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WTI 45.84 -1.24 -2.63%
WTI 46.66 -0.42 -0.89%
Saudi Arabia Is Willing To Sink The OPEC Deal
By Nick Cunningham - Nov 28, 2016, 5:01 PM CST
After two months of trying to convince its OPEC peers to get on board with a production cut, it could end up being Saudi Arabia that walks away from a deal, sending oil prices tumbling back down to the low $40s or worse.
Saudi Arabia led the charge on the Algiers agreement in September, making big concessions and appearing to take on most of the burden of reducing oil production. After two years of pursuing market share in a world of low oil prices, the Saudis abruptly changed their approach, hoping to boost prices by getting OPEC members to agree to lower output. But they left the messy details to be completed at a later date, hoping to use the interim period between Algiers and the Nov. 30 meeting in Vienna to cajole and convince other OPEC members to agree to the necessary cuts that would create a credible deal that could turn the oil market around.
Sensing Saudi Arabia’s desperation, Iraq and Iran drew harder lines on their own output over the past two months, and both demanded to be exempted from a final deal. Iraq also disputed the production data that OPEC was using, and it remains unclear if those disparities have been resolved. To the extent that either country is willing to make a sacrifice, it appears that they are only wiling to freeze rather than cut.
With OPEC’s second and third largest members unwilling to make any real concessions to date, it is difficult to imagine any result from Vienna will be a game-changer for the oil markets. Other members such as Nigeria and Libya are not going to be subjected to any cuts. The remaining members outside of a few Gulf States were never going to be able to make any serious reductions either. Without Iraq and Iran, Saudi Arabia will have to do all the work – cutting between 600,000 and 1.1 million barrels per day – by itself, which might be too painful economically and embarrassing politically.
The lesson from the 1980s for the Saudis is that cutting unilaterally may not rescue oil prices, and it could even offer an opportunity for rival producers to steal market share. They have kept that lesson in mind over the past two years, and if Iraq and Iran decline to participate, it is unclear if Saudi Arabia is ready to go it alone. “If they are going to cut their production, the Saudis don’t want others to replace them,” an unnamed OPEC official told The Wall Street Journal.
As a result, Saudi Arabia has tried to draw a line in the sand just a few days before the highly anticipated meeting in Vienna. OPEC’s top oil producer has suggested that it is prepared to walk away from a deal unless other members step up to the plate, the logic being that the resulting oil price meltdown will be more painful for Iraq and Iran than it would be for Saudi Arabia. Saudi officials cancelled a meeting with non-OPEC producers that was scheduled for Monday, a surprise move that casted doubt on the chances of a deal this week by highlighting the gulf that still exists between various OPEC members. Oil prices plunged at the end of last week. On Monday, the energy ministers from Algeria and Venezuela flew to Moscow to try to convince Russia to participate in output cuts. Meanwhile, OPEC members are locked in another round of negotiations at the start of this week.
By Sunday, Saudi Arabia’s oil minister Khalid al-Falih said that the oil markets will reach a balance in 2017 even if OPEC did not cut output, a remarkable statement that seems to be an attempt to lay the rhetorical groundwork to limit the fallout from a failed meeting this week.
"We expect the level of demand to be encouraging in 2017, and the market will reach balance in 2017 even if there is no intervention by OPEC. But OPEC intervention aims to expedite this balance and the market recovery at a faster pace," al-Falih said to reporters. "I don't think that we have one path only in OPEC meetings, which is cutting production - I think maintaining production at current levels is justifiable, taking into consideration the recovery of consumption and growth in developing markets and the United States.”
Al-Falih might not be confident that OPEC members will reach a deal, so he is downplaying the significance of the meeting altogether. Or, viewed another way, he is stepping up the pressure on Iraq and Iran to play ball by conveying a sense of indifference if the deal falls apart.
We will probably have to wait until later this week to see whether or not Iraq and Iran will give in or will call Saudi Arabia’s bluff.
By Nick Cunningham, Oilprice.com
http://oilprice.com/Energy/Crude-Oil/Saudi-Arabia-Is-Willing-To-Sink-The-OPEC-Deal.html
WTI 46.84 -0.24 -0.51%
Suckered Again: How Likely Is An OPEC Production Cut?
By Gregory Brew - Nov 28, 2016, 5:13 PM CST
The drama surrounding the OPEC production freeze continued over Thanksgiving weekend, as the main players continue to position themselves in advance of Wednesday’s OPEC meeting in Vienna. Markets wait with bated breath, as speculation that an OPEC deal, with possible support from major non-OPEC producers like Russia, could raise oil prices above $50 before the end of the year.
The biggest news of the weekend was the rhetorical maneuvers of Saudi Arabia, with oil minister Khalid al-Falih offering some bearish talk of pulling out of OPEC talks if no general agreement proves possible. Saudi Arabia pulling out of a meeting of non-OPEC members on Monday caused the meeting to be cancelled entirely. Al-Falih’s comments on Sunday also suggested that Saudi production will not be cut from its current near-record high of 10.6 million bpd. Al-Fatih even suggested that with robust demand in 2017, no OPEC production cut will even be necessary, throwing the entire question of what, exactly, OPEC will agree to on Wednesday up in the air.
The Saudi move is primarily a negotiating tactic. From November 2014, when the country’s oil minister famously refused to reduce production in the face of plummeting prices, to April 2016, the Saudi position was one of unflinching resolve to maintain market share. In the summer of 2016 the Saudi position switched: the new oil minister al-Falih and the country’s worsening economic situation increased its desire for a deal. But that desire looked a lot like desperation in September, when an OPEC production freeze was first agreed to, in theory at least.
Since then, other OPEC members including Iran and Iraq have thrown the freeze into question, demanding exemptions and exceptions in order to protect their own market share and leave themselves room to expand in the future. Iran, for instance, has been ramping up production since last January and now hopes to push past 4 million bpd. Iraq, practically exempt from OPEC production ceilings since the early 1990s, wants further exemptions, arguing that oil income is needed to fund the war against ISIS. Nigeria, Venezuela and Libya have requested conditional agreements due to economic problems, which in Venezuela have reached catastrophic proportions. There is some hope, reports Argus Media, that Iran and Iraq may moderate their demands, leaving the way open for a deal to freeze production at current levels, if not to cut it completely.
As the Wall Street Journal has noted, the fight over a production agreement has revealed fault lines in the global economy: every nation on earth that depends upon oil exports has been hit hard by the fall in prices and each is desperate to protect itself against future drops in price. Saudi Arabia and other Gulf producers have large cash reserves they can draw on during periods of low prices. Other OPEC producers are not so fortunate, while non-OPEC producers like Russia, where the economy is in recession, and Brazil, where GDP is set to decline by over 3 percent this year, need prices to recover as soon as possible to stave off economic disaster.
It’s the same basic struggle that has prevented OPEC, since it’s foundation in 1960, from operating like an effective cartel. Every member wants high prices, so there’s an incentive to measure production, yet the more a nation produces, the more it earns from its sales of oil abroad. That’s a powerful dis-incentive to enter into any agreement that limits production.
OPEC was borne out of a time when the politics of post-colonialism and resource nationalism were strong, and the ties that bound together major producers (resistance to Western corporations and a desire to increase national control over domestic oil industries) were stronger than they are now. Yet even in the 1960s, OPEC could not agree to basic provisions that dictated price or production. It was not until the October War of 1973, which united the Arab members of OPEC, that the cartel was offered an opportunity to dramatically increase prices. Even then, divisions between Saudi Arabia and Iran, the two major producers, prevented a lasting agreement from being formed.
Since the early 1970s, OPEC’s major modus operandi has been responding to crises over which it has no control. The collapse of Iranian production in 1979-1980, the drop in prices in 1985-1986, the Asian and Russian financial crises of the late 1990s and the recession of 2008-2009, all impacted the price of oil and left OPEC scrambling to respond. Rarely have those responses been coordinated or calculated by any force more coherent than independent national interest. The oil market is watching the same drama play out now before the OPEC conference on Wednesday.
In the last year, observers have watched as OPEC announcements and Saudi maneuvers move the market up and down. Twice has the market seen major bumps on the back of OPEC rhetoric, only to fall back down when the group fails to deliver on early promises. Expectations for Wednesday’s meeting shouldn’t be too high, therefore, as OPEC may fail once again.
By Gregory Brew for Oilprice.com
http://oilprice.com/Energy/Energy-General/Suckered-Again-How-Likely-Is-A-OPEC-Production-Cut.html
OPEC deal in doubt, and that means $30 oil — analysts react to latest developments
BarbaraKollmeyer
Analysts were weighing in on Monday as fresh developments cast a shadow over whether this week’s OPEC meeting can deliver a much-anticipated production cut.
Crude CLF7, +2.26% prices have lost 4% since Wednesday, but where they go next is a moving target, buffeted by the horse trading ahead of the summit. On Friday, futures were hit by news that Saudi Arabian officials won’t attend a Monday meeting with Russia and other energy producers outside the Organization of the Petroleum Exporting Countries. The 14-nation cartel meets in Vienna on Wednesday to try to finalize a deal to reduce output.
Analysts suggested the Saudi move is aimed at putting pressure on Iran to agree to a freeze. Iran and Iraq are seen as potential blockers to an output agreement. Iran’s oil minister said Saturday that the country still hopes to be exempted from any production curbs.
Then on Sunday, the Saudi energy minister, Khalid al-Falih, reportedly said the oil market will rebalance on its own and questioned the need for production cuts, according to Reuters.
Meanwhile, Libya over the weekend outright rejected taking part in any OPEC cuts. The head of Libya’s dominant National Oil Corporation, Mustafa Sanalla, said the country’s economic situation is too fragile, and it can’t participate in any cuts “for the foreseeable future,” according to media reports.
As the negotiations continue ahead of the OPEC summit, here’s what analysts are saying about the latest developments and what they mean for oil prices:
• “The stakes are high, and the unusual amount of diplomacy would suggest a firm deal is far from in place, but all parties will be very aware failure to deliver a deal will see crude prices back on their way to a $30 dollar handle very quickly.” — Stuart Ive, client manager at OM Financial, quoted by Dow Jones Newswires.
• “If OPEC really does decide on Wednesday not to implement the production cut that has been promised for the past two months, oil prices can be expected to fall towards the $40-per-barrel mark.” — Commerzbank’s head of commodity research Eugen Weinberg and team.
• “Perhaps Saudi Arabia is realizing that this is not a deal worth making. “ — Vivek Dhar, commodities strategist at Commonwealth Bank of Australia.
Dhar said Saudi Arabia was probably looking at how an OPEC agreement could cause U.S. shale producers to increase their own output. He added that even if a deal is reached, a lift for crude prices may only be temporary, according to Dow Jones Newswires.
Read: How an OPEC output deal could catapult U.S. producers back to stardom
• “Here we go. Buckle up ... [the] meeting between OPEC and non-OPEC producers will be significant, albeit for the wrong reasons as Saudi Arabia’s absence draws the headlines. Expect running commentary throughout the day (and week) to increase the price volatility of both Brent and U.S. crude and Energy names.” — Mike van Dulken and Henry Croft at Accendo Markets
Good morning, boys and girls! Remember to take pre-(OPEC)-meeting statements with a bucket of salt. Price is down. They will sound bullish.
— Samir (Sam) Madani (@Samir_Madani) 1:09 AM - 28 Nov 2016
• “Russia’s possible intention to contribute to a coordinated effort to curb the crude supply overhang remains in doubt despite statements by its Energy Minister and deputy suggesting that a freeze at current production levels would in effect be equivalent to a cut of 200,000-300,000 [barrels a day].
“This latter volume is more or less in line with our expected annual supply growth for 2017 (of 220,000 b/d), but with the recent surge in October, Russia has in fact already reached this higher production level, indicating that any freeze would simply be just that — holding production steady at the recent strong level.” — JBC Energy Research Centre.
• “The support at $45.95 will be key today, and a close below would be a negative development and open the $44.55 key support ...The truth is though that the closer we get to the OPEC meeting, the more nervous traders will be getting for positioning. This means that volatility will be high and news-driven trading will take over.” — Richard Perry, market analyst at Hantec Markets.
• “Rising oil prices thanks to the freeze have convinced some that the bad times are over, and that now they can go back to the good old days of arguing over market share. If they fail to come up with a new deal this week, OPEC will have, once again, snatched defeat from the jaws of victory.” — IG’s Chris Beauchamp.
• “Although OPEC may be repeatedly commended on their ability to create speculative boosts in oil via freeze deal hopes this may come at a very heavy price if nothing is achieved on Wednesday. The classical prisoner’s dilemma OPEC members face coupled with the persistent oversupply woes could ensure low oil prices remains a recurrent theme in the medium
http://www.marketwatch.com/story/opec-deal-in-doubt-and-that-means-30-oil-analysts-react-to-latest-developments-2016-11-28
OPEC oil meeting: 7 things you need to know
MyraP.Saefong
Published: Nov 28, 2016 2:40 p.m.
The Organization of the Petroleum Exporting Countries faces a difficult task on Wednesday when the 14 members of the oil-producing group gather to complete a preliminary agreement reached two months ago.
OPEC outlined a deal in late September to target production at between 32.5 million and 33 millions barrels a day, setting an end-of-November date to hash out details. Prices since then have gyrated in response to waxing and waning expectations for a final agreement, with moves often driven by the latest pronouncements by major players.
‘This is the most difficult OPEC meeting in decades, because they are starting from scratch.’
“This is the most difficult OPEC meeting in decades because they are starting from scratch,” said James Williams, energy economist at WTRG Economics. “It is not just an adjustment to current quotas because individual members have not had or needed one for years.” OPEC’s last output cut was announced in December 2008.
Oil futures saw whipsaw price action Monday, with the U.S. CLF7, +2.08% and global LCOF7, +1.97% crude benchmarks jumping more than 2% to take back much of Friday’s slump.
Indeed, the difficultly of that undertaking has been apparent in the weeks since the preliminary pact, with various oil producers voicing support for the deal on one day, but then sounding unwilling to cooperate on another. Estimates on the group’s collective output have also shown that OPEC has raised output to record levels, with the International Energy Agency pegging production at 33.83 million barrels a day in October.
“After months of uncertainty and speculation, you would think there will be some clarity about the crude-oil situation just days ahead of Wednesday’s OPEC meeting,” said Fawad Razaqzada, technical analyst at Forex.com, in a Monday note. “Well, you would be wrong. In fact, very wrong.”
On Friday, The Wall Street Journal reported that Saudi Arabia was backing an effort to make the steepest oil-production cuts possible at the meeting and hoping to convince non-OPEC producers to help remove almost 2% of the world’s oil supply.
But the news agency also reported that day that the Saudis, the largest producer in OPEC, would’t be attending a meeting Monday with non-OPEC Russia, whose cooperation has been seen as key to coming up with a final OPEC output deal. The refusal fed speculation that disagreements persist, analysts said.
Given this uncertainty, oil prices are set to “move wildly in a generally supportive environment, but inside a market structure that is characterized by lots of false moves and indecisive price action,” said Razaqzada. “Expect to see further choppiness until at least Wednesday, unless OPEC’s next move becomes clear one way or another before the actual meeting.
5 crucial issues
Here’s a rundown of the five major issues OPEC must deal with to reach a final agreement, according to WTRG’s Williams:
1) Establish an overall quota
OPEC set a production target range at its September meeting, but Saudi Arabia has suggested a target closer to the lower-end of the range—32.5 million barrels.
2) Assign an individual quota to each member
Iran and Iraq have been unwilling to cut production in conjunction with other members. They rank as the cartel’s second- and third-largest producers. Iran has said it wants to boost production back to pre-sanction levels before it considers participating in an output deal and Iraq insists it needs its oil revenue to help rebuild and to fight against ISIS.
3) Agree on a source of production data for monitoring purposes
Iran claims to be producing about 600,000 barrels a day more than OPEC’s secondary sources, which include the International Energy Agency and media reports, estimate, said Williams. If it participates in an OPEC deal, it wants its quota based on 4.1 million to 4.2 million barrels a day of production, he said, in line with its pre-sanctions production levels.
“If OPEC does that, and then uses the secondary sources to monitor production, then it would allow Iran to increase production by another half a million barrels a day from its present level, Williams said.
4) Determine how to adjust quotas based on output of Libya and Nigeria.
OPEC members Libya and Nigeria want to be kept out of any output deal as they continue ramping up output in the wake of oil-related disruptions from internal conflicts.
In October, Libya’s output rose by 150,000 barrels a day to 510,000 barrels a day, while Nigeria added 180,000 barrels a day to 1.57 million barrels, according to the IEA.
5) Gauge the response by U.S. shale producers
Potential loss of market share has been a key concernsfor OPEC, particularly with the surge in U.S. shale oil production in recent years. President-elect Donald Trump’s policy measures aimed at removing regulations and boosting potential output are a complicating factor.
Deal or no deal?
Given all of that, analysts highlighted two of the most likely outcomes for the meeting:
1) OPEC reaches an agreement to curb production
A production cut or freeze will be “good news in the short term,” said Razaqzada.
An output cut may lift prices for Brent LCOF7, +1.97% and West Texas Intermediate CLF7, +2.08% crude to, at the very least, their respective 2016 highs of $53.70 and $51.90 a barrel, he said. But a cut “would probably not have a long-lasting impact.”
“The oil market will still remain oversupplied because OPEC and Russia aren’t going to reduce oil production significantly from these record-high levels,” said Razaqzada. And potential price gains in the short term will likely be “capped in the medium term by expectations or a renewed rise in oil production in the U.S.,” he said.
Still, Ann-Louise Hittle, principal analyst at Wood Mackenzie, said she believes that if the cartel does actually cut production, the oil market will become ”tighter” in the first half of 2017. The deal, however, may only be 6 months in duration, which will raise uncertainty about the second half of next year, she said.
And what if OPEC reaches a pact but doesn’t stick to its quota? There’s likely to be a “period of increased volatility in oil prices, especially since OPEC spare capacity is seen to be “diminishing and infighting weakens credibility,” said Hittle.
2) OPEC fails to reach an output agreement
In a recent note, Michael Wittner, head of oil research at Société Générale, said that under this scenario, he would probably revise his 2017 price forecast “significantly downward.”
“Without an OPEC cut, the global rebalancing [of supply and demand] will progress much more slowly then previously expected and be pushed beyond next year,” they said. Currently, Société Générale forecasts WTI at $54.75 and Brent at $56.25 for 2017.
Wittner said its a “50-50 tossup” when it comes to whether OPEC will agree to cut output or not on Wednesday.
“The bottom line is that OPEC negotiations can be messy, and the outcomes can also be messy,” he said. “The range of outcomes is much more than ‘deal or no deal’—it is not black and white but rather with many shades of gray.”
“If there is a deal, the question for markets will be whether it is a strong deal or a weak deal and this will be determined by the level of detail announced by OPEC,” said Wittner.
http://www.marketwatch.com/story/opec-oil-meeting-7-things-you-need-to-know-2016-11-28
WTI 47.07 +1.01 +2.19%
Asian markets mixed on growing pessimism over OPEC deal
Bloomberg News
Monday’s OPEC meeting is looming large on Asian markets.
Expectations that an Organization of the Petroleum Exporting Countries production deal was unraveling dominated Asian trade Monday, adding volatility to regional stocks and currencies.
OPEC officials said Saudi Arabian oil officials won’t attend a meeting Monday with Russia and others ahead of the 14-nation cartel’s closely watched meeting Wednesday.
Japan’s Nikkei 225 NIK, -0.38% was down 0.8% and Australia’s S&P/ASX 200 XJO, -0.56% was down 0.4%, while Hong Kong’s Hang Seng Index HSI, +0.71% was up 0.5%.
The price of Brent crude, a global benchmark, fell 3.6% on Friday. This showed the market was starting to price in a failure at this week’s meeting, said Ric Spooner, chief market analyst at CMC Markets. Brent crude extended its decline Monday, shedding 0.4% in early Asia trade.
“We could see a big rally if they see a plausible agreement [on a production cut],” said Spooner. “But assuming that OPEC does not agree, for the next few months it does set up for a lower oil price [in the] high 30s to low 40s range. We’ve still got big inventories and supply overhang.”
The oil gloom hit Asia’s biggest energy stocks. In Australia, Woodside Petroleum WPL, -2.60% was down 2.5% and BHP Billiton BHP, -2.45% , whose second-biggest division is petroleum, was down 2.3%. Japanese oil explorer Inpex 1605, -1.32% was down 1.7% and in Hong Kong, Chinese oil major Cnooc 0883, -1.00% fell 1.4%.
The drop in oil prices is hitting U.S. inflation expectations, which has pulled down U.S. Treasury yields, which has finally knocked back a lengthy dollar rally.
The yield on 10-year U.S. Treasurys was last at 2.330%, down from 2.359% on Friday, according to Thomson Reuters.
Asian currencies were broadly up Monday. The Korean won gained 0.4% and the Singapore dollar rose by 0.5%.
The Japanese yen was the biggest gainer in Asia on Monday, rising 1.3%, partly as traders sought the safety of the yen on the view OPEC’s production deal was unraveling.
“Guys are very, very nervous about the oil scenario and you see that expressed in the sensitive pair,” said Oanda senior foreign-exchange trader Stephen Innes, referring to the U.S. dollar and the yen.
WTI 45.24 -0.75 -1.63%
Why Credit Suisse Is Closing Its Popular Oil ETNs
November 22, 2016
It's usually not big news when an exchange-traded product is shut down. Dozens of ETPs are routinely shuttered each year due to lack of interest from investors. In those cases, it makes total sense for an issuer to close a product that's not popular and likely not profitable.
That's what makes last week's news that Credit Suisse intends to delist two of its oil ETNs so surprising. The VelocityShares 3x Long Crude Oil ETN (UWTI) and the VelocityShares 3x Inverse Crude Oil ETN (DWTI) are anything but unpopular. As of Friday, the two had assets of $1.6 billion and $222 million, respectively?amounts that would make many issuers envious.
“It’s completely unusual," said Eric Balchunas, senior ETF analyst for Bloomberg. "UWTI is the first ETF or ETN with over $1 billion in assets to close.”
According to a Credit Suisse press release, the firm is making the move to delist these products to "better [align] its product suite with its broader strategic growth plans."
If the firm's recent moves are any hint, those strategic plans may include an exit from the exchange-traded note (ETN) business. Earlier in November, Credit Suisse announced plans to shut down another one of its ETNs, the Credit Suisse X-Links Cushing MLP Infrastructure ETN (MLPN), which also has substantial assets—more than $500 million.
"It's become clear that Credit Suisse is trying to clean up its balance sheet," explained Dave Nadig, CEO of ETF.com. "Since these products are large and therefore probably quite profitable, it's not a ‘pruning’ exercise. And because the underlyings are oil, there's zero chance this is an inability-to-hedge problem. The only remaining reason to shutter them is to clean up the liabilities on their balance sheets.”
ETN Launches Slow
Unlike traditional ETFs, ETNs are a liability for the issuing company?typically big banks. In a year in which Europe's banking woes have been widely advertised, it makes sense that Credit Suisse, and others, may be trying to shrink their liabilities any way that they can.
“Launches are down," according to Bloomberg's Balchunas. "There’ve been 14 ETN launches in a year with 208 launches, and you’ve seen about 20 ETNs close or delist. You have twice as many ETNs going away as entering the market—that’s the opposite of the ratio ETFs are seeing.”
UWTI & DWTI Condemned To Slow Death
Although some issuers may be shunning them, ETNs still have assets of about $25 billion, equal to the amount of money in actively managed ETFs. Moreover, for investors, in some cases they can be advantageous compared to ETFs.
“I think ETNs get a bad rap, and they’re on a lot of people’s ‘do not invest’ lists, but they’re incredibly good from a tax standpoint for certain areas; namely, futures and MLPs," said Balchunas, who noted that 75% of ETN assets are in products that track futures or MLPs.
"In the ETF structure, the tax consequences are not as ideal, and there can be nasty surprises for people. The ETN, in many ways, has been a workaround of sorts to unfavorable tax treatment on the ETF side,” he added.
As for UWTI and DWTI specifically, the two ETNs will continue trading as normal through Dec. 8. After that, they will be delisted from the NYSE Arca and will only be traded over-the-counter, if at all. Credit Suisse will also suspend further issuances of the ETNs after that day.
For most holders of the notes, the best course of action is to sell out by Dec. 8, after which, liquidity will dry up, and the ETNs may not track their net assets values. Thus, while Credit Suisse isn't yet closing UWTI and DWTI completely (the firm may still opt to accelerate the redemption of the ETNs at any time prior to their maturity on 2032), they are effectively condemning the products to at least a slow death.
Credit Suisse Shifting Gears?
As for Credit Suisse itself, the bank is unlikely to be in the ETN space much longer. As Dave Nadig notes, "The writing is on the wall for all Credit Suisse ETNs."
That doesn't mean they'll abandon the exchange-traded space entirely. Bloomberg's Balchunas speculates that the firm could come out with a line of traditional ETFs in the future.
“If you look at J.P. Morgan, Goldman Sachs and Deutsche Bank, these three firms have all made concerted efforts to launch ETFs out of their asset management arms and compete with the likes of BlackRock and Vanguard," Balchunas said.
"These firms all have ETNs, but they’re almost like orphans,” he added. “They’re really not under the same umbrella, and it seems these big Wall Street banks have decided to shift to competing with more 40-Act, plain-vanilla ETFs as opposed to doing ETNs. That’s the bigger trend that this [move by Credit Suisse] could be part of. But again, I don’t know, because the statement they put out is very minimal.”
"We’ll know in the future if Credit Suisse comes out with a line of smart-beta ETFs that this is what they were doing,” Balchunas noted.
Contact Sumit Roy at sroy@etf.com
https://finance.yahoo.com/news/why-credit-suisse-closing-popular-123735985.html
OPEC Cancels Meeting With Non-OPEC Players, Dooming Oil Prices
By Zainab Calcuttawala - Nov 25, 2016, 4:47 PM CST
A power play by Saudi Arabia has resulted in the cancellation of a meeting intended to steer the world’s oil exporters towards a production freeze, causing oil prices to tank on Friday.
After the kingdom decided to take a rain check for a Monday meeting that would have brought together OPEC members and non-OPEC members, the remaining attendees called the event off completely.
At the time of this article’s writing, Brent barrel prices had fallen by 3.59 percent, erasing the gains of a week’s worth of OPEC-related speculation regarding the status of a cartel-wide freeze deal.
Asked for the logic behind the Saudi’s backing out of Monday’s international meeting, Saudi Arabia said it wants OPEC members to agree on a deal before sitting down with non-OPEC producers—for example, heavyweights such as Russia, which OPEC is keenly aware needs to be onboard for any meaningful contraction on the supply side of things.
It has become increasingly obvious that since September, economic and political interests amongst the cartel’s members have undermined any semblance of teamwork that the group could have claimed to have before the oil price crisis hit at the end of 2014.
Due to oil sectors wrecked by separatists and a civil war, Nigeria and Libya will receive exemptions to production limits or cuts. Iran and Iraq – neighboring countries that have also argued for exemptions from the deal in the past due to the lingering effects of international sanctions and terrorist activities, respectively – will also need to either freeze or cut output, depending on who you ask and when. The pushback between Iran and Saudi Arabia, and Iraq and OPEC at large, has been a constant stumbling block for OPEC since the production cap talks first began months ago.
OPEC members Venezuela and Algeria both desperately need higher oil prices to save their oil-dependent national economies. The Gulf countries, on the other hand, have learned to—with difficulty—manage the capital they earned during the oil boom, putting them in a position to navigate years of bearish markets while mitigating financial pressures without catastrophe, although there are doubts as to just how long these countries can hold out in the current price environment.
The delicately tight rope act here multifaceted, with Iran and Saudi Arabia at odds way beyond oil production issues, OPEC not wanting oil prices to rebound too high lest US shale come in and steal the day, and nearly every member country, including Saudi Arabia, not wanting to give up any market share—a reality if all members do not share the production cuts equally, which is looking less and less likely by the hour.
So despite Monday’s cancelled meeting, OPEC, which controls 40 percent of the world’s oil exports, will conduct its official quarterly meeting in Vienna on Wednesday, during which the international energy community will look to the bloc’s members to agree on cuts that will bring their combined production down between 4 and 4.5 percent total.
The failed Monday meeting was supposed to include Russia despite their already unofficial agreement to freeze production at current near-record levels while shining on the energy community by calling the freeze a “cut” because the freeze figure is lower than its planned 2017 production level. The fact that the meeting failed highlights OPEC’s divided membership does not bode well for any kind of production cuts on November 30.
By Zainab Calcuttawala for Oilprice.com
http://oilprice.com/Latest-Energy-News/World-News/OPEC-Cancels-Meeting-With-Non-OPEC-Players-Dooming-Oil-Prices.html
A favourite fund among millennial investors is going to be delisted
Julie Verhage New York — Special to The Globe and Mail
Published Tuesday, Nov. 22, 2016 5:42PM EST
Last updated Tuesday, Nov. 22, 2016 10:46PM EST
Watch out millennials, one of your most popular investments is about to cause you some major headaches.
Earlier this year, research from online brokerage TD Ameritrade Holding Corp. showed that a particularly risky security was attracting investors from the millennial demographic far more than other age groups. Late last week, Credit Suisse AG announced its intent to delist and suspend further issuance of that very security – an exchange-traded note.
In a news release, the firm said it would shut down the VelocityShares 3x Inverse Crude Oil ETN (ticker symbol DWTI) and the VelocityShares 3x Long Crude Oil ETN (UWTI) on Dec. 8, “with a view to better aligning its product suite with its broader strategic growth plans.” Shares saw a precipitous drop over the past few years, losing 98 per cent of their value since November, 2014. While it’s not uncommon to liquidate an ETN, delisting can create major issues, Bloomberg Intelligence analyst Eric Balchunas says. “When an issuer chooses to delist and then halt creations, that can create a dangerous scenario for the investors in what is already a highly dangerous product,” he said. Since the notes will not be called, redeemed, or liquidated, owners must sell their holdings by Dec. 8 unless they want to try to do that in an extremely illiquid market, he adds.
Perhaps it’s in millennials’ best interest to be forced out of this position. The VelocityShares 3x Long Crude ETN was one of the riskiest exchange-traded products on the planet. Tied to the oil market, with triple leverage that gets reset each day, it could make huge gains when prices went up, but with a structure that causes returns to corrode over time. It also had credit risk owing to it being an exchange-trade note, which essentially makes it an unsecured debt obligation of the issuer.
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http://www.theglobeandmail.com/globe-investor/funds-and-etfs/etfs/etn-thats-a-favourite-among-millennial-investors-to-be-delisted/article32989032/
Millennial Nightmare: How They Got Burned in Risky ETNs
Some millennial investors who have been experimenting with exchange traded notes (ETNs) might be reassessing their decision after a recent announcement made by the asset management firm VelocityShares. Last week the company revealed its plans to delist two of its popular securities from the market – the VelocityShares 3x Inverse Crude Oil ETN (DWTI) and the VelocityShares 3x Long Crude ETN (UWTI). That will leave investors with the risk of being stuck in an extremely illiquid investment. (See also, Financial Flood: Why Money Is Pouring Into Banking ETFs.)
Millennials Love Volatility
In recent years, ETNs have made their way into the portfolios of young investors. In fact, VelocityShares’ UWTI ETN was the fifth most traded stock among millennials last year, according to research collected from the brokerage firm TD Ameritrade (AMTD). (See also, Exchange Traded Notes: An Alternative To ETFs.)
While it might sound counterintuitive, millennials love the volatile nature of ETN values. Many of them see the large movements among ETN prices as an opportunity to make substantial returns in relatively short periods of time.
Bloomberg Intelligence ETF analyst Eric Balchunas told Investopedia that the VelocityShares long crude ETN “can return in a day what it takes most ETFs a year to return. The instant gratification is why some millennials and other retail investors in general are attracted to it. [However, the] problem is it can also go down in a hurry too.”
Risk Behind ETNs
ETNs are often compared with exchange traded funds, known as ETFs. But ETNs are very different. They are essentially unsecured debt instruments that trade on the market, and are used to track and multiply the returns of a particular index by using leverage.
As an Investopedia article explains, “When you invest in an ETF, you are investing into a fund that holds the asset it tracks. That asset may be stocks, bonds, gold or other commodities, or futures contracts. An ETN is more like a bond. It's an unsecured debt note issued by an institution. Just like with a bond, an ETN can be held to maturity, bought or sold at will, and if the underwriter (usually a bank) were to go bankrupt, the investor would risk a total default.”
99% Plunge
Over the last 12 months the VelocityShares 3x Inverse Crude Oil ETN and the VelocityShares 3x Long Crude ETN have lost approximately 51% and 68% of their value respectfully. Even more worrisome is the fact that the Long Crude ETN's stock price is down more than 99% since 2014. Both ETNs will be delisted on December 8. Investors will have to dispose of their shares in the funds before that date or be stuck with them with no market to sell.
http://www.investopedia.com/news/millennial-nightmare-how-they-got-burned-risky-etns/
Former Credit Suisse CEO Brady Dougan to launch new bank
Bloomberg News
Brady Dougan left Credit Suisse Group AG in 2015.
Former Credit Suisse Group AG CS, +0.00% Chief Executive Brady Dougan plans to launch a merchant bank in early 2017 and has lined up a $3 billion investment to seed the venture, according to people familiar with the matter.
Dougan’s firm will be backed by Scepter Partners, a syndicate of Middle Eastern ultrawealthy families and state investment funds. The business, which is slated to launch next spring, will aim to make investments across a number of industries while providing investment-banking and trading services, the people said.
While the contours of Dougan’s plans are still taking shape, the concept is broader than many of the boutique firms other senior Wall Street executives have opened as they embarked on the next stage of their careers. Many of them have stuck to peddling merger advice and other businesses that require little financial risk-taking.
Dougan, 57, is going a different route. At the new firm, whose name has yet to be determined, Dougan could use the funds provided by Scepter to trade with clients and potentially for its own account, as well as underwrite capital raisings, the people said. Added debt could give the new business billions of dollars more to put to work beyond Scepter’s $3 billion investment. The entity is expected to draw additional investors, including Dougan himself, the people said.
An expanded version of this report appears on WSJ.com.
http://www.marketwatch.com/story/former-credit-suisse-ceo-brady-dougan-to-launch-new-bank-2016-11-22
Is OPEC Playing The Oil Markets Again?
By Nick Cunningham - Nov 22, 2016, 5:04 PM CST
Oil prices moved back up closer to $50 per barrel on the sudden surge in optimism surrounding an OPEC deal. With the meeting just days away, everybody is playing ball and sticking to the script, and the odds of an agreement have improved markedly compared to a few weeks ago.
Iraq offered three proposals to OPEC members, showing a renewed willingness to negotiate after weeks of disputing production data and demanding an exemption from the proposed cuts. Details of the proposal were kept quiet, but Iraqi officials sounded cooperative in an emailed statement. “Iraq’s legitimate demands should not be perceived as an obstacle to reaching a new agreement to freeze production,” Iraqi oil minister Jabbar al-Luaibi said, according to Bloomberg. Iraq is optimistic about “reaching a fair agreement that would take into consideration everyone’s interests and that puts an end to the glut.” Officials from Iran, Nigeria and even Russia also offered positive words about the prospects of an accord.
Oil prices shot up by more than 4 percent on Monday on the news. Oil has rallied once again in recent days after dropping into the low-$40s per barrel. Now back up close to the $50 per barrel threshold, OPEC has once again succeeded in jaw-boning the oil market.
Goldman Sachs hiked its oil price forecast this week by a substantial amount. The investment bank expects oil prices to average $55 per barrel in the first half of 2017, up sharply from the previous estimate of $45 to $50. The bank is now “tactically bullish” on oil. “With greater confidence that the global oil market can finally shift into deficit later next year, we now believe that there is a strong rationale for low-cost producers to deliver a swift production cut to normalize inventories,” Goldman analysts wrote in a research note this week. In fact, Goldman Sachs sees prices rising across a range of commodities next year.
The optimism has not trickled over into the oil futures market, at least not yet. Hedge funds and other money managers have stepped up their short bets on crude oil ahead of the OPEC meeting, covering against a steep downfall in prices should OPEC fail to come to terms. While the short positions on oil were notable, trading volume in general is way up. Bloomberg notes that as of mid-November, oil price volatility was at a seven month high. Bets on oil futures reached 1.47 million contracts for the week ending on November 15, the largest trading volume in nearly a decade.
But since mid-November, oil prices have increased, suggesting that some oil traders are closing out short positions, which could be because sentiment around the chances of an OPEC deal have improved. Further gains are possible as shorts are closed out.
At the same time, John Kemp of Reuters notes that the oil futures curve still does not look very good. The market is still in a state of contango, in which front month contracts are cheaper than oil futures further out. That is a sign that the markets still expect the glut of supply to continue. In fact, the difference between front month oil contracts and delivery six month out are actually wider than they were back in September when OPEC reached the Algiers agreement, which suggests an even gloomier outlook than two months ago. In short, an OPEC agreement might spark a short-term rally, but unless they agree to real and sustained cuts, the poor fundamentals could ensure the price increases are temporary.
That last point is also key. OPEC may agree to something, but the details matter. OPEC is now producing at least 236,000 barrels per day (as of October) more than they were in September. That means that instead of needing to cut between 200,000 and 700,000 barrels per day in order to reach the stated goal of bringing output down into the range of 32.5-33.0 mb/d, OPEC will now need to make even sharper cuts – somewhere on the order of 600,000 to 1.1 mb/d. On top of that, the latest reports suggest that OPEC is discussing a six month agreement rather than one that would last a year. The idea is that it would require less of a sacrifice for OPEC members, particularly for Iraq and Iran who are still holding out. Of course, if OPEC cuts for six months and then the agreement expires, the effort will produce very little in the way of balancing the market.
Finally, assuming OPEC does the unthinkable and actually agrees to substantive and sustained cuts in output, they will likely succeed in pushing up oil prices. But that then merely throws a lifeline to U.S. shale, which could come back to life if oil prices move closer to, say, $60 per barrel. Even today, with prices below $50 per barrel, the rig count has been climbing for half a year, and now stands at 588 rigs as of last week, up almost 200 rigs from May. Gains in the rig count will only pick up pace of OPEC agrees to cut its output.
By Nick Cunningham of Oilprice.com
http://oilprice.com/Energy/Energy-General/Is-OPEC-Playing-The-Oil-Markets-Again.html
OPEC Insider: ‘’Everyone Could Be On Board Today’’
By Irina Slav - Nov 22, 2016, 10:31 AM CST
OPEC’s High-Level Technical Committee, which is meeting in Vienna to discuss the implementation of the proposed group-wide production cap, could be done by the end of the day today, a Nigerian delegate told media.
The committee is a body selected by member states, comprised of OPEC governors and oil ministry officials, and tasked with clarifying the manner in which the production cut will be implemented. However, as Reuters points out, the committee cannot decide on policy; it can only recommend a course of action that will be approved or discarded by the minister of OPEC members, who are meeting next Wednesday in Vienna.
According to the Nigerian delegate cited by Reuters, Ibrahim Waya, “The likelihood is that everybody will be on board by the end of today,” including Iran and Iraq.
His optimism, however, may be a bit much in light of the latest quote from an Iraqi official: Foreign Minister Ibrahim al-jafari told media in Budapest earlier today that, “It would not be fair for us to cut oil output,” once again restating their desire to be exempt from any cutting, despite the Saudi insistence that they will not carry the weight of the cuts alone, and that everyone needs to be on board.
The Iraqi comments come just one day after Oil Minister Jabbar al-Luaibi said that Iraq will be putting up three new proposals for discussion at the cartel’s technical committee meeting, aiming to “make it easier for OPEC members to make a decision.” And while it is still unclear what those three new proposals are, judging by today’s comments, those three new proposals don’t include oil production cuts for Iraq.
Quotes like these—which some interpret as contrarian, some purposefully ambiguous, and others overly cautious—have been shaking international oil markets for almost two months now, keeping benchmark prices on a perpetual see-saw as analysts endeavor to read between the lines and reflect the latest mood swing of the market in their forecasts.
Goldman Sachs yesterday said, for instance, that it was “tactically bullish” on oil, thanks to the signals coming from the Technical Committee that it will reach some kind of agreement by the end of its two-day meeting. The feeling of optimism spread, pushing up oil prices, with Brent at US$49.11 at 7:35 AM EST, and WTI at US$48.32 before falling a bit lower later in the morning.
But skepticism remains in the absence of clear and unequivocal support for the plan—whatever that plan actually is—between major OPEC producers such as Saudi Arabia, Iraq, and Iran, not to mention Russia, which although not an OPEC member, would be crucial for any meaningful reduction in supply.
Despite all the public comments designed to prop up a struggling market, OPEC members and Russia have increased crude oil production since the talks began in September.
According to secondary sources provided by OPEC, OPEC members combined have produced 33.64 million bpd of crude oil in October, up from 33.40 million bpd in September, and 33.23 million bpd in August. Russia—the world’s top producer of crude oil—produced 11.21 million bpd of crude in October, up from 11.20 million bpd in September and 10.71 million bpd in August. All signs are that neither entity is slowing—in fact, the figures suggest quite the opposite—with Goldman Sachs upping its expected total average production for Russia in 2017 to 11.7 million bpd from its previous 11.4 million bpd.
With the total world oil demand estimated to be 97.08 million bpd, that means OPEC’s and Russia’s combined production of 44.85 million bpd account for 46 percent of the total supply in the world.
So regardless of the outcome of the meeting, which is still very much in question, OPEC, left on its own to cut a mere million barrels per day, cannot realistically and fundamentally rebalance the heavy overhand with demand in the six months that they are suggesting.
By Irina Slav for Oilprice.com
http://oilprice.com/Energy/Crude-Oil/OPEC-Insider-Everyone-Could-Be-On-Board-Today.html
WTI 47.37 -0.87 -1.80%
WTI 47.83 -0.40 -0.83%
WTI 48.74 +0.50 +1.04%
WTI 47.67 +1.31 +2.83%
Iraq to offer proposals on output cuts at OPEC meeting
Reuters
November 20, 2016
LONDON — Iraq will offer three new proposals at a meeting in Vienna this coming week to discuss implementing an OPEC accord to cut output, Iraq’s Oil Minister Jabbar al-Luaibi said late Sunday, in the latest sign the country is inching closer to resolving its differences with the cartel.
The options will be consistent with OPEC policy and are designed to bolster the unity of the group, said Luaibi, who has until very recently been at loggerheads with the group over Iraq’s contribution to the reduction. He declined to give details over the proposals.
“Our alternatives are based on other variables and will make it easier for OPEC members to make a decision,” he told The Wall Street Journal. “All of the options will be logical and in line with OPEC policy,” he added.
The Organization of the Petroleum Exporting Countries agreed in September to reduce output to help draw down a global supply glut that is weighing on oil prices, but left the details of the plan to be worked out later.
An expanded version of this report appears on WSJ.com.
http://www.marketwatch.com/story/iraq-to-offer-proposals-on-output-cuts-at-opec-meeting-2016-11-20
WTI 46.76 +0.40 +0.86%
OTC Execution ETFs Archives
TradeWeb Muscles Into ETF Execution Space
February 3, 2016 MarketsMuse Curator
Fixed Income trading platform TradeWeb, best known for its dominant role administering OTC government securities trading between global banks and institutional customers is muscling into the world of ETFs. Tradeweb has just launched an electronic over-the-counter marketplace for trading exchange traded funds using a “request-for-quote” aka “RFQ”- based platform that is modeled after a platform Tradeweb successfully launched in Europe in 2012.
Tradeweb’s new U.S. platform is designed to be a fully-automated alternative to phone- and chat-based over-the-counter ETF trading of institutional-sized or less liquid orders. Tradeweb clients can use the platform to send RFQs to up to five dealers at a time, using either one- or two-way price quotes. The platform offers aggregated pre-trade price transparency from liquidity providers and National Best Bid and Offer exchange pricing. The platform can also seamlessly connect to third-party and proprietary order management systems, and risk management systems to enable market participants to fully automate workflows. There are now 11 leading liquidity providers on the platform, according to a company announcement.
In Europe, where ETF liquidity is relatively fragmented, Tradeweb’s platform has become one of the largest pools of ETF liquidity. The European platform supports more than 45 percent of OTC electronic trading and the platform’s daily volume exceeds €500 million (approximately $5.6 million) per day. In the U.S., ETF liquidity that trades on exchanges is more centralized, but Tradeweb’s platform is the first fully-electronic platform for trading institutional-sized or less liquid orders through dealers.
“The Tradeweb ETF platform offers a new channel for liquidity and enhances our suite of execution capabilities,” said Chris Hempstead, head of ETF sales for KCG. “The platform represents a novel approach to improving price discovery as well as an innovative way to execute larger-size trades, while reducing the risk of materially impacting pricing.”
Institutions were early adopters of ETF and now hold about 34 percent of U.S. ETF assets, according to November data from State Street Global Advisors and Broadridge. As institutional OTC trading of ETFs continues to grow, market participants say pre-trade transparency into institutional-sized liquidity, and more streamlined, automated workflows are a next step.
“Leveraging electronic solutions to streamline over-the-counter trade workflows is an important step forward for the ETF industry. The combination of a robust exchange traded marketplace with an electronic, transparent OTC market delivers institutional investors choice in how they access liquidity,” said Leland Clemons, managing director at BlackRock iShares.
Tradeweb clients in the U.S. will be able to use the new platform to access all U.S.-listed ETFs, including fixed income ETFs, as well as European-listed ETFs.
http://marketsmuse.com/tag/otc-execution-etfs/
Will the symbol change?
When will it officially be ready to trade on the OTC market?
FLASHBACK: Credit Suisse Finally Liquidates ETNs Delisted in 2009
Ron Rowland
February 15, 2013
Credit Suisse decided to delist three ETNs on April 3, 2009. That in itself is not strange, but Credit Suisse also made the decision to not liquidate these ETNs. This move, or lack of a move, apparently allowed Credit Suisse to avoid having to return the money to the note-holders, thereby allowing it to continue collecting fees on the ETNs. Earlier this month, Credit Suisse finally announced the repurchase of those ETNs, along with a fourth one that will be delisted prior to tomorrow’s (February 26, 2013) trading.
I cannot think of any reasonable excuse for a firm taking 1,422 calendar days to liquidate a product and return the proceeds to the rightful owners, but that appears to be what Credit Suisse has done. This is one reason I always recommend shareholders to sell before the delisting and avoid the termination process. The only good news is that the investors left holding the bag back in 2009 will now get some money back.
The valuation date was February 15, 2013. Investors will receive a cash payment in an amount equal to the daily repurchase value on the valuation date. The affected notes are:
ELEMENTS MLCX Gold Index ETN (former NYSE ticker = GOE, former OTC ticker = CDSUI, and CUSIP = 22542D209) was delisted April 3, 2009. Its final redemption amount is $16.88.
ELEMENTS MLCX Livestock Index ETN (former NYSE ticker = LSO, former OTC ticker = CDSUH, CUSIP = 22542D605) was delisted April 3, 2009. Its final redemption amount is $7.28.
ELEMENTS MLCX Precious Metals Index ETN (former NYSE ticker = PMY, former OTC ticker = CDSUJ, CUSIP = 22542D506) was delisted April 3, 2009. Its final redemption amount is $13.97.
ELEMENTS Credit Suisse Global Warming Index ETN (NYSE ticker = GWO and CUSIP = 22542D407) had its trading halted today (2/25/13) and will now be delisted. Its final redemption amount is $8.59.
ELEMENTS Credit Suisse Global Warming Index ETN (GWO) is the only one of the four that still has a listing. However, some shareholders were apparently unaware of the $8.59 redemption value for GWO, as some trades went through as low as $7.28 a few days after the redemption value was established.
One of the above products, ELEMENTS MLCX Gold Index ETN (former NYSE ticker = GOE), is also famous for another reason – it holds the record for price premiums, having traded for multiple days at more than a 1,000% premium.
In 2010, I stated that in my opinion, Credit Suisse obviously cares little about those who invest in its exchange-traded products. The firm has demonstrated an outright disrespect of those investors. I see no reason to change my opinion of Credit Suisse ETNs at this time.
Of the four, only GWO will be counted as a 2013 ETP closure. The other three (GOE, LSO, and PMY) were included in the complete list of 2009 ETP closures when their delisting became effective.
Disclosure covering writer, editor, and publisher: No positions in any of the securities mentioned. No positions in any of the companies or ETF sponsors mentioned. No income, revenue, or other compensation (either directly or indirectly) received from, or on behalf of, any of the companies or ETF sponsors mentioned.
http://investwithanedge.com/credit-suisse-finally-liquidates-etns-delisted-in-2009
Danger: Credit Suisse To Delist VelocityShares ETNs Without Liquidation
Nov.18.16
Credit Suisse AG announced its intent to delist and suspend further issuance of the VelocityShares 3x Inverse Crude Oil ETN (NYSEARCA:DWTI) and the VelocityShares 3x Long Crude Oil ETN (NYSEARCA:UWTI) effective December 8, 2016, becoming the largest closure in history.
However, the exchange-traded notes will not be called, redeemed, or liquidated. Therefore, it is imperative that owners of DWTI or UWTI sell their holdings by December 8 to avoid trying to do so in the extremely illiquid over-the-counter market.
At the end of October, DWTI had $393 million in assets and UWTI held $1.11 billion of investments. The UWTI closure will make it the largest on record, surpassing the $600 billion closure of the PowerShares DB Crude Oil Double Long ETN (former ticker: DXO) back in September 2009. However, DB and PowerShares took the shareholder-friendly step of redeeming the notes and returning the owner's money.
This is not the first time Credit Suisse has stiffed owners of its ETNs. Back in March 2009, the firm delisted three ETNs without liquidation. Credit Suisse continued to hold the money and collect fees for more than four years. It did not liquidate the ETNs until April 2013.
Disclosure: Author has no positions in any of the securities, companies, or ETF sponsors mentioned. No income, revenue, or other compensation (either directly or indirectly) is received from, or on behalf of, any of the companies or ETF sponsors mentioned.
http://seekingalpha.com/article/4024733-danger-credit-suisse-delist-velocityshares-etns-without-liquidation
I just heard that UWTI and DWTI will become an OTC listing. Have you heard about this?
How do we transfer our present UWTI & DWTI to the new OTC?
I have not decided yet what I am going to convert the oil money to. I feel sad that UWTI & DWTI won't exist after December 9th. At least it was fun while it lasted!
OPEC Jawbone Fail - Oil Slides Despite "Optimistic" Comment
Did OPEC just run out of short-squeeze ammo?
On any normal day the following two headlines from OPEC would have sent oil prices soaring....
IRAQ OIL MINISTER 'OPTIMISTIC' OPEC WILL CLINCH OUTPUT DEAL
IRAQ OIL MINISTER SAYS DIFFERENCES NARROWING OVER OPEC OUTPUT DATA
But it appears the jawbone ammo has run dry...
http://www.zerohedge.com/news/2016-11-18/opec-jawbone-fail-oil-slides-despite-optimistic-comment
Are you going to stay in oil after December 9th?
WTI 45.66 +0.24 +0.53%
Perhaps we will all know more as it gets closer to the December 9th delisting.
WTI 45.02 -0.55 -1.21%
Credit Suisse is going to get hammered with the new banking regs.. Thats why they are shutting this down.
Do you think that UWTI & DWTI will be transferred to an over the counter exchange after December 9th?
WTI 46.11 +0.54 +1.18%
UWTI & DWTI issued by Credit Suisse AG
https://www.sec.gov/Archives/edgar/data/1053092/000095010316017628/dp70004_424b2-a32.htm