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B-H rig count lower
12:03 News Bot: US Baker Hughes U.S. Rig Count (25 Sep) W/W 838 (Prev. 842)
Japan Sept Flash PMI #s lousy, caution.
JAPAN SEPT FLASH PMI SHOWS EXPORT ORDERS TUMBLE MOST IN NEARLY 3 YEARS. SEPT NIKKEI MFG PMI FLASH DECREASE TO 50.9 VS PREV 51.7
JAPAN SEPT FLASH PMI SHOWS EXPORT ORDERS TUMBLE MOST IN NEARLY 3 YEARS. SEPT NIKKEI MFG PMI FLASH DECREASE TO 50.9 VS PREV 51.7
Stocks & oil in dance
MW Oil prices, stock market find themselves in strange relationship
By Mark DeCambre , MarketWatch
Crude oil and stocks are moving in lock step. Will it last?
Crude-oil futures and the U.S. stock market are linked in a strange dance. Lately, oil has been moving nearly in lock step with equities. The correlation over the past month has been uncanny.
In statistical terms, correlation is defined as the tendency of assets to move in the same direction over a given period. Perfect positive correlation, in which two securities move in complete lock step, is represented by the value 1. In perfect negative correlation, represented by negative 1, securities move in exactly opposite directions. A correlation of zero means price movements by the securities are completely random and independent of each other.
Since late August, crude oil and the Dow Jones Industrial Average have been mostly positively correlated. As the chart below highlights, as oil (in red) has gone so have stock indexes like the Dow (in blue):
Those moves intensified as turmoil in China markets reached a crescendo (http://www.marketwatch.com/story/tense-day-for-wall-street-ahead-as-china-stocks-tank-85-2015-08-24). According to Dow Jones data, since Aug. 19 this year oil has moved in the same direction as the Dow more than 70% of the time. Compared with 51.98% for all of 2014 and more than 57% in 2015, not including Wednesday's trade. The table below highlights that trend:
Year Down days same direction Up days same direction Total same direction Total days % of days
2014 64 67 131 252 51.98
2015 61 44 105 182 57.69
Since Aug. 19 10 7 17 24 70.83
Aug. 19-Sept. 22, 2014 6 8 14 24 58.33
Aug. 19-Sept. 22, 2013 7 7 14 24 58.33
Source: Dow Jones data
Wednesday's action saw stocks retreat after oil turned lower in afternoon trade (http://www.marketwatch.com/story/us-stock-futures-rise-as-investors-digest-global-pmis-2015-09-23).
This isn't the typical relationship between the two assets. According to a January article by MarketWatch's Wallace Witkowski (http://www.marketwatch.com/story/why-stock-investors-should-stop-worrying-and-learn-to-love-falling-oil-2015-01-07), citing Covergex research, the long-term correlation between oil prices and stocks going back to 1973 has been almost zero or negative 1.1%. In other words, for more than 40 years, oil and stock prices have usually moved independent of each other.
Read: Oil is unlikely to return to $100 a barrel for years (http://www.marketwatch.com/story/oil-unlikely-to-return-to-100-a-barrel-for-years-2015-09-23)
Lately, however, plunging oil has been blamed for leading the stock market lower, particularly after some investors were caught flat-footed by the accelerated decline of the commodity beginning last November.
Read: Oil sinks as traders bet that inventories will soon climb (http://www.marketwatch.com/storyno-meta-for-guid)
So what's driving this pattern now and will it last?
Fawad Razaqzada, market analyst at Forex.com, pointed to turmoil in China sparking a risk-off mentality. Meaning, investors have been shunning assets that are perceived as risky or volatile, including oil and stocks, in favor of haven assets.
"You tend to see risk assets fall across the board during volatile times," Razaqzada said.
Tariq Zahir , managing member of investment-advisory firm Tyche Capital Advisors , said he attributes some of the tandem moves by oil and stocks to worries about the Federal Reserves's interest-rate decision and seasonally slow summer trading volume. "A lot of people still weren't back at their desks," he said.
But this oil-stock marriage may end soon, Zahir bets.
He sees an eventual hike of benchmark rates by the Fed lifting the dollar and weighing on dollar-denominated oil, but also believes that oil could start to see more independent moves lower driven by expected growth in oil inventories given that the summer-driving season has come to an end.
Read: 4 reasons behind oil's latest price drop (http://www.marketwatch.com/story/4-key-reasons-behind-oils-latest-price-drop-2015-09-11)
Fears about sluggish global growth and the collapse of the high-paying energy jobs, which had been a big boost to the market earlier, could also be behind these recent moves.
Ultimately, cheap oil could eventually prove a boon to the stock market, driving consumers to spend more of their oil savings elsewhere. But, so far that dynamic hasn't quite played out.
- Mark DeCambre ; 415-439-6400; AskNewswires@dowjones.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
09-23-15 1550ET
Feds lease windmills 344k acres off NJ
CNBC said gasoline $1.83 in central Jersey
Associated Press
ATLANTIC CITY, N.J. (AP)--The federal government plans to lease nearly 344,000 acres of the ocean floor off the coast of New Jersey to companies interested in building offshore windmills to generate electricity.
The Interior Department and the Bureau of Ocean Energy Management say that if fully developed, the leases could result in enough wind-generated electricity to power 1.2 million homes.
The leases are to be sold Nov. 9 .
"On the heels of this summer's historic 'steel-in-the-water' milestone for the nation's first commercial offshore wind farm, today's announcement marks another major step in standing up a sustainable offshore wind program for Atlantic coast communities," Interior Secretary Sally Jewell said Wednesday.
In July, construction started on Deepwater Wind's $225 million , 30-megawatt offshore wind project off Block Island in Rhode Island that will provide electricity to Block Island and Rhode Island mainland consumers.
So far, 13 companies have been qualified to bid on the New Jersey leases.
On three occasions, New Jersey regulators have rejected a proposal from one of those companies--Fishermen's Energy- -to build windmills off the coast of Atlantic City , saying the applicant hadn't demonstrated financial integrity, among other concerns. The company is appealing the rejection to the state Supreme Court .
Chris Wissemann , CEO of Fishermen's Energy, applauded the decision and called on New Jersey to approve his project. "Now that it is clear that commercial-scale development is coming to New Jersey , it is all the more important to implement a demonstration-scale project as a first step so that New Jersey can responsibly develop full-scale projects."
Doug O'Malley , director of Environment New Jersey, an environmental group that supports wind energy, said Gov. Chris Christie's administration needs to approve such projects.
"Today's announcement removes one more barrier to offshore wind in New Jersey ," Mr. O'Malley said. "With this federal action, it makes it even more critical for the Christie administration to move forward with the long-stalled state offshore wind program. New Jersey's offshore wind potential is still a gold mine, and can power our state with clean energy for decades to come."
Gov. Christie's office didn't immediately return a call seeking comment Wednesday.
The Bureau of Ocean Energy Management has so far awarded nine commercial offshore wind leases, including seven through the competitive lease sale process. Two are off Rhode Island - Massachusetts , another two are off the Massachusetts coast, two more are off Maryland and one is off Virginia . The federal government says the lease sales have generated about $14.5 million in winning bids for more than 700,000 acres in federal waters.
Environmentalists generally favor the proposals as they would generate electricity without causing carbon pollution that contributes to climate change.
But some question the relatively close proximity to the shoreline (about 7 miles at its closest point), which they say could interfere with migrating shorebirds. Some recreational and commercial fishing groups also worry about being banned from productive fishing grounds near the windmills once they are built.
The lease area would run roughly from Long Beach Island to the southern tip of the state near Cape May .
Copyright 2015 Associated Press
(END) Dow Jones Newswires
09-23-15 1523ET
less draw than last nite but still down
Cushing? Maintenance next week expects a build begins
US DOE U.S. Crude Oil Inventories (18 Sep) W/W -1925K vs. Exp. -1250K (Prev. -2104K); US crude output rose by 0.208% to 9.136mln bpd, according to the EIA
- US DoE Cushing OK Crude Inventory (Sep 18) W/W -462K vs. Exp. 0K (Prev. -1906K).
- US DoE Gasoline Inventories (Sep 18) W/W 1369K vs. Exp. 850K (Prev. 2840K).
- US DoE Distillate Inventory (Sep 18) W/W -2088K vs. Exp. 950K (Prev. 3060K).
- US DoE Refinery Utilisation (Sep 18) W/W -2.20% vs. Exp. -0.50% (Prev. 2.20%)
(U.S. Department of Energy)
Those flash PMI #s soft
US Manufacturing PMI (Sep P) M/M 53.0 vs. Exp. 52.8 (Prev. 53.0)
- Manufacturing Output Index (Sep P) M/M 54.3 vs. Prev. 53.8.
- Manufacturing Employment Index (Sep P) M/M 51.4 vs. Prev. 52.4; lowest reading since July.
(Markit)
Highlights
Growth in Markit's manufacturing sample remains as slow as it's been since October 2013, stuck at 53.0 for the September flash. The reading is the same as the final August result and little changed from August's flash of 52.9. It's also below the recovery's 54.3 average.
Growth in new orders is the slowest since January with businesses citing caution among customers and subdued business conditions. Export orders, hurt by weak foreign demand and strength in the dollar, have been very weak this year but did improve slightly in the latest report. Slow orders are leading the sample to slow hiring and trim inventories. The latest gain for employment is only marginal and the weakest since July last year.
Prices are especially weak in the report, showing the first drop in four months for input costs and the first drop in finished goods since August 2012. Fed policy makers, concerned by low inflation, are likely to take special notice.
The 53.0 headline points to more strength than many of the details of the report. Together with the September run so far of regional surveys, the manufacturing sector does not look like it's having much of a month. Watch for durable goods orders tomorrow for definitive data on August followed by the Kansas City manufacturing update for September.
Strat ? last nite story
WSJ survey 13 banks on price '16
Analysts are growing even more bearish about the oil price, predicting that crude is set to stay below $60 a barrel through next year as the market struggles to recover from a supply glut.
Even as the oil price lingers at levels not seen since the depths of the financial crisis, many analysts and investors are repeating a new crude mantra: lower for longer.
A survey of 13 investment banks by The Wall Street Journal cut their average forecast for Brent crude, the international price gauge, by $9 to $58.70 a barrel, compared with last month's survey. For West Texas Intermediate, the U.S. oil marker, the average forecast is for $54.40 a barrel, also down $9 from August.
"There is still a lot of excess oil around and that will limit any material price improvements until the second half of 2016," said Gareth Lewis-Davies , an oil strategist at BNP Paribas in London .
On Tuesday, Brent crude fell 1.2% to $49.08 a barrel on London's ICE Futures exchange. On the New York Mercantile Exchange , U.S. crude futures were trading down 1.9% at $46.06 a barrel.
Both benchmarks were trading above $100 a barrel in June 2014 , but a combination of ample supply and weaker demand sent prices sharply lower in the second half of the year. Oil continued its descent this year, falling toward $30 a barrel early last month after a surprise currency devaluation in China sparked fears of a slowdown in the world's second largest oil consumer. Further threatening an already oversupplied market is the likelihood of Iranian oil as sanctions are lifted in the wake of Tehran's July nuclear agreement with major Western powers.
Investors share analysts' gloomy outlook.
"With Iran coming back, Saudi Arabia not cutting any production and all the macroeconomic concerns around, there is a high risk we could have nasty downward move by the end of the year," said Doug King , chief investment officer at RCMA Asset Management, who believes that there is a possibility that oil could fall into the low $30s. "Prices will then stabilize but remain lower for a longer period," he said.
While cheap oil is a boon for consumers and businesses around the globe, it brings more pain for oil producers, from Norway to North Dakota . Projects worth around $1.5 trillion remain uneconomic at current oil prices, according to a report by Wood Mackenzie on Monday. Much of the drop in spending is coming from North America , where the U.S. shale boom has nearly doubled domestic output in recent years.
According the U.S. Energy Information Administration , U.S. production peaked in April at more than 9.6 million barrels a day--a multidecade high--and has fallen to below 9.2 million barrels a day since then.
But while U.S. output has started to fall, other major suppliers around the globe, including the Organization of the Petroleum Exporting Countries , a 12-nation oil cartel, have kept pumping at a high pace in a bid to gain market share. Saudi Arabia , OPEC's biggest and most influential member, produced 10.4 million barrels a day in July, its second highest volume in more than a decade, according to the Riyadh -based Joint Organizations Data Initiative.
"We are facing continued oversupply on the oil market, and it will only grow after Iran comes back," said Eugen Weinberg , head of commodity research at Commerzbank AG . Iranian officials have suggested the country can increase its output by up to 1 million barrels a day within months of sanctions being lifted.
Still, Mr. Weinberg said that the continuing glut has already been priced in by the market and the current level will serve as the bottom for prices.
Most banks in The Wall Street Journal's survey agree that, next year, prices will at least rise. The forecasters, though, are less convinced about the strength of that recovery. Analysts expect Brent, after averaging $54 a barrel this year, to stay in the $53 to $64 range until the fourth quarter of next year. Only three of the banks see Brent rising above $70 a barrel in 2016.
The most bearish bank in the survey, Goldman Sachs , believes it is possible for crude to fall as low as $20 a barrel, and while this isn't the bank's main scenario, it said that "the potential for oil prices to fall to such levels...is becoming greater."
Write to Georgi Kantchev at georgi.kantchev@wsj.com
Corrections & Amplifications
This item was corrected Sept. 23, 2015 at 1238 GMT because it misstated oil prices were falling below $30 a barrel, instead of falling toward $30 a barrel early last month.
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
09-22-15 1150ET
Copyright (c) 2015 Dow Jones & Company, Inc.
little data Platts & outlook -7K draw. Hillary anti-pipeline
5:06pm ET
http://www.hellenicshippingnews.com/platts-pre-report-survey-of-analysts-eiaapi-data-suggests-700000-barrel-draw-in-u-s-oil-stocks/
http://www.politico.com/story/2015/09/hillary-clinton-keystone-pipeline-opposes-213941
got 11.53 here Russians in Syria bigger?
Watching those stories of Russia increasing presence to save guy's butt,
market there, sea port, and such.
some bank analyst talking 2017 first hike
Don't have story but Bloomberg mentioned it in passing am.
16:35 US API Crude Oil Inventories (Sep 18) W/W -3,700K (Prev. -3,100K)
- API Cushing Inventories (Sep 18) W/W -490K
(RTRS)
>than expected draws. UWTI spikes a quarter
News Bot:
RDC running offshore oil driller
http://finance.yahoo.com/news/3q15-predictions-rowan-companies-offshore-140010462.html
Oil prices and offshore drilling
Rowan Companies (RDC) is a leading offshore drilling company. Its stock price has fallen almost 27% since the beginning of the year, echoing the fate of many of its competitors.
On August 31, 2015, the price of Brent crude oil touched $54 per barrel, recording an almost 8% gain from the previous closing price of $50.05 per barrel. Unfortunately, Brent crude oil didn’t sustain this price level for very long—its price dropped to $49 on September 7, 2015.
The offshore drilling (OIH) industry is highly influenced by oil prices. Oil prices affect the drilling rates that exploration and production companies are willing to pay for drilling services. Consequently, it’s been a tough year for offshore drilling companies like Diamond Offshore Drilling (DO), Noble (NE), Atwood Oceanics (ATW), Seadrill (SDRL), Pacific Drilling (PACD), Transocean (RIG), and ENSCO (ESV).
Actuals vs. estimates for Rowan Companies
Rowan (RDC) has beaten the market estimates for EBITDA (earnings before interest, taxes, depreciation, and amortization) as well as revenue. The company reported 2Q15 revenues of $508 million, compared to analyst estimates of $506 million. Similarly, reported EBITDA was $228 million, against the analyst estimates of $223 million.
What you’ll learn in this series
In this series, we’ll take a look at Rowan’s 2Q15 results and conference call highlights. To gauge the company’s future, we’ll analyze its current position, management’s future plans, and discussions between management and analysts. We’ll also consider management’s outlook for the industry.
About Rowan Companies
Rowan Companies (RDC) is a global provider of offshore oil and gas drilling services. The company focuses on high-specification and premium jack-up drilling rigs and high-specification ultra-deepwater drillships that are used for exploratory and drilling services. It owns and operates a fleet of 32 offshore drilling units, comprising 28 jack-ups and four ultra-deepwater drillships. The company is present in the North Sea, the Middle East, the Gulf of Mexico, Southeast Asia, and West Africa.
Darden dips open -1.47% em
Crude Oil Prices Are Trading within a Price Channel
http://finance.yahoo.com/news/crude-oil-prices-trading-within-133242473.html
Market Realist By Gordon Kristopher
7 minutes ago
????
Crude Oil Market: Tug-of-War between the Bulls and Bears
(Continued from Prior Part)
Price channel
WTI (West Texas Intermediate) crude oil futures contracts for November delivery rose after falling for two consecutive days. Prices are trading close to the key resistance of $47 per barrel as of September 21, 2015. Crude oil prices have been trading within a downward trending price channel for the last 15 trading sessions. The consensus of falling inventory is driving crude oil prices.
Support and resistance
The speculation of slowing US crude oil production due to the falling rig count suggests that US crude oil production could fall much faster than anticipated. Goldman Sachs estimated that US production could fall by 250,000 bpd (barrels per day) in 3Q15. It could support crude oil prices. Crude oil prices could see resistance at $50 per barrel. Prices tested this level in August 2015. In contrast, rising production Iran, Iraq, and China could add to the oil glut market. Prices could test the nearest support of $38 per barrel. Crude oil prices hit this mark in August 2015.
Crude oil price estimate
The crude oil price chart suggests that WTI prices could average $42–$48 per barrel in the short term. The EIA (U.S. Energy Information Administration) estimates that US oil prices could average around $49 per barrel in 2015 and $54 per barrel in 2016. Goldman Sachs estimates that crude oil prices could trade lower over the long term due to oversupply concerns being more than estimated.
The volatility in the crude oil prices affects oil producers like ExxonMobil (XOM), QEP Resources (QEP), and EOG Resources (EOG). These companies account for 19.83% of the Energy Select Sector SPDR ETF (XLE). The companies’ crude oil production mix is more than 32% of their production portfolio.
ETFs like the Velocity Shares 3X Long Crude ETN (UWTI) benefit from rising crude oil prices. In contrast, lower crude oil prices benefit ETFs like the ProShares UltraShort Bloomberg Crude Oil ETF (SCO).
China could boost tanker rates on increased crude oil imports from “teapot” refineries
in Hellenic Shipping News 22/09/2015
5:03 pm et
China’s small refineries could offer more opportunities for growth in the tanker market, after the recent decision by the Chinese authorities to permit them to import crude oil, as an alternative feedstock to the more expensive domestic crude grades. As per the latest weekly report from shipbroker Gibson, “teapot refineries include the smaller privately owned facilities with capacities typically ranging between 20,000–100,000 b/d, compared with the 200,000+ b/d capacities at Sinopec and CNPC plants”.
The London-based shipbroker noted that “many of these teapot refineries have had difficulty in sourcing sufficient feedstock from domestic producers, so lifting the restriction would allow them to take advantage of lower international oil prices. Also, the teapot refiners prefer to process imported crude rather than discounted fuel oil due to better product yields and margins from crude as opposed to fuel oil. This also accounts why fuel oil imports will continue to slow following these reforms. According to recent Chinese customs data, the nation imported 1.1 million tonnes of fuel oil in July, the lowest volumes in a year, while exports of fuel oil nearly doubled from June”.
Gibson mentioned that “Eastern China’s Shandong Province is the centre of the teapot world, with 80% of these refineries located in this region. The total capacity of the sector in this province is just over 4 million b/d, and the utilization usually averages below 40%. In early 2015, the Chinese National Development and Reform Commission (NDRC), which is the top economic planner of China, set out a policy allowing teapot refiners to process imported crude. A refiner must have a crude distillation capacity of 2 million tonnes per annum (around 40,000 b/d) or above in order to qualify for a crude import quota from the government. According to one Chinese oil trader, so far Chinese teapot refineries (including Dongming -7.5m, Beifang Asphalt – 7m, Sinochem Hongrun – 5.3m, Kenli – 2.52m, Lihuayi – 3.5m and Chemchina – 10m tonnes per annum) have nearly reached their import quota of 40 million tonnes and by end of this year, it is expected this will be increased to 50 million tonnes per annum”.
According to the shipbroker, “there are three Chinese oil majors in an advanced position to trade with those teapot refineries, though, all Chinese oil trading arms want to be suppliers. Regular suppliers in the past have included Petrochina and CNOOC so a connection is already established. Chemchina have purchased several local teapot refineries and will be natural supplier for them. On the oil trading side, Dongming has set a Singapore trading office and have 5 oil traders in place. The impact on the shipping side is thought to be extra crude import requirements to replace fuel oil as a feedstock and potentially a refining utilisation increase”.
It concluded by noting that “assuming that independent refiners utilise the full 700,000 b/d crude import quota, there would be potential for a reasonable increase in crude tanker fixtures with cargoes being sourced from diverse producing regions. Furthermore, with lower fuel oil demand in the Far East, traders may find it increasingly difficult to place the surplus fuel oil in Northern Europe and the US to eastern destinations- impacting upon fuel oil arbitrage to the East”.
Meanwhile, in the crude tanker market this week, in the Middle East, Gibson said that “the VLCCs were all poised in the starter’s blocks at the beginning of the week with the fuller first decade of the Basrah programme apparent to all and sundry. There was a feeling that the market would push on from the high ws 40s to go East, and Owners capitalised on the firmer sentiment to finish this week at 280 x ws 34 West and 270 x ws 65 to Singapore. There is a feeling that we might plateau at this level with Suezmaxes now coming into play as a split, but with ullage delays in North China still persisting, the VLCCs are unlikely to soften in the
short term. Suezmaxes, on their own, are likely to only be able to sustain rates with a reasonable amount of tonnage against thin enquiry. However, if the VLCCs start to split, then rates could move from 130 x ws 65 East and 140 x ws 42.5 West. With the Eid holiday upcoming next week, Aframaxes are expecting very little change on the current soft levels being achieved in the Arabian Gulf and next week will offer little change with 80 x ws 85 being on the cards”, the shipbroker concluded.
Nikos Roussanoglou, Hellenic Shipping News Worldwide
Energy Future Holdings Chpt 11. $24b debt
Energy Future Holdings Corp.'s deal-based chapter 11 plan cleared another hurdle Monday when a judge granted the company permission to start polling creditors on the proposal.
The Dallas energy company filed for bankruptcy protection in April 2014 , overloaded with debt in a depressed energy market. Its chapter 11 plan is premised on selling its valuable Oncor power transmissions business to an alliance of creditors and Hunt Consolidated Inc.
Once the votes are counted, Energy Future is slated to return to court in November to seek confirmation of its chapter 11, a ruling that will call on the company to prove the strategy is fair to creditors and will resolve the financial troubles that triggered the bankruptcy.
In addition to another level of court review, Energy Future's debt workout must pass muster before Texas energy regulators and the Internal Revenue Service . The Oncor transaction is premised on getting favorable rulings on a transformation of the business into a real estate investment trust.
The company's energy retailing and generating division, the so-called "T-side" of Energy Future , will be spun out into a new company under the plan. Senior lenders owed more than $24 billion will swap their holdings for the reorganized T- side company.
Many of the T-side creditors are pledged to support Energy Future's chapter 11 emergence plan, under an agreement approved last week. Many are also investing in the Oncor buyout. The Oncor deal has been touted as a way out for a company that was bogged down in a contentious bankruptcy case, a means of raising enough cash to silence potential foes.
Creditors of Energy Future's "E-side" division, which owns Oncor, have been promised payment in full under the chapter 11 plan, so they won't be getting ballots to cast votes on it.
That could prove a fatal error on the part of Energy Future if Fidelity Research & Management Co. succeeds in attacking the chapter 11 plan. Fidelity says it is entitled to a vote on the chapter 11 plan and isn't getting one.
Fidelity, a big investor in the Energy Future parent company debt, says it was repeatedly promised payment in full in cash. Friday night, however, Fidelity found out Energy Future intends to reinstate the parent company debt holdings, nearly $500 million worth, as debt of the reorganized T-side company.
Gary Kaplan , lawyer for Fidelity, said the move harms investors in parent company debt. Reinstatement doesn't make them whole, he said. It makes them junior investors in a coal-mining, electricity-generating and retailing operation, in a market where such assets are struggling to stay ahead of their debts.
Energy Future said the information was added to clarify Fidelity's treatment under the chapter 11 plan, and it isn't a material change. Standard language has long provided the company could pay off parent company debt in cash or by some other means that amounts to payment in full, the company contends.
If Fidelity convinces the judge that investors in parent company debt aren't getting everything they are owed, and they were deprived of the chance to cast a ballot, "that would be fatal to confirmation," commented Judge Christopher Sontchi .
Monday's preliminary review of voting materials focused on the question of whether the company had provided sufficient information to creditors about what they will get if Energy Future's plan comes to fruition. The judge found the 200- page voting report sufficient.
(Dow Jones Daily Bankruptcy Review covers news about distressed companies and those under bankruptcy protection. Go to http://dbr.dowjones.com)
Write to Peg Brickley at peg.brickley@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
09-21-15 1344ET
Copyright (c) 2015 Dow Jones & Company, Inc.
COMMODITIES: Oil Recovers on Sentiment Supply Situation Could Turnaround
09:44 AM EDT, 09/21/2015 (MT Newswires) -- Oil prices are higher Monday morning, staging a recovery after falling sharply on Friday and posting their biggest one-day drop in three-weeks.
Different data, suggesting that the market oversupply for oil may be hitting a turning point is contributing to the upside. Last Friday Baker Hughes reported a decline in the number of active rigs in the U.S., the third-straight week that rig count fell. Separately, Goldman Sachs said in a report that rig data pointed to a 250,000 barrel per day decline in U.S. oil production between Q2 and Q4 2015.
Adding to oil's upside was a report from Wood Mackenzie that showed US$1.5 trillion worth of planned production in North America was uneconomic with oil below US$50 a barrel. According to an article in the Wall Street Journal citing this report, these projects are unlikely to go ahead, limiting future oil supply.
Meanwhile, Money managers are, according to the latest Commodities Futures Trading Commission data, turning bullish on West Texas Intermediate oil, but turned bearish on Brent crude. Money managers' net-long positions (bets on higher prices) in WTI rose by 14,821 contracts to 147,678 futures and options in the week ended Sept. 15. They are the most bullish on WTI in 10-weeks. In contrast, traders cut their bullish positions in Brent crude by the most in a month.
At last glance, WTI futures were up 2.8% at US$45.92 a barrel.
http://www.mtnewswires.com Copyright © 2015 MTNewswires. All rights reserved. MT Newswires does not provide investment advice. Unauthorized reproduction is strictly prohibited.
Anyone hear OPEC call $80 oil?
http://www.hellenicshippingnews.com/oil-prices-rise-as-u-s-drilling-declines/
YINN Direxion Daily Ft... 19.92 4.35%
UWTI VS 3X Wti Crude 11.09 4.03%
YANG & DWTI lower.
hmm Heard Bloomberg radio do a fast, one time mention, this am about OPEC saying $80 target. Haven't had chance to dig deeper into that.
OPEC $80 bberg? China iron ore Ok
http://www.hellenicshippingnews.com/oil-prices-rise-as-u-s-drilling-declines/
YINN Direxion Daily Ft... 19.92 4.35%
UWTI VS 3X Wti Crude 11.09 4.03%
YANG & DWTI lower.
hmm Heard Bloomberg radio do a fast, one time mention, this am about OPEC saying $80 target. Haven't had chance to dig deeper into that.
Read this yesterday. If just followed Press one could think China was on its butt. But not so? Iron ore demand goes hand in glove with need/demand for oil. Elsewhere like Middle East & West Africa oil is still in demand.
http://www.hellenicshippingnews.com/shipping-index-soars-as-china-iron-ore-buying-seen-curbing-fleet/
A measure of shipping costs for commodities had its biggest two-day gain in almost seven years amid speculation Chinese iron ore purchasing is eroding the supply of vessels to collect the raw material from Brazil.
The Baltic Dry Index rose 18 percent on Thursday and Friday, the most for two days since Feb. 2009, according to the Baltic Exchange in London. Charter costs for Capesize ships that take iron ore to China from Brazil rose by 16 percent to $14.59 a ton.
Shipping costs stayed in a slump for most of this year amid speculation that slowing economic growth in China was sapping its demand for raw materials that provide the bulk of cargoes for owners. Even so, the country still imported an average of 76.67 million metric tons of iron ore a month this year, more than any other nation and little changed from the corresponding period in 2014.
“There’s a misunderstanding among investors that China isn’t buying iron ore: it is,”Jeffrey Landsberg, the managing director of Commodore Research in New York, said by phone. “China is still buying every single ton that global miners want to sell.”
Day rates for Capesize ships jumped, as did derivatives that traders use to bet on, or hedge, future shipping prices.
The vessels are earning $13,563 and $14,658 a day, two rates for the carriers published by the Baltic Exchange show. They were earning $7,179 and $8,288 a day respectively at the end of last month.
Derivatives called Forward Freight Agreements gained 6.7 percent to $15,900 a day for October contracts, according to data from Clarkson Securities Ltd., a unit of the world’s biggest shipbroker.
While Australia is a bigger iron ore exporter than Brazil, shipments from the Latin America are no less important because of the distance involved in exporting to Asia, the biggest source of demand. A voyage to China and back from the Latin America takes about three months, occupying vessels about three times longer than for a comparable cargo from Australia.
Source: Bloomberg
2 or more side fronts
Lest we forget there's a bunch of concerns shaping up. Start to think that Russia is seeing our Cuba adventure a trade off for their getting deeper into Syria (old fave spot of theirs) as well as Balkans, Baltics, Arctic. Since US has backed out of world affairs it figures the gaps get filled. Not a bad trade-off if those fleeing are the brains.
Sticky part is leaving old allies dangling in wind.
Israel to Voice Concerns About Russian Deployment in Syria
JERUSALEM --Israeli concerns about Russia's military buildup in Syria will be the focus of a planned meeting in Moscow on Monday between Prime Minister Benjamin Netanyahu and Russian President Vladimir Putin , according to Israeli officials.
In a major military escalation in the region, Russia has moved jet fighters to a base in Syria for the first time, U.S. defense officials said Friday. The deployment came just hours before U.S. Defense Secretary Ash Carter spoke with his Russian counterpart, a conversation designed in part to help avert a confrontation between American and Russian forces.
Like the U.S., which is carrying out airstrikes in Syria against Islamic State, Israel is worried that the positioning of Russian fighter jets and surface-to-air missiles in the country could lead to inadvertent confrontations with its own air-force missions over Lebanon and Syria , where it enjoys overwhelming air superiority.
"Once we understand exactly what Russia intends to do in the arena and exactly what it plans to move into it, whether ground or air forces, or others... we'll know what needs to be done," Yossi Cohen , Mr. Netanyahu's national security adviser, told Israel Radio in a rare media interview on Friday. He said that senior Israeli army officers would be part of the Israeli delegation to Moscow .
"If arrangements and coordination are necessary, the relevant arrangements and coordination will be made during this visit," he said.
Mr. Cohen added that the Israeli team wanted "to clarify with the Russian side their intentions and possible implications for Israel , and the required coordination between us in the future, should it be necessary."
Israel conducts routine surveillance missions over Lebanon to monitor activities of the Iranian-backed Hezbollah guerrilla group.
Israeli aircraft have also bombed targets in Syria described as stockpiles or convoys of advanced weapons, including sophisticated Russian-made surface-to-air missiles thought to have been be destined for Hezbollah in Lebanon .
The advanced antiaircraft systems have been described by Israeli officials as "game-changing" because they would challenge Israel's air superiority in Syrian and Lebanese skies.
Israeli officials have repeatedly voiced concern that advanced Russian weapons supplied to Syria could end up in the hands of militant groups involved in the fighting there.
An announcement last week of Mr. Netanyahu's visit to Moscow said he would raise "the threats posed to Israel by the increased flow of advanced war materiel to the Syrian arena, and the transfer of deadly weapons to Hezbollah and other terror organizations."
Along with combat aircraft and an air-defense system, the Russian buildup at a base near Latakia, Syria , has included tanks, armored personnel carriers and artillery, according to American officials.
Russian officials have described the buildup as defensive and part of Moscow's routine military support for the Syrian government.
In London on Saturday, U.S. Secretary of State John Kerry also raised questions about Russia's intentions in Syria , and urged Moscow to help bring President Bashar al-Assad to the table for serious negotiations about a political transition.
Mr. Kerry added that the U.S. would accept a resolution to the Syrian civil war that allowed Mr. Assad to remain in place for a period before stepping down. Previously, Washington had insisted that Mr. Assad should step down before a transition government takes over, leading eventually to free and fair elections.
As the war in Syria has dragged on, the Israeli government has sought to avoid taking sides in the conflict, saying it is solely concerned with the effect of the fighting on Israel's security.
Hundreds of Syrians wounded in fighting between rebels and Syrian government forces near the Israeli-held Golan Heights have been taken to Israel for hospital treatment, in what has been described as a purely humanitarian effort.
While Israel's former defense minister, Ehud Barak , welcomed the prospect of the ouster of Mr. Assad in the early stages of the Syrian conflict, Israeli leaders have since avoided commenting on what Mr. Assad's fate should be in any future political solution.
Jenny Gross in London contributed to this article.
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09-20-15 1128ET
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Less China more India
Notice the Russian shift to India for oil & natty since blowing so much coin in China compared to what they've actually gotten in return.
India could be saving grace. Lot of promise there for a while until/unless China can regain footing.
I'm not so worried yet about China's expansionary behavior if it is that given lot of their stuff is retooled discards. Maybe later. Not traditionally a Pacific threat plus Japan just made a policy shift regarding foreign military direction. That made front page of NYT to send some signal that game is still 'in balance'. Until someone upsets the apple cart in Mideast we're hung price @50. With some far out guys saying maybe even no rate rise until 2017 the fun just beginning.
Catch later.
thx Phat. Pope time steal headlines
Interesting timing for Russians go be jacking up that airbase and do some troop/civilian moves. The world (US) will be focused on Pope visit and give less play to foreign events. Russia sneaks in under radar.
My first thought was oops Russians about to get into another Afghan mud pile like US in Nam.
But Syrians having fled & fleeing doesn't suggest Vietnamese nationalism in this case. It's more like who need this, I'm getting out of Dodge.
Russia stands to get another naval base like in Ukr snatch & grab.
Funny that Arabs in general haven't yet, or will, react the way they did about American intervention.
Guess we'll see. If Irsandragged in and larger engagements begin like jets to jets or jets to ships probably see oil quick test 75.
Not much reaction if just more of same low level tribal action.
Pentagon: Russia Has Moved Its First Tactical Fighter Jets to Base in Syria--Update
As Russia liberates Syria, Europe stock markets fell lots post Fed. But to me deeper issues emerging. US sacrificing its USD for world's sake as others are soaking up the goodies.
By Dion Nissenbaum in Washington and Nathan Hodge in Moscow
Russia has moved jet fighters to a base in Syria for the first time, U.S. defense officials said Friday, a major military escalation that heightens fears Moscow is set to play a more direct role in propping up Syrian President Bashar al-Assad .
The deployment of a small number of tactical jets came just hours before U.S. Defense Secretary Ash Carter spoke to his Russian counterpart about Moscow's deepening role in Syria , a call that ended a long pause in high-level military communication between the U.S. and Russia .
U.S. defense officials said the nearly hourlong conversation was designed in part to help avert a confrontation in Syria between the U.S. and Russia , which have long been on opposite sides of the five-year-old civil war.
Russia's decision to send in jets, however, is the clearest indication Moscow is preparing to use military might to help Mr. Assad as he clings to power.
U.S. policy in Syria , which has for years sought to avoid getting drawn into the protracted and bloody conflict, is at a turning point, prompted by the flood of refugees into Europe and the surprising Russian escalation.
In addition, the Obama administration is considering whether to scrap its troubled plan to arm moderate Syrians to battle the extremists of Islamic State, which controls much of Syria .
The direct involvement of Russian forces in the Syrian civil war on behalf of Mr. Assad would mark a new twist that could put American pilots, who regularly fly surveillance flights and airstrike missions, in substantially greater danger.
Russian officials have sought to play down the buildup at the coastal Syrian airfield as routine military support for Syria that should not be alarming to the U.S. and its allies, however.
During their call, Russian Defense Minister Sergei Shoygu told the Pentagon chief that Russia's military buildup in Syria is "defensive in nature" and "designed to honor commitments made to the Syrian government, " according to a senior U.S. defense official.
Even though Russian support would be aimed also at subduing Islamic State, it runs counter to current U.S. policy, which calls for Mr. Assad's ouster. And it opens up the possibility that Russian jets could attack U.S.-backed Syrian forces battling Mr. Assad.
Defense officials said over the past two weeks Russia has stepped up development of an airfield near the port city of Latakia by sending in housing for up to 2,000 people, attack and transport helicopters, artillery, tanks and armored personnel carriers.
The jets, believed to be Sukhoi Su-27s, which are designed for air-to-air combat, could be used to challenge U.S. planes flying over Syria or to help Syrian forces defending the Assad regime.
Last year, to protest Russia's intervention in Ukraine , the Pentagon suspended military cooperation with Moscow , a move that cut off bilateral talks, joint exercises and planning sessions.
The Obama administration decided in recent days the time was right to resume high-level military ties, despite the implication that Russia was being forgiven.
"It will help to define some of the different options that are available to us as we consider next steps in Syria ," Secretary of State John Kerry said in London . "Clearly, if you're going to have a political settlement, which we've always argued is the best and only way to resolve Syria , you need to have conversations with people and you need to find a common ground."
Friday's call between Mr. Carter and Mr. Shoygu marked the first time the two officials have spoken, and it gave the U.S. a chance to press Moscow on its intentions in Syria , which remain opaque to Washington . U.S. defense officials wouldn't say whether or not Mr. Carter was informed of the jet fighters' arrival in Syria before his call with Mr. Shoygu.
White House press secretary Josh Earnest sought to play down potential military cooperation with Russia as limited, saying it would only be on "a practical, tactical level" in Syria , designed to avoid any inadvertent conflict between U.S. and Russian forces.
"That's obviously different than the kind of military-to-military cooperation between our two countries that was in place prior to Russia's inappropriate and unjust interference in eastern Ukraine ," Mr. Earnest said.
The U.S. has said it would welcome Russian airstrikes against Islamic State militants, but not if they were in support of Mr. Assad. It seems unlikely that Russia would join the U.S.-led coalition carrying out attacks on Islamic State forces, which means the U.S. could be forced to coordinate with Russia if both countries are flying missions over Syria .
In Iraq , Iran has carried out a limited number of airstrikes, but they have not created a serious risk of confrontation with U.S. planes.
Russia , one of Mr. Assad's most important allies, stepped up its military role in Syria after Mr. Assad admitted in July that his forces had lost control of more than half of the country to militants.
Maj. Gen. Igor Konashenkov , a spokesman for Russia's ministry of defense, confirmed the conversation between Messrs. Carter and Shoygu.
"In the course of an hour-long discussion, the two held a detailed discussion on both the situation in the Middle East in general, and in Syria in Iraq in particular," Gen. Konashenkov said. "The ministers confirmed the re- establishment of direct military-to-military contacts between both countries and agreed to continue consultations."
The Russian Ministry of Foreign Affairs said that John Tefft , the U.S. ambassador to Russia , had also met Friday with Mikhail Bogdanov , a deputy Russian foreign minister, to discuss the Syria crisis.
The news that the U.S. and Russian militaries were ready to engage on the Syria issue follows a series of phone calls between Mr. Kerry and his counterpart, Foreign Minister Sergei Lavrov .
"We are also ready to engage in discussion" about military-to-military contact over Syria , said Maria Zakharova , the spokeswoman for Russia's foreign ministry. "Lavrov proposed it many times to Kerry."
Carol E. Lee and Felicia Schwartz contributed to this article.
Write to Dion Nissenbaum at dion.nissenbaum@wsj.com and Nathan Hodge at nathan.hodge@wsj.com
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(END) Dow Jones Newswires
09-18-15 1834ET
Copyright (c) 2015 Dow Jones & Company, Inc.
Pentagon: Russia Has Moved Its First Tactical Fighter Jets to Base in Syria--Update
By Dion Nissenbaum in Washington and Nathan Hodge in Moscow
Russia has moved jet fighters to a base in Syria for the first time, U.S. defense officials said Friday, a major military escalation that heightens fears Moscow is set to play a more direct role in propping up Syrian President Bashar al-Assad .
The deployment of a small number of tactical jets came just hours before U.S. Defense Secretary Ash Carter spoke to his Russian counterpart about Moscow's deepening role in Syria , a call that ended a long pause in high-level military communication between the U.S. and Russia .
U.S. defense officials said the nearly hourlong conversation was designed in part to help avert a confrontation in Syria between the U.S. and Russia , which have long been on opposite sides of the five-year-old civil war.
Russia's decision to send in jets, however, is the clearest indication Moscow is preparing to use military might to help Mr. Assad as he clings to power.
U.S. policy in Syria , which has for years sought to avoid getting drawn into the protracted and bloody conflict, is at a turning point, prompted by the flood of refugees into Europe and the surprising Russian escalation.
In addition, the Obama administration is considering whether to scrap its troubled plan to arm moderate Syrians to battle the extremists of Islamic State, which controls much of Syria .
The direct involvement of Russian forces in the Syrian civil war on behalf of Mr. Assad would mark a new twist that could put American pilots, who regularly fly surveillance flights and airstrike missions, in substantially greater danger.
Russian officials have sought to play down the buildup at the coastal Syrian airfield as routine military support for Syria that should not be alarming to the U.S. and its allies, however.
During their call, Russian Defense Minister Sergei Shoygu told the Pentagon chief that Russia's military buildup in Syria is "defensive in nature" and "designed to honor commitments made to the Syrian government, " according to a senior U.S. defense official.
Even though Russian support would be aimed also at subduing Islamic State, it runs counter to current U.S. policy, which calls for Mr. Assad's ouster. And it opens up the possibility that Russian jets could attack U.S.-backed Syrian forces battling Mr. Assad.
Defense officials said over the past two weeks Russia has stepped up development of an airfield near the port city of Latakia by sending in housing for up to 2,000 people, attack and transport helicopters, artillery, tanks and armored personnel carriers.
The jets, believed to be Sukhoi Su-27s, which are designed for air-to-air combat, could be used to challenge U.S. planes flying over Syria or to help Syrian forces defending the Assad regime.
Last year, to protest Russia's intervention in Ukraine , the Pentagon suspended military cooperation with Moscow , a move that cut off bilateral talks, joint exercises and planning sessions.
The Obama administration decided in recent days the time was right to resume high-level military ties, despite the implication that Russia was being forgiven.
"It will help to define some of the different options that are available to us as we consider next steps in Syria ," Secretary of State John Kerry said in London . "Clearly, if you're going to have a political settlement, which we've always argued is the best and only way to resolve Syria , you need to have conversations with people and you need to find a common ground."
Friday's call between Mr. Carter and Mr. Shoygu marked the first time the two officials have spoken, and it gave the U.S. a chance to press Moscow on its intentions in Syria , which remain opaque to Washington . U.S. defense officials wouldn't say whether or not Mr. Carter was informed of the jet fighters' arrival in Syria before his call with Mr. Shoygu.
White House press secretary Josh Earnest sought to play down potential military cooperation with Russia as limited, saying it would only be on "a practical, tactical level" in Syria , designed to avoid any inadvertent conflict between U.S. and Russian forces.
"That's obviously different than the kind of military-to-military cooperation between our two countries that was in place prior to Russia's inappropriate and unjust interference in eastern Ukraine ," Mr. Earnest said.
The U.S. has said it would welcome Russian airstrikes against Islamic State militants, but not if they were in support of Mr. Assad. It seems unlikely that Russia would join the U.S.-led coalition carrying out attacks on Islamic State forces, which means the U.S. could be forced to coordinate with Russia if both countries are flying missions over Syria .
In Iraq , Iran has carried out a limited number of airstrikes, but they have not created a serious risk of confrontation with U.S. planes.
Russia , one of Mr. Assad's most important allies, stepped up its military role in Syria after Mr. Assad admitted in July that his forces had lost control of more than half of the country to militants.
Maj. Gen. Igor Konashenkov , a spokesman for Russia's ministry of defense, confirmed the conversation between Messrs. Carter and Shoygu.
"In the course of an hour-long discussion, the two held a detailed discussion on both the situation in the Middle East in general, and in Syria in Iraq in particular," Gen. Konashenkov said. "The ministers confirmed the re- establishment of direct military-to-military contacts between both countries and agreed to continue consultations."
The Russian Ministry of Foreign Affairs said that John Tefft , the U.S. ambassador to Russia , had also met Friday with Mikhail Bogdanov , a deputy Russian foreign minister, to discuss the Syria crisis.
The news that the U.S. and Russian militaries were ready to engage on the Syria issue follows a series of phone calls between Mr. Kerry and his counterpart, Foreign Minister Sergei Lavrov .
"We are also ready to engage in discussion" about military-to-military contact over Syria , said Maria Zakharova , the spokeswoman for Russia's foreign ministry. "Lavrov proposed it many times to Kerry."
Carol E. Lee and Felicia Schwartz contributed to this article.
Write to Dion Nissenbaum at dion.nissenbaum@wsj.com and Nathan Hodge at nathan.hodge@wsj.com
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(END) Dow Jones Newswires
09-18-15 1834ET
Copyright (c) 2015 Dow Jones & Company, Inc.
Coca-Cola received notice from the IRS that it owes about $3.3 billion in an extra taxes, plus interest http://bloom.bg/1V00ZKm
13:01 News Bot: US Baker Hughes U.S. Rig Count (18-Sep) W/W 842 (Prev. 848). -957 y/y CNBC
Peso, ringgit & won > USD post Fed
Several emerging-markets currencies, including the Mexican peso, Malaysian ringgit and Korean won, traded higher than the dollar after Federal Reserve policy makers left interest rates unchanged Thursday. Meanwhile, the currencies of risky emerging-markets, including the Turkish lira and Brazilian real , traded lower. The peso traded at 16.50, up 0.2% in recent trade from 16.54 late Wednesday in New York . The Malaysian ringgit traded at 4.2 to the dollar, up 0.2% on the day from 4.25 to the dollar late Wednesday. The Korean won traded at 1,165.45 won to the dollar, up 0.5% from 1,171.65 won . The real traded at 3.86, down 0.9% from 3.83 late Thursday. The "more fragile" among the EM currencies suffered even though the Fed abstained from raising rates because "the uncertainty [around rates] we've been living with is still there," said Lee Ferridge , head of macro strategy for North America , at State Street Global Advisors .
- Joseph Adinolfi ; 415-439-6400; AskNewswires@dowjones.com
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09-17-15 1600ET
OPEC forecast +5/bbl per annum. Yellen Oct?
btw Yellen said if Oct rate rise called for then will do special press session.
14:50 News Bot: OPEC forecasts crude oil prices gaining by USD 5/bbl per annum and that oil prices will reach USD 80/bbl by 2020, according to sources
- OPEC forecasts in the medium term that non-OPEC output in 2017 will fall by 1mln bpd to 58.2mln bpd.
(RTRS)
OPEC forecast +5/bbl per annum
btw Yellen said if Oct rate rise called for then will do special press session.
14:50 News Bot: OPEC forecasts crude oil prices gaining by USD 5/bbl per annum and that oil prices will reach USD 80/bbl by 2020, according to sources
- OPEC forecasts in the medium term that non-OPEC output in 2017 will fall by 1mln bpd to 58.2mln bpd.
(RTRS)
Penn Virginia Cuts Payout to Preserve Liquidity -- Market Talk
Today 12:48 PM ET (Dow Jones)Print
12:48 EDT - Penn Virginia (PVA) has joined the ranks of energy companies halting shareholder payouts in light of oil's slump. PVA says that it won't pay out third-quarter dividends on its Series A and Series B depositary shares, which carry 1/100 interest in its preferred shares. PVA cites the need "to preserve liquidity and the resulting reduction in capital available to invest in its high-quality assets." Earlier this month, Canadian companies Penn West Petroleum. and Pengrowth Energy cut their payouts to shareholders. Linn Energy LLC, the largest oil-and-gas producing partnership, has also said it would stop making dividend-like payments. PVA falls 9.9% to 73, bringing its decline for the year to 89%. (chelsey.dulaney@wsj.com; @chelseydulaney)
(END) Dow Jones Newswires
September 17, 2015 12:48 ET (16:48 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
Brent Futures-Style Options BZO CME 10/11-12
Effective Sunday, October 11 (trade date Monday, October 12), Brent Crude Oil Futures-Style Margin options will be listed for trading on CME Globex, open outcry, and clearing submission via CME ClearPort.
scroll to end
http://www.cmegroup.com/tools-information/lookups/advisories/electronic-trading/20150914.html?mkt_tok=3RkMMJWWfF9wsRonuK3Nde%2FhmjTEU5z16uksXqayiokz2EFye%2BLIHETpodcMTsFqPb%2FYDBceEJhqyQJxPr3GLdkN0sV8RhjhCw%3D%3D#rus
UBS strategist 4 likely outcomes Fed meet
9:33a ET djones
This week, the SPDR S&P 500 ETF Trust (NYSE: SPY) has added 1.75 percent in advance of the Fed's Thursday decision.
UBS strategist Themos Fiotakis forecasted that "a decision to raise rates would be a surprise," but that the tightening path ahead is more important than the immediate move.
Ultimately, Fiotakis added that a dovish surprise would be good for stocks and credit and bad for bonds. The opposite result would "come at a cost to markets."
UBS' Themos Fiotakis said that Thursday's FOMC meeting is "one of the most uncertain" in recent history. Though there were certainly more important policy meetings in the past, "rarely has there been such a divide in opinion among economists and market participants on what the Fed is most likely to do."
Fiotakis used game theory to discover four potential paths for policy: (1) unchanged rates/ dovish outlook; (2) unchanged rates/ hawkish outlook; (3) hike/ dovish outlook; and (4) hike/ hawkish outlook.
Related Link: Cramer's Stock To Buy After A Fed Rate Hike
If UBS had to peg the results, Fiotakis would think a decision to raise interest rates would be a "surprise," meaning that results one and two are most likely. When it comes to market outlook, Fiotakis said that results two and three "would have a limited market impact in the medium term."
So, looking at the market results from either results one or four, Fiotakis said that the former would be "good for stocks and credit; medium term, bad for bonds." The latter would come "at a cost to markets."
Breaking that down a little further, Fiotakis forecasted that the longer the Fed waits, the "more likely a sell-off in long bonds of up to 50bps." In equity markets, a "relief rally" would be most likely in financials, technology and healthcare.
If the Fed surprises with a hike and hawkish tone, long-end rates would "jump higher," while the market could sell off credit and equities.
UBS likely 4 outcomes of Fed meeting
9:33 ET djones
This week, the SPDR S&P 500 ETF Trust (NYSE: SPY) has added 1.75 percent in advance of the Fed's Thursday decision.
UBS strategist Themos Fiotakis forecasted that "a decision to raise rates would be a surprise," but that the tightening path ahead is more important than the immediate move.
Ultimately, Fiotakis added that a dovish surprise would be good for stocks and credit and bad for bonds. The opposite result would "come at a cost to markets."
UBS' Themos Fiotakis said that Thursday's FOMC meeting is "one of the most uncertain" in recent history. Though there were certainly more important policy meetings in the past, "rarely has there been such a divide in opinion among economists and market participants on what the Fed is most likely to do."
Fiotakis used game theory to discover four potential paths for policy: (1) unchanged rates/ dovish outlook; (2) unchanged rates/ hawkish outlook; (3) hike/ dovish outlook; and (4) hike/ hawkish outlook.
If UBS had to peg the results, Fiotakis would think a decision to raise interest rates would be a "surprise," meaning that results one and two are most likely. When it comes to market outlook, Fiotakis said that results two and three "would have a limited market impact in the medium term."
So, looking at the market results from either results one or four, Fiotakis said that the former would be "good for stocks and credit; medium term, bad for bonds." The latter would come "at a cost to markets."
Breaking that down a little further, Fiotakis forecasted that the longer the Fed waits, the "more likely a sell-off in long bonds of up to 50bps." In equity markets, a "relief rally" would be most likely in financials, technology and healthcare.
If the Fed surprises with a hike and hawkish tone, long-end rates would "jump higher," while the market could sell off credit and equities.
UBS Says Huge Oil Merger Should Go Through: 3 Big Stocks to Buy
By Lee Jackson September 17, 2015 9:10 am EDT WallStWeek
As we pointed out recently, despite the woes in the energy sector over the past year, when the Federal Reserve starts raising interest rates, the sector often is the leader over the next 12 months and even beyond. With the possibility of an interest rate increase as early as Thursday, and despite many lowering price deck levels for oil for this year and next, this could mark the beginning of a turnaround for the sector.
In a new report from UBS, outstanding oil services analyst Angie Sedita points that with the huge merger of Baker Hughes Inc. (NYSE: BHI) and Halliburton Co. (NYSE: HAL) on the line, several media sources indicated last week that the U.S. Department of Justice will require Halliburton to find a single buyer for the assets it will have to divest to secure approval for the deal. While this may not be the case, UBS has argued for some time that the Justice Department wants a “single viable competitor,” and the $4.0 billion to $5.5 billion price tag makes it a big ticket. UBS believes that GE and Siemens are in the final round and have the deep pockets to buy the entire package.
While the UBS lowers the price targets on the land drillers, the firm stays positive on the big diversified oil services companies, and three still make sense for investors with patience and a long-term outlook.
Baker Hughes
The company agreed almost a year ago to the friendly merger with fellow oil-field giant Halliburton in a deal worth an astounding $34.6 billion. The tie-up between the two oil-field giants raised big questions about whether the takeover could survive antitrust scrutiny, given the level of consolidation that it promises within the oil production services business. Created in 1987 with the merger of Baker International and the Hughes Tool company, the company created innovative products like a rotary bit for drilling wells through rock.
The long wait to get the deal done with Halliburton may be starting to grind on some, but the merger agreement does allow the two companies to extend the deal into 2016. The UBS team still thinks that there is a 90% chance the deal is completed, and while Halliburton has maintained it will close this year, they see a 2016 close more likely. They also think that additional assets could be sold by the company in an even greater effort to get approval.
Baker Hughes investors are paid a 1.2% dividend. The UBS price target for the stock is $70. The Thomson/First Call consensus price target is $73.50. The stock closed Wednesday at $55.66.
Halliburton
The stock is down almost 18% since May and could be offering the best entry price point since last January. Halliburton now seems to be in the final stretch of getting the merger with Baker Hughes completed, as we pointed out, and the trick is to find the right buyers for the businesses that are required for the divestitures required by the Justice Department.
The oil-field giant announced last year a $1 billion investment to develop huge potential oil fields in Ecuador, and it has entered into a long-term deal with Petroamazonas, an Ecuador-based company involved in the exploration and development of the country’s oil reserves. With oil being absolutely demolished recently, this top oil service company is a great stock to buy on sale.
The company remains one of the top holdings in Jeffrey Ubbens’ $19 billion ValueAct Capital portfolio. It was also a new position added to Simon Sadler’s Segantii Capital hedge fund recently. Value buyers and bottom fishers are actively buying the stock at current levels.
Halliburton investors are paid a 1.95% dividend. The UBS target is $50, and the consensus target is $50.24. The shares closed Wednesday at $38.65.
Schlumberger
This oil-field services behemoth rebounded smartly off the lows printed in January, but it has rolled over again as oil prices have weakened. Schlumberger Ltd. (NYSE: SLB) is the world’s leading supplier of technology, integrated project management and information solutions to customers working in the oil and gas industry worldwide. Employing approximately 115,000 people and working in more than 85 countries, Schlumberger provides the industry’s widest range of products and services from exploration through production.
The second-quarter results actually were somewhat better than many on Wall Street expected. While Schlumberger did experience notable declines in both revenue and earnings, the results beat analysts’ estimates. Most of the decline in operating income and margin came from lower North American operations, particularly land activity. But global operations remained at least somewhat steady. With drilling picking up, and domestic rigs expected to be added this year and next, the prospects for the company look outstanding for patient investors.
UBS also notes that Schlumberger and the German equipment provider Bauer recently agreed to a non-binding letter of intent to form a joint venture for the development and construction of land rigs. Schlumberger has worked on a new land rig design for the past two years with Houston-based T&T Engineering, which it recently acquired.
Schlumberger investors are paid a 2.72% dividend. The $100 UBS target price is higher than the consensus target of $97.77. Shares closed Wednesday at $76.16.
ALSO READ: Is Kinder Morgan Undervalued?
Bottom line? You want to take an energy shot, do it with the big boys. If anybody survives this wicked downturn, it will be the large cap diversified leaders. They also will go higher, faster, when the market dog-piles the stocks once oil prices firm and turn around.
By Lee Jackson
Petrobras Hits Record Production Amid Brazil Crisis; Stock Climbs More Than 7%
Today 3:58 PM ET (Benzinga)
Shares of Petroleo Brasileiro SA - Petrobras (ADR) (NYSE: PBR) rose more than 7 percent on Wednesday trading.The surge was triggered by the announcement that the company had hit record production in August.Most of the oil and gas was produced in Brazil; however, the company also extracted resources from the Gulf of Mexico.
Brazil’s state-controlled Petrobras said, on Wednesday, that its average production of oil and natural gas (both in Brazil and overseas) had reached 2.88 million barrels of oil equivalent per day (boed) in August.
This compares to the 2.8 million boed produced on average in July and implies a 3.1 percent surge, month-over-month.
Moreover, the company assured, this is a new output record, surpassing the last high of 2.86 million boed set in December 2014. Year-over-year, production saw a 4.5 percent boost – from the 2.76 million boed registered in August 2014.
Related Link: Curbing Enthusiasm For Oil Upside
Corruption Scandal
The news came as a surprise to many investors and analysts, as the company is going through a massive corruption scandal that involves high ranked politicians and public servants.
Despite the turbulence, the company explained that it had managed to hit a new record on the back of the commencement of operation of the FPSO Cidade de Itaguaí on July 31. This platform is anchored in Iracema Norte, in the northwest section of the Lula field, and can process 150 thousand barrels of oil and 8 million cubic meters of gas each day.
Brazil's Production Numbers
In Brazil, the company disclosed production of 2.69 million boed, meaning that most of the oil and gas came from within the country. Moreover, if the company’s partners’ production is taken into account, Petrobras’ total production in the country reached 3.01 boed.
Disclosure: Javier Hasse holds no stakes in any of the securities mentioned.
Image Credit: Public Domain
© 2015 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Petrobras Hits Record Production Amid Brazil Crisis; Stock Climbs More Than 7%
Today 3:58 PM ET (Benzinga)
Shares of Petroleo Brasileiro SA - Petrobras (ADR) (NYSE: PBR) rose more than 7 percent on Wednesday trading.The surge was triggered by the announcement that the company had hit record production in August.Most of the oil and gas was produced in Brazil; however, the company also extracted resources from the Gulf of Mexico.
Brazil’s state-controlled Petrobras said, on Wednesday, that its average production of oil and natural gas (both in Brazil and overseas) had reached 2.88 million barrels of oil equivalent per day (boed) in August.
This compares to the 2.8 million boed produced on average in July and implies a 3.1 percent surge, month-over-month.
Moreover, the company assured, this is a new output record, surpassing the last high of 2.86 million boed set in December 2014. Year-over-year, production saw a 4.5 percent boost – from the 2.76 million boed registered in August 2014.
Related Link: Curbing Enthusiasm For Oil Upside
Corruption Scandal
The news came as a surprise to many investors and analysts, as the company is going through a massive corruption scandal that involves high ranked politicians and public servants.
Despite the turbulence, the company explained that it had managed to hit a new record on the back of the commencement of operation of the FPSO Cidade de Itaguaí on July 31. This platform is anchored in Iracema Norte, in the northwest section of the Lula field, and can process 150 thousand barrels of oil and 8 million cubic meters of gas each day.
Brazil's Production Numbers
In Brazil, the company disclosed production of 2.69 million boed, meaning that most of the oil and gas came from within the country. Moreover, if the company’s partners’ production is taken into account, Petrobras’ total production in the country reached 3.01 boed.
Disclosure: Javier Hasse holds no stakes in any of the securities mentioned.
Image Credit: Public Domain
© 2015 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.