , a 7% increase from a year ago.
Thanks in part to relaxed rules for tourist visas, the French government now expects the number of Chinese tourists to exceed 2 million in 2015, up from around 1.5 million in 2014. In the first half of the year, Paris alone reported a 49% increase in Chinese visitors.
It is a welcome boom for Gucci owner Kering SA and luxury-goods conglomerate LVMH Moët Hennessy Louis Vuitton SA , although the future of the tourist rush is uncertain as the declining yuan and economic upheaval could hurt the Chinese population's ability to travel and spend abroad.
Luxury shoppers in China itself have pulled back. After rapidly expanding in mainland China in recent years, luxury companies are now saddled with museum-like stores that are starved for customers and brimming with baubles at risk of falling out of fashion with the changing of seasons. Some of that stems from Beijing's crackdown on corruption in recent years, a policy that put the kibosh on lavish gift-giving as well as some ostentatious displays of wealth--a shift that came way before the gutting of the Chinese stock market.
"You prepare for the worst, but then the worst is even worse than what you prepared for," said Franklin Yao , a retail consultant based in Shanghai for SmithStreet Solutions. "It's a come-to-Jesus moment. Everything we've been doing we have to rethink."
Several high-end fashion groups, including LVMH, Kering , Prada S.p.A . and Burberry PLC declined to comment.
Brisk business in Europe is helping to cushion the blow for luxury brands. Chinese shoppers are avoiding the onerous import duties at home that can often push the price of goods to twice the amount charged in Europe , while also taking advantage of the weaker euro.
Brian Buchwald , a retail consultant at Bomoda, estimates that up to 80% of Chinese luxury purchases today originate outside of mainland China as consumers travel abroad or purchase from agents who buy elsewhere and resell on the gray market. Consumers prefer the retail experience of buying, plus, they are more confident that the items they purchase are authentic when they shop abroad, he said.
Zhang Yuhan , a 29-year-old homemaker in Beijing recently returned to China from a group tour in Spain , where she bought a Gucci bag for about EUR420 (US$471) at an outlet mall outside Barcelona . "No matter how bad the economy is, luxury goods are still way cheaper in Europe than in Beijing ," she said.
China , meanwhile, lacks the vast network of outlet stores that luxury brands tap to discreetly clear out slow- sellers. Fashion brands are loath to steeply discount goods sold in their own stores, because that raises consumer doubts about the inherent value of their wares--and yet that is beginning to happen.
SmithStreet consultants noted that several brands have discounted by as much as 50% earlier this year to clear last season's inventory--more than the usual 30% discount that follows an end-of-season markdown.
Earlier this year, Gucci cut prices by as much as a half in China , according to local Chinese media and analysts. Chanel also slashed its prices in China in March by 21%, a move designed to curb traders who were taking advantage of the price differential, buying handbags in Europe and reselling for a profit in China , the company said. Prada also slashed its prices by 10% in China in late July, according to local Chinese media.
Some brands hold private sales for preferred customers or sell via flash- sale sites--online retailers that offer a single product at a discounted price for a limited time. Following the 2008 financial crisis, flash sales became a popular channel for some retailers looking to get rid of excess inventory.
Currently, smaller brands like Fendi and Kenzo, both owned by LVMH, are unloading their products on Chinese flash- sale websites, discounted by as much as 50%. On popular site mei.com, a Kenzo Kalifornia bag was being offered for 5,110 yuan (US$801) , almost half of the original retail price.
"Three years ago, you couldn't open enough stores in China ," said Torsten Stocker , a consultant at A.T. Kearney in Hong Kong . "Now, the challenge is: How do you align the flow of goods with the flow of buyers?"
Lilian Lin in Beijing contributed to this article.
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GE/HAL drill deal; oil close.
14:56 News Bot: Source reports says GE (GE) among Co.'s looking into buying Halliburton's (HAL) two drilling arms
14:56 News Bot: US crude oil futures settle at USD 44.00/bbl, down USD 0.63 (-1.41%); Brent crude settles at USD 46.37/bbl, down USD 1.77 (-3.68%)
Little more oil, Morgan Brent USD 55/bbl 2016
Bulk tankers may gain as China does some spare capacity build on cheap oil.
Implies higher prices down the line.
07:11 News Bot: Morgan Stanley forecasts Brent average price of USD 53/bbl this year and USD 55/bbl in 2016
07:11 News Bot: China have seized unspent local government budget of up to USD 157bln according to sources
07:11 News Bot: The PBoC will allow foreign central banks to operate within China's FX market
Shell (RDSA LN)(Weekend Press) – CEO says that the Co. has no plans to walk away from the GBP 43bln acquisition of BG, according to the FT. (BBG/FT)
07:11 News Bot: EU Industrial Production WDA (Jul) Y/Y 1.90% vs. Exp. 0.70% (Prev. 1.20%, Rev. 1.50%)
Some hard data OPEC, China
fwiw CNBC head line says reports China already selling out of iPhone 6 and 6s. Guess there's still some coin there if not infrastructure.
Notice BABA down 3.7% pre:
Alibaba Responds To Barron's Article "Alibaba: Why It Could Fall 50% Further," Refutes Claims -- Shares Lower
--------------------
-- COMMODITIES BRIEF: Weaker Than Expected China Factory Output and Fixed-asset Investment Data Also Weighing on Oil Price Amid Fears China Demand For It Will Fall
OPEC RAISES 2016 FORECAST DEMAND FOR ITS CRUDE BY 190,000 BPD TO 30.31 MILLION BPD ON LOWER NON-OPEC SUPPLY VIEW
Opec Lowers 2016 World Demand Forecast By 50K barrels per Day, Raise 2015 Forecast by 80K Barrels Per Day
OPEC LOWERS 2016 NON-OPEC OIL SUPPLY GROWTH FORECAST BY 110,000 BPD TO 160,000 BPD
OPEC , CITING SECONDARY SOURCES, SAYS GROUP'S CRUDE OUTPUT ROSE 13,000 BPD TO 31.54 MILLION BPD IN AUGUST
SAUDI ARABIA TELLS OPEC IT PRODUCED 10.265 MILLION BPD IN AUGUST, DOWN FROM 10.361 MILLION BPD IN JULY
The Organization of the Petroleum Exporting Countries cut its forecast of oil supplies from nonmember countries in 2015, a sign that crude's price collapse is hitting U.S. shale drillers and other competing sources.
In its closely watched monthly oil market report, OPEC Monday lowered its projection for non- OPEC supply in 2015 by about 72,000 barrels a day, to 880,000 barrels a day, because of lower-than-expected output in the U.S.
"U.S. oil production has shown signs of slowing," OPEC said in the report. "This could contribute to a reduction in the imbalance of oil market fundamentals, however, it remains to be seen to what extent this can be achieved in the months to come."
OPEC revised up the demand for its crude this year by about 400,000 barrels a day to 29.3 million barrels. That is 2.2 million a day less than the group's 12 members pumped last month.
OPEC revised up its forecast for oil demand growth in 2015 to 1.46 million barrels a day, a higher rate than previously expected, led by growth in the Organization for Economic Cooperation and Development , a group of the world's richest nations.
The oil-producing group cut its demand growth projection for 2016 to 1.29 million barrels a day, because of slower economic momentum in China and Latin America .
OPEC , which pumps about a third of the world's crude, said its total production inched up by around 13,200 barrels a day in August to 31.54 million barrels, compared with July, driven mainly by higher output from Nigeria , Saudi Arabia and Kuwait .
Saudi Arabia , the world's largest oil exporter, told the cartel it produced 10. 265 million barrels a day last month, down from 10.361 million barrels a day in July. But according to secondary sources, the kingdom's output went up slightly, to 10.362 million barrels a day, from 10.332 million barrels a day.
Write to Summer Said at summer.said@wsj.com
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Russian turns to India for oil, gas market
http://e.businessinsider.com/view/4bb22379e3065cb907b4e3a255f60fe815dd96fa1dfa9e9f/578fad03
With China slowing down, Russia is trying to sell its oil to India
by Gaurav Agnihotri on Sep 13, 2015, 8:08 PM
2 Oil bits
There was an earlier story around about Iran looking to supply Europe with all its natural gas needs, I think was headline. My broker's system screwed up so missed it.
Here it be. Thing is if Iran natty is this assbackward can imagine the oil situation. Anyhow piece has interesting things about Iran-Russia.
http://www.rferl.org/content/iran-says-ready-to-supply-natural-gas-to-europe-/25386226.html
a Long & shorter piece tonight
Write-Downs Abound for Oil Producers
U.S. oil-and-gas producers have written down the value of their drilling fields by more in 2015 than any full year in history, as the rout in commodity prices makes properties across the country not worth drilling.
A group of 66 oil and gas producers have taken impairment charges totaling $59.8 billion through June, according to a tally by energy consultancy IHS Herold Inc. That tops the previous full-year record of $48.5 billion set in 2008, IHS says.
In 2008, oil prices plummeted from above $140 a barrel at midyear to below $37 by year-end as the financial system's near collapse sent the global economy into recession. The drop was steep but relatively short-lived as growing demand from China and other emerging economies was expected to suck up global supplies.
Now, with China's economy sputtering and U.S. production at its highest level in decades, prices aren't expected to return to the $100 level of recent years any time soon.
Write-downs, or impairments, are taken by companies when the value of assets falls below the value on its books. For energy fields, that can mean that the price of leasing land, drilling and installing pipelines exceed the worth of whatever oil and gas is unearthed.
Anadarko Petroleum Corp. , Chesapeake Energy Corp. and Devon Energy Corp. are among the large energy companies that have taken multibillion-dollar impairments this year, while dozens of smaller companies have made proportionally large write-downs.
Writing down assets can shrink the pool of oil-and-gas reserves that are used as collateral for loans. Because many oil-and-gas producers spend more than they make selling commodities, abundant credit is crucial to them being able to keep going. These companies' shares are often valued on forecast production growth more than current profitability.
This year's impairment tally is certain to grow, even if oil prices buck forecasts and move higher.
U.S. securities regulators require exploration-and-production companies to value drilling properties and reserves according to energy prices over the previous 12 months. That means the formulas used to calculate their value at the end of June still included prices from the second half of last year, before oil prices had made much of their descent to their current price around $45 a barrel.
"There's a disconnect between the 12-month average and reality," said IHS analyst Paul O'Donnell . "There will be pricing impairments for the next two quarters, at least."
Prices used to determine asset values at the end of June were $71.50 a barrel for oil and $3.40 a million British thermal units for natural gas, IHS says. That compares with U.S. crude prices of $59.47 a barrel and $2.83 for natural gas on June 30 . The consultancy expects the prices used at year-end to determine asset value will be around $50.50 and $ 2.80 , respectively.
At those prices, very few U.S. drilling properties, particularly shale fields, produce profits, analysts and bankers say.
The write-downs have deflated some of the shale boom's highfliers. Chesapeake, which rose from a $50,000 startup to become the country's second largest natural-gas producer by gobbling up huge swaths of shale, has written off about $10 billion this year. That is about twice the Oklahoma City company's stock market value.
Some of the write-downs can be chalked up to the drilling land grab that took place over the last decade. At the time many wildcatters quickly leased as much land as they could around new shale prospects before competitors caught wind and drove up prices. The consequence of doing so was that big prices were paid for properties that often turned out to be beyond the best drilling areas.
"Companies are having to admit that when they made decisions about development and spending money to drill they anticipated higher prices, and their assets aren't worth as much as they were at $100 a barrel," said Becky Roof , a managing director at turnaround firm AlixPartners LLP .
At its peak and under the leadership of co-founder Aubrey McClendon , Chesapeake leased drilling land at a furious pace, staking claim to some 16 million U.S. acres, a land mass slightly larger than West Virginia . Mr. McClendon's race to grow was well received by investors when energy prices were higher. But when gas prices plummeted in 2009 due to the glut of fuel that his and other companies had produced, Chesapeake ran into financial troubles, made a similarly large write downs, and in early 2013 ousted Mr. McClendon.
Now swaths of Chesapeake's territory have been sold or deemed uneconomic to drill.
The IHS tally doesn't include large integrated oil companies, such as Chevron Corp. , which said in July that it booked $1.96 billion in impairments and $670 million in charges related to project suspensions and adverse tax effects tied to declining oil prices.
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09-13-15 1850ET
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Oil Search Rejects Woodside Takeover Proposal
MELBOURNE, Australia -- Papua New Guinea's Oil Search Ltd. (OSH.AU) has rejected as too low an 11.6 billion Australian dollar ( US$8.3 billion ) takeover offer from Woodside Petroleum Ltd. (WPL.AU).
Had it gone ahead, the deal would have been one of the biggest in the oil-and-gas industry since Royal Dutch Shell PLC signed a US$70 billion deal to buy BG Group PLC in April.
Oil Search in a statement Monday said that after a detailed evaluation of the offer, its board concluded it was " highly opportunistic and grossly undervalues" the company. It said the overwhelming response from shareholders was that the bid had little merit.
Woodside's offer, comprising one of its shares for every four of Oil Search's , represented a 14% premium to Oil Search's closing share price a day before the offer was announced last Monday.
Oil Search's main asset is a 29% stake in a US$19 billion liquefied natural gas project in Papua New Guinea known as PNG LNG, which is being led by Exxon Mobil Corp. , and it is developing other reserves in the southeast Asian country.
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Oil bear who won big in 2014 says prices can still fall further
By MarketWatch
MARKETWATCH FRONT PAGE (http://www.marketwatch.com)
Merchant Commodity Fund CIO Doug King plans to stick with the bearish position on oil that worked in 2014. See full story (http://www.marketwatch.com/story/oil-bear-who-won-big-in-2014-says-prices-can-still-fall-further-2015-09-11)
Oil bit
Oil retreated Friday as analysts reminded the market of high U.S. inventory numbers and the continued oversupply of crude.
Light, sweet crude for October delivery settled down $1.29 , or 2.8%, to $44.63 a barrel on the New York Mercantile Exchange . The contract fell 3.1% in the week.
Brent, the global benchmark, fell 75 cents , or 1.5%, to $48.14 a barrel on ICE Futures Europe, notching a 3% weekly decline.
Data from the U.S. Energy Information Administration on Thursday set the stage for a decline. It showed stocks rose 2.6 million barrels in the week to 458 million barrels, higher than the inventory estimate from industry group the American Petroleum Institute earlier in the week.
U.S. investment bank Goldman Sachs piled on by lowering its short- and midterm price forecasts for U.S. oil to reflect a higher-than-expected oversupply. The bank had been among the most bearish in the market already and now forecasts that U.S. oil could fall to $38 a barrel in the next month. It will still be $45 a barrel by the end of 2016, Goldman Sachs said.
Oil prices "will be lower for even longer," analysts at the bank said. "The oil market is even more oversupplied than we had expected."
The price declines come despite the International Energy Agency saying in a report that the U.S. and other producers outside the Organization of the Petroleum Exporting Countries could be forced into the largest production cuts since the early 1990s. The IEA believes that tight U.S. oil supply, largely from shale and produced by hydraulic fracturing, is expected to drop by 400,000 barrels in 2016.
"Low oil prices are forcing markets toward better balance," Simmons & Co. International said in its review of the report. "U.S. production has rolled over...while international (investment), including global exploration and major project spending, has been decimated."
The problem for bulls is that it will take time for those changes to take effect, with some of the most significant impacts delayed until 2017, said Amrita Sen, chief oil analyst at London -based Energy Aspects. For now, OPEC continues to produce at near-record levels and Iranian production could rejoin the market soon.
Any U.S. decline could give OPEC --led by Saudi Arabia , the world's largest crude exporter--more leverage over the market in 2016. The producer group may boost its output next year as a result, the IEA said.
Gasoline futures settled down 2.37 cents , or 1.7%, at $1.3699 a gallon. Prices fell 3.4% in the week.
Diesel futures fell 2.47 cents , or 1.6%, to $1.55 a gallon, posting a 2.9% weekly decline.
Benoît Faucon and Chiara Albanese contributed to this article.
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09-11-15 1528ET
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Analyst Actions: BP Downgraded To Hold At Jefferies
EIA piece
American oil producers will be forced to make drastic cuts in 2016 because of stubbornly low crude prices, an influential energy monitor said Friday, giving Saudi Arabia a chance to regain some of its lost clout in global markets.
Oil prices that last month reached their lowest levels since the financial crisis have "dimmed the prospects for a recovery in U.S. drilling activity," the International Energy Agency said in its closely watched monthly oil market report. The agency said tight oil--a type of expensive-to-pump crude that has driven American production in recent years--would decline by 400,000 barrels a day in 2016, a fall that already began in July.
Along with expected drops in Russian and North Sea output in 2016, production outside of the Organization of the Petroleum Exporting Countries could see the steepest cuts since the fall of the Soviet Union , the IEA said.
The agency's predictions are among the gloomiest for American oil production to emerge since U.S. crude prices crashed last month to less than $40 a barrel for the first time since the financial crisis, before recovering to about $ 45 a barrel. But U.S. government forecasters this week also predicted a sharp drop in American oil output over the coming 12 months, before beginning to rebound next fall.
With the rise of hydraulic fracturing techniques to extract crude from shale formations in recent years, the U.S. had become one of the world's top three oil producers, along with Saudi Arabia and Russia . Newly low oil prices present challenges to U.S. producers who had shown unexpected resiliency when the market collapsed last year, the IEA said.
"U.S. oil production is likely to bear the brunt," said the Paris -based agency, which advises some of the world's largest oil consumers.
And the IEA noted that any U.S. decline could give OPEC --led by Saudi Arabia , the world's largest crude exporter-- more leverage over the market in 2016. The producer group may boost its output next year as a result, the IEA said.
OPEC last year abandoned its role of slashing production to prop up prices, reasoning that the world was so oversupplied with oil that its cut wouldn't make a difference and would allow other producers to swoop in and steal its market share. The new strategy sent prices even lower, with OPEC hoping that higher-cost producers would be forced to cut back.
That didn't happen right away, but the most recent price crash last month has changed the equation, the IEA said.
"The lower price environment is forcing the market to behave as it should by shutting in output and coaxing demand," the IEA said. "On the face of it, the Saudi-led OPEC strategy to defend market share regardless of price appears to be having the intended effect of driving out costly, 'inefficient' production."
Crude oil was trading lower in London on Friday. Brent crude, the international benchmark, and U.S. oil were both down about 2%, at about $48 and $45 a barrel, respectively as investors continued to worry about an oversupply that the IEA put at 2 million barrels a day.
Global oil prices have been rocked in the past year, falling from more than $114 a barrel for Brent crude, the international benchmark, in summer 2014.
The turmoil generally has been a boon for consumers, as gasoline prices have fallen to their lowest levels since the financial crisis. According to the U.S. Energy Information Administration , average American retail gasoline prices were $2.44 a gallon this week. From 2011 to 2014, when crude prices were routinely $100 a barrel or more, gasoline cost between $3 and $4 a gallon on average, according to the EIA.
Those prices have driven consumer demand higher, the IEA said. Global oil demand growth is expected to climb to a five-year high of 1.7 million barrels a day in 2015, and demand will the rise by 1.4 million barrels a day in 2016, the agency said. The agency raised its oil-consumption forecasts by about 200,000 barrels a day for this year and the next.
Even with higher demand and falling supplies in the U.S. and other non- OPEC countries like Russia , prices could remain low through 2016, Goldman Sachs said Friday. The investment bank lowered its 2016 forecast for Brent to $49.50 a barrel, down from $62 , and for WTI to $45 a barrel, down from $57 . It said prices may have to fall as low as $20 a barrel to clear the huge surplus in global markets.
The IEA said low prices had caused the number of active rigs in the U.S. to resume its decline in September, now standing nearly 60% lower than a year ago. The cost cuts are magnified by the fact that many tight oil wells require intensive investment. The agency said that close to a million barrels a day of oil was at risk of being shut if prices remained at $45 a barrel.
If prices remain low and American supply is crimped, the IEA said lower-cost OPEC producers--most of them in the Persian Gulf--"would need to turn up the taps during the second half of 2016 to keep the market in balance." The agency, which represents the view of oil consumers, tends to voice bullish views on needs for OPEC crude.
The IEA said demand for OPEC oil would rise to 32 million barrels a day in the second half of next year--the highest in seven years--more than the 31.6 million barrels a day the group produced in August and much more than the group's target of 30 million barrels a day.
After reaching a three-year high in July, OPEC's crude output fell by 220,000 barrels a day in August due to disruptions in Iraq and lower fuel demand in Saudi Arabia , the IEA data shows.
Write to Benoît Faucon at benoit.faucon@wsj.com
(END) Dow Jones Newswires
09-11-15 0954ET
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Rosh & Feddy ahead next week. em
Agreed. Rough day with 9/11 on mind
http://finance.yahoo.com/news/analyzing-crude-oil-prices-roller-115133468.html
spot on TS & good artists
Like your select two as well as analysis!
Favorite Artist Renior
Matisse
Thanks boots. Some good/bad news
9/11 on mind.
Heard GS renewed call for $20 oil IF output not reduced. Citi calls a 'global recession' within 2 years.
07:16 News Bot: IEA forecasts that oil supply outside of OPEC to fall most since 1992, raises 2015 and 2016 world oil demand estimate by 200kbpd
- OPEC August supply down 220kbpd to 31.57mln, linked to Saudi and Iraq production
Hillary's poll #s slip, Biden gained. Sanders flat.
Hillary Clinton's lead in the race for the Democratic nomination has fallen to just 10 points and her advantage in hypothetical general election matchups against the top Republican contenders has vanished, a new CNN/ORC poll has found.
The new poll finds Clinton with 37% support among Democratic and Democratic-leaning voters, down 10 points since August. Vermont Sen. Bernie Sanders is at 27% and Vice President Joe Biden at 20%. Sanders' support is about the same as it was in August, making Biden the only candidate to post significant gains in the last month. His support is up 6 points in the last month as he weighs making a run for the presidency.
Get complete coverage of breaking news on CNN TV, CNN.com and CNN Mobile.
HH cool. FREE another beaten watcher.
I have on watch a few of these strange ones that always get savaged, often before entire market gets same treatment.
Now and then an ASTI one has a small recovery.
Many don't FREE WEST JOEZ KIPS.
We'll see how HH goes since think it is more in ASTI camp.
VIX Above All of Its Futures Contracts, see chart
http://www.mcoscillator.com/learning_center/weekly_chart/?utm_source=McClellan+Chart+In+Focus+-&utm_campaign=4808ea6640-CIF_VIX_Above_All_of_Its_Futures_9_10_2015&utm_medium=email&utm_term=0_9e79f8200f-4808ea6640-151424033
The August 2015 minicrash caused the spot VIX Index to move up above the price level of all of its futures contracts, which currently extend out to May 2016. That is another way of saying that the options traders whose actions determine the level of the VIX are more nervous than the VIX futures traders believe is appropriate.
During a protracted uptrend, it can be a wonderful sign of a short term bottom to see such a development. It says that fear has reached an extreme, and that bottom fishers can do well by taking advantage of the situation. The chart above shows that if someone had “bought” the market at any of the times when this condition has appeared over the past 3 years (at least prior to August 2015), he would have come out really well on the trade.
But that is only true during an uptrend. Taking a longer look back shows that during a protracted downtrend, the spot VIX can stay above the level of all of its futures contract for a long time, and it is a really bad idea to bottom fish based on just that criterion. In fact at one point in the autumn of 2008, the VIX was continually above all of its futures contracts for a period of 3 full months.
HH played years ago ok
Been watching it too. Many years ago I had it sub 0.20 and held for a run until got bored with it. Went up more. Not exactly sure what the dumpage is all about since news not bad or anything. But someone has/had an axe on this one.
Nothing on it since F/S 4/2000 of 2-1. 1100 baggers and still SEC reporting. New CFO maybe concern is all I see.
Financials seemed ok & acquisition looked good. Guess just has wounded puppy tag for some.
http://www.otcmarkets.com/stock/HH/news
Iran vote, and Shell unit closed
17:27 News Bot: US House has voted to adopt the Iran measure adding that US President Obama did not fully submit the Iran deal
18:31 News Bot: Shell states that it has closed a unit at the Scotford, Alberta, facility; no specific reason given at this time
19:44 News Bot: Citi forecast China to drag the world into a 2 year "global recession" in which they define as an extended time of excessive capacity
US DoE Cushing OK Crude Inventory (Sep 04) W/W -897K vs Exp. 400K (Prev. -388K).
EIA Oil Status Report
Crude Inventories prior 4.7M consensus 0.9M actual 2.6M
Gasoline actual 0.4M
Distillates actual 1.0M
The energy subcomittee for the US House of Representatives have voted in favour of a bill to withdraw the ban on exporting crude oil
10:39 am ET dj
I take that as a plus for WTI since US likes lighter stuff and world likes our heavy stuff.
and natty + on smaller build
---------- Bberg interesting link
http://www.bloomberg.com/visual-data/gas-prices/
The Real Cost of Filling Up:
Gasoline prices by country
This ranking sorts 61 countries by price,
earnings needed to buy a gallon,
and annual income spent on fuel.
Oil Prices Edge Higher Ahead of Data, Short
Check second story below this for Canada story mentioning oil blowback.
10:05 am et
Crude oil (WTI) is finding support around $43.3 /barrel critical support area, however sellers remain at large as market awaits report from EIA. A break below could lead is moving sharply lower ahead of FOMC meeting next week.
However, bears are likely to exercise caution ahead of EIA weekly report.
Key factors at play in Crude market -
Crude oil production in US has dropped but remains above 9 million barrels/day.
OPEC production is well above 30 million barrels/day quota, highest since 2008. However OPEC members lack further spare capacity to push production higher, without significant investments.
Iran has additional capacity and might boost production if sanctions removed.
American Petroleum Institute's (API) weekly report showed inventory surplus of 2.1 million barrels, which is second consecutive weekly rise.
Today's report might work as key catalyst for crude oil market, as volatility is quite high.
Today's inventory report from US Energy Information Administration (EIA), to be released at 15:00 GMT .
Trade idea -
Our short term long call to the upside has soured after reaching around $50 , which was given around $45 /barrel area, targeting $53 /barrel area. Though our stop loss is still quite far away around $40-38 /barrel area, we feel opportunity is now greater and attractive lining with fundamental and going short.
Sell crude small position now, increase short position with break below $43 /barrel area and sell at subsequent rallies targeting $34 /barrel area with stop around $50 /barrel area.
------------------
10:09 AM EDT, 09/10/2015 (MT Newswires) -- Canfor (CFP.TO), a forest products company, has added to the 2% lost Wednesday, down another 2% early today and closer to a 52 week low of $18.74.
Late Wednesday, Canfor said it has permanently shut down operations at its Canal Flats sawmill in British Columbia due to "a lack of economically available fiber supply, combined with depressed market conditions in the oil and gas and lumber markets."
The facility has a two-shift production capacity of 180 million board feet. Operations at the facility will cease on November 9.
Price: 18.80, Change: -0.45, Percent Change: -2.3
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Thx MG & AAII, Wholesale #s fell
AAII Poll Bullish Sentiment Rises.
Bullish Sentiment Rises in Latest AAII Poll
Bullish sentiment among investors rose during the week ended Wednesday, according to the most recent weekly online survey of members of the American Association of Individual Investors .
Bullish sentiment increased to 34.65% from 32.38% a week earlier, while bearish sentiment rose to 35.01% from 31.67%.
The percentage of investors who described themselves as neutral on the stock market dropped to 30.34% from 35.94%, according to the poll.
The Dow Jones Industrial Average rose 30 points to 16283 in recent trading and has fallen 8.6% this year.
Write to Tess Stynes at tess.stynes@wsj.com
(END) Dow Jones Newswires
09-10-15 0958ET
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July Wholesale down
10:03 am et
--U.S. ECONOMICS: July Wholesale Inventories Decline 0.1% Missing +0.3% Expectations, June Revised Down to +0.7% From +0.9%
AAII Poll Bullish Sentiment Rises.
Bullish Sentiment Rises in Latest AAII Poll
Bullish sentiment among investors rose during the week ended Wednesday, according to the most recent weekly online survey of members of the American Association of Individual Investors .
Bullish sentiment increased to 34.65% from 32.38% a week earlier, while bearish sentiment rose to 35.01% from 31.67%.
The percentage of investors who described themselves as neutral on the stock market dropped to 30.34% from 35.94%, according to the poll.
The Dow Jones Industrial Average rose 30 points to 16283 in recent trading and has fallen 8.6% this year.
Write to Tess Stynes at tess.stynes@wsj.com
(END) Dow Jones Newswires
09-10-15 0958ET
Copyright (c) 2015 Dow Jones & Company, Inc.
------------
Bernstein BP analyst upgrade
Analyst Actions: BP Upgraded to Outperform Rating at Bernstein; Shares Edge Higher in Pre-Market Trading
08:19 AM EDT, 09/10/2015 (MT Newswires) -- Oil and gas company BP (BP) has been upgraded by analysts at Bernstein to an outperform rating from market perform. Price target information was not available.
Shares of BP edged 0.26% higher to $30.98 in Thursday's pre-market trading, moving within a 52-week range of $30.53 - $46.91.
Price: 30.94, Change: +0.04, Percent Change: +0.13
http://www.mtnewswires.com Copyright © 2015 MTNewswires. All rights reserved. MT Newswires does not provide investment advice. Unauthorized reproduction is strictly prohibited.
these idiots can't get R/S right, lol
Look at last paragraph where they correct incorrectly again! It ends up wrong. "The original incorrectly stated the split was 1-for-10."
3X Crude Oil ETF To See 10-For-1 Reverse Split -- Barron's Blog
Souped-up oil and gas exchange-traded notes are so bombed out that prices are being reset.
Credit Suisse announced this week that VelocityShares 3x Long Crude Oil ETN ( UWTI) will see a 10-for-1 reverse split, meaning that holders will receive one share for every 10 or five that they own. The VelocityShares 3x Long Natural Gas ETN ( UGAZ), meanwhile, will see a 1-for-5 reverse split. Both are effective on Sept. 10 .
These ETNs are highly volatile and are marketed to short-term traders. Woe to anyone caught holding UWTI for longer than even a few days -- it's down 75% so far this year, now trading at just $1.20 a share.
Splits are a form of housekeeping by ETF providers. The splits will not change the value of a shareholder's investment, but traders don't want a fund that's too pricey. Investors will get 10 or five ETN units for every one they own. While splits are generally a wash economically, fractional shares that can lead to unplanned gains (or losses) and, thus, unplanned tax events.
More at Barron's Focus on Funds blog, http://blogs.barrons.com/focusonfunds/
Corrections & Amplifications
This item was corrected at 4:39 p.m. ET on Tuesday, September 8, 2015 to show that investors Investors will receive one share for every 10 or five that they own. The original incorrectly stated the split was 1-for-10.
(END) Dow Jones Newswires
09-04-15 1527ET
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