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API lower build seen 4100K than prior week
note, doesn't always match with EIA Weds am
US API Crude Oil Inventories (Oct 23) W/W 4100K (Prev. 7100K)
couple China news AH ET times
20:12 News Bot: China's economy will not experience a hard landing in the short term, and is likely to rebound and stabilise, according to China Daily
20:15 News Bot: Standard Chartered sees weakness in China iron ore demand, due to lower steel production
US Companies Warn of Slowing Economy
Quarterly profits and revenue at big American companies are poised to decline for the first time since the recession, as some industrial firms warn of a pullback in spending.
From railroads to manufacturers to energy producers, businesses say they are facing a protracted slowdown in production, sales and employment that will spill into next year. Some of them say they are already experiencing a downturn.
"The industrial environment's in a recession. I don't care what anybody says," Daniel Florness , chief financial officer of Fastenal Co. , told investors and analysts earlier this month. A third of the top 100 customers for Fastenal's nuts, bolts and other factory and construction supplies have cut their spending by more than 10% and nearly a fifth by more than 25%, Mr. Florness said.
Caterpillar Inc. last week reduced its profit forecast, citing weak demand for its heavy equipment, and 3M Co. , whose products range from kitchen sponges to adhesives used in automobiles, said it would lay off 1,500 employees, or 1.7% of its total, as sales growth sagged for a wide range of wares.
The weakness is overshadowing pockets of growth in sectors such as aerospace and technology.
Industrial companies are being buffeted on multiple fronts. The slump in energy prices has gutted demand for drilling equipment and supplies. Economic expansion is slowing in China and major emerging markets such as Brazil , which U.S. companies have relied on for sales growth. And the dollar's strength also has eroded overseas profits.
The drag on earnings and sluggish growth projections for next year come as the Federal Reserve considers raising interest rates for the first time in nine years, and could add momentum to those in favor of postponing any rate increase until next year.
Profit and revenue are falling in tandem for the first time in six years, with a third of S&P 500 companies reporting so far. Analysts expect the index's companies to book a 2.8% decline in per-share earnings from last year's third quarter, according to Thomson Reuters .
Sales are on pace to fall 4%--the third straight quarterly decline. The last time sales and profits fell in the same quarter was in the third period of 2009.
At some companies, foreign-currency effects hurt results significantly. Consumer-products maker Kimberly-Clark Corp. predicted that currency swings would slash earnings by 25% this year, while Johnson & Johnson said that the dollar's moves would reduce sales growth by almost 7 percentage points this year, even without further fluctuations.
This week, another third of the S&P 500 are expected to report their results, including such giants as Apple Inc. , United Parcel Service Inc. and Exxon Mobil Corp.
Much of the anticipated decline stems from the hard-hit energy industry, where sales are expected to drop by more than a third from a year earlier and profits are likely to plummet 65%, Thomson Reuters says, based on analysts' estimates. Basic-materials companies face a 17% drop in profits, and industrial sales are expected to decline more than 5%.
United Technologies Corp. , which makes Otis elevators and Carrier air conditioners, said it expects profits to be flat or down in three of its four operating segments next year, despite strength in its U.S. operations. Chief Financial Officer Akhil Johri told investors last week that the Otis division's sales in China fell 19% in the third quarter as commercial construction slumped.
Other companies voiced similar concerns. "If you look at kind of the broad industrial-production index, you see industrial production sequentially coming down," said Fredrik Eliasson , chief sales and marketing officer at railroad operator CSX Corp.
CSX is scaling back some operations in response to declining coal shipments as power plants switch fuels, eliminating nearly 500 jobs in Corbin, Ky. , and Erwin, Tenn. In the current quarter, the company plans to reduce its average head count by 2% from the third-quarter level.
U.S. manufacturing production rose in September at its slowest pace in more than two years, the Institute for Supply Management reported earlier this month. Economic activity at 11 industries tracked by the group contracted during the month, while just seven reported growth. Meantime, manufacturers told ISM that customer inventories remained high, contributing to a slowdown in new orders.
Some investors and analysts worry that companies accustomed to boosting earnings by cutting costs, repurchasing shares and refinancing debt will soon have to face the reality of worsening sales. "The ability of corporations to take a 1% to 2% revenue line [gain] and turn it into 5% to 6% profit growth is waning," said Charlie Smith , chief investment officer of Fort Pitt Capital Group . "They've run out of rabbits to pull out."
Still, cost-cutting continues. Companies from Twitter Inc. and Biogen Inc. to Wal-Mart Stores Inc. and Monsanto Co. have announced job cuts in recent weeks. That could boost the U.S. unemployment rate, which ended September at 5.1%, its lowest point since April 2008 .
"Things are definitely a bit shakier than they were several months ago," said Joseph LaVorgna , chief U.S. economist at Deutsche Bank . But, he added, "the U.S. is fundamentally in decent shape."
Indeed, low fuel prices have boosted U.S. car sales and buoyed airlines' results, and the U.S. construction market remains robust. And, even among manufacturers, the aerospace industry is doing well. Technology giants Amazon.com Inc. and Microsoft Corp. posted strong results on Thursday, as did Google parent Alphabet Inc.
Such strength suggests that the broader economy is unlikely to succumb to the industrial sector's gloom, especially given robust profit margins, said Jeremy Zirin , chief U.S. equity strategist for wealth management at UBS. "The broad mosaic of data suggests that the U.S. economy is still doing OK," Mr. Zirin said. "This isn't a very bullish view, it's just saying things aren't as bad as feared."
Others worry that the slowdown is spreading to consumer businesses. Wal-Mart recently warned its sales this year are likely to be flat, down from projection of as much as 2% growth, and cut its earnings forecast for next year as it raises wages.
And truckload carriers have warned that they aren't witnessing the usual uptick in retailer demand as the holiday season approaches, thanks to stubbornly high inventories, said Alex Vecchio , a transportation analyst at Morgan Stanley . "Transportation companies are typically a leading indicator, and our data is not good," Mr. Vecchio said.
Write to Theo Francis at theo.francis@wsj.com and Kate Linebaugh at kate.linebaugh@wsj.com
(END) Dow Jones Newswires
10-25-15 2011ET
Copyright (c) 2015 Dow Jones & Company, Inc.
ECB survey lower inflation tgts ahead. B-H #s
Came AH. GDP not looking like a demand side push, yet.
The ECB survey of Professional Forecasters shows a decrease in their inflation forecast with mixed GDP outlook
Sees:
CPI 2015 0.1% from 0.2%
CPI 2016 1.0% from 1.3%
CPI 2017 1.5% to 1.6%
GDP 2015 1.5% from 1.4%
GDP 2016 1.7% from 1.8%
GDP 2017 1.8% from 1.8%
US Baker Hughes U.S. Rig Count (Oct 23) W/W 787 (Prev. 787)
- US Rotary Oil Rigs (Oct 23) 594 vs Prev. 595
- US Rotary Gas Rigs (Oct 23) 193 vs. Prev. 192.
(Baker Hughes Inc.)
ECB survey lower inflation tgts ahead. B-H #s
Came AH. GDP not looking like a demand side push, yet.
The ECB survey of Professional Forecasters shows a decrease in their inflation forecast with mixed GDP outlook
Sees:
CPI 2015 0.1% from 0.2%
CPI 2016 1.0% from 1.3%
CPI 2017 1.5% to 1.6%
GDP 2015 1.5% from 1.4%
GDP 2016 1.7% from 1.8%
GDP 2017 1.8% from 1.8%
US Baker Hughes U.S. Rig Count (Oct 23) W/W 787 (Prev. 787)
- US Rotary Oil Rigs (Oct 23) 594 vs Prev. 595
- US Rotary Gas Rigs (Oct 23) 193 vs. Prev. 192.
(Baker Hughes Inc.)
EIA #s build +
10:31 News Bot: US DOE U.S. Crude Oil Inventories (16-Oct) W/W 8028K vs. Exp. 3750K (Prev. 7562K), US crude output unchanged at 9.096mln bpd, according to the EIA
- US DoE Cushing OK Crude Inventory (Oct 16) W/W -78K vs. Exp. 600K (Prev. 1125K).
- US DoE Gasoline Inventories (Oct 16) W/W -1518K vs. Exp. -1000K (Prev. -2618K).
- US DoE Distillate Inventory (Oct 16) W/W -2622K vs. Exp. -1100K (Prev. -1520K).
- US DoE Refinery Utilisation (Oct 16) W/W 0.40% vs. Exp. -0.50% (Prev. -1.50%).
(U.S. Department of Energy)
Venez & OPEC $88 a barrel am
VIENNA -- Venezuela's oil Minister Eulogio Del Pino said Wednesday that his country proposed to a technical meeting between members of the Organization of the Petroleum Exporting Countries and producers outside the group to introduce an equilibrium price of $88 a barrel to guarantee investments.
"Our president [ Nicolas] Maduro sent to each one of the head of states of the countries that were participating in this meeting a letter to propose a summit meeting between OPEC and non- OPEC producing countries to discuss the stability of the market," the minister told reporters in Vienna .
"We are concerned about the depletion of reservoirs and about the decline of production...we are talking here about equilibrium price to sustain the production."
Venezuela has proposed to hold the summit in November to reserve the price and said it had also offered to coordinate the meeting. The country wants to establish a technical, coordinating committee among producer nations to oversee production, market and price in the coming years, he added.
Write to Summer Said at summer.said@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
10-21-15 0847ET
Copyright (c) 2015 Dow Jones & Company, Inc.
ClayTrader UWTI eod Monday
His chart eod 10/19 right to the $10.30 support line today.
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=117830713
China NDRC guy comments on fuel prices
Not certain what this means unless indicates they won't use government to support prices one way or other? You'd think they'd have been trying for lower prices to juice output. Can't see any reason to upside for them to have been trying for higher fuel costs?
22:35 News Bot: China NDRC vice chairman Hu says China is to further open up fuel prices based on the market
SA: Iran story pre market
UWTI holding about medium lows now. -0.67 10.93 was lower. Volume highish.
XLE -1.11 68.13 down by dollar unusual for it.
Iran urges OPEC to slash oil output
Oct 19 2015, 06:23 ET | By: Yoel Minkoff, SA News Editor Contact this editor with comments or a news tip
Iran Oil Minister Bijan Namdar Zanganeh has declared that OPEC member states should cut crude output to boost prices to a range of $70-$80 a barrel."No one is happy" with prices at current levels, Zanganeh told reporters in Tehran.Iran will be able to boost oil exports by 500K barrels a day within one week following the removal of sanctions, and could raise exports by 1M bpd within six months after the curbs are lifted.Crude futures -1.1% to $47.18/bbl.ETFs: USO, OIL, UCO, UWTI, SCO, BNO, DBO, DWTI, DTO, USL, DNO, OLO, SZO, OLEM
SA: Iran story pre market
UWTI holding about medium lows now. -0.67 10.93 was lower. Volume highish.
XLE -1.11 68.13 down by dollar unusual for it.
Iran urges OPEC to slash oil output
Oct 19 2015, 06:23 ET | By: Yoel Minkoff, SA News Editor Contact this editor with comments or a news tip
Iran Oil Minister Bijan Namdar Zanganeh has declared that OPEC member states should cut crude output to boost prices to a range of $70-$80 a barrel."No one is happy" with prices at current levels, Zanganeh told reporters in Tehran.Iran will be able to boost oil exports by 500K barrels a day within one week following the removal of sanctions, and could raise exports by 1M bpd within six months after the curbs are lifted.Crude futures -1.1% to $47.18/bbl.ETFs: USO, OIL, UCO, UWTI, SCO, BNO, DBO, DWTI, DTO, USL, DNO, OLO, SZO, OLEM
Oil futs US off $1 pre on Brent, China
UWTI -0.83 10.77
XLE -0.64 68.59
China's GDP projected to grow 6.7% YoY in 3Q15
22:00 ET
CHINA SEP INDUSTRIAL OUTPUT YY* DECREASE TO +5.7 % (FCAST 6.0 %) VS PREV 6.1 %
-----------
GDP is projected to grow 6.7% YoY in 3Q15, down from 7.0% in 2Q15, making it the slowest quarter since 1Q09. Key macroeconomic indicators continued to disappoint. Exports and imports contracted 5.9% and 14.4% in 2Q15 respectively, versus 2.2% and 13.6% in 1Q15 respectively. The trade surplus widened to USD 163.6 bn , up from 137.8 bn in 2Q15. Sluggish external demand would keep export growth negative in 4Q15. Among September data to be released, retail sales and industrial output are expected to grow 10.8% YoY and 6.0% respectively, versus 10.8% and 6.1% in Aug respectively. Meanwhile, FAI (YTD) is expected to grow 10.7%, versus 10.9% in Aug. On a quarterly basis, retail sales, industrial output and FAI (YTD) growth would have averaged 10.7%, 6.0% and 10.9% in 3Q respectively. For all the talk of rebalancing, investment continues to be the key growth driver, and FAI is likely to slow further. In the property sector, investment growth would only pick up once inventory levels drop meaningfully, which may take more than half a year. In the industrial sector, there is hitherto no concrete plan to destroy excess capacity. The outlook for manufacturing investment is particularly dire as aggregate demand - both external and domestic - remains weak and state-support for the sector remain limited. Infrastructure investment may pick up somewhat once fiscal stimulus ramps up. Even so, the impact of fiscal policy will be more muted than the 2008/2009 round. With such a huge - and growing - legacy of local government debt, the government is likely to be prudent with regards to fiscal spending. Monetary policy is no panacea either. Since the first rate cut in late 2014, loan growth has notably quickened (from 13.4% in Nov14 to 15.4% in Aug15). This is peculiar because judging from tepid IP, FAI, PMI and import numbers, loan demand should have been weak. Indeed, a PBoC survey showed that sentiment on loan demand plummeted below the trough of the global financial crisis. More loan growth would not boost GDP growth much if they were merely used for rolling over debts, or filling gaps in short term liquidity. More aggressive monetary and fiscal stimulus may arrest growth deceleration temporarily. This will buy much-needed time for China to improve its economic fundamentals - primarily through decisive market-oriented reforms. Much more needs to be done.
Saudi Tadawul Index 5 year h & others
I got UWTI -0.09 11.50 now. China has numbers soon tonight.
21:25 News Bot: Morgan Stanley says Saudi Arabia is unlikely to be in favour of an OPEC reduction as it sees its strategy on oil working
------------
http://www.bloomberg.com/news/articles/2015-10-18/u-a-e-stocks-advance-after-brent-crude-climbs-above-50
Equities in Saudi Arabia, OPEC’s biggest oil producer, led most Arab markets higher after global stocks rallied and Brent crude rose above $50 a barrel. Israeli stocks closed the highest in almost a month.
The Tadawul All Share Index climbed 1.2 percent to 7,792.62 at the close in Riyadh, led by a 2.7 percent increase in Saudi Basic Industries Corp., one of the world’s largest petrochemical producers, also known as Sabic. The correlation between the price of oil and Saudi stocks measured on a weekly basis was the strongest in five years. Dubai’s DFM General Index closed 0.3 percent higher and Abu Dhabi’s ADX General Index added 0.6 percent.
-------------
Premier Li said that achieving China’s growth target of about 7% is ‘not easy’ and has urged financial sector reforms to support the economy. (BBG)
- China state researcher Yu Bin has called for expansion in infrastructure investment quicker implementation of projects to support the economy. (BBG)
-----------
22:56 ET
Russia's real wages to show sluggish recovery as inflation backdrop stabilises
The labour market stance is set to remain intact vs a set of previous releases. The unemployment rate is struggling to remain flat at 5.4%, which corresponds to 5.6% in seasonally-adjusted terms. In terms of wages material revision of the wage bill is not anticipated - unless oil prices rise higher than $50 per barrel of Brent on a consistent basis. In September the real income will be mainly driven by a marginal improvement in the inflation backdrop vs the first two months of Q3 15, so that the final printing of real wages are anticipated to be a little bit better at -9.5% yoy than that of August (-9.8% yoy)
True enough now. Wonder about Fed.
Considering the Fed head was able to reduce the Carter era high inflation of 20-22% with policies that lead to a couple quick recessions, shouldn't the inverse be possible?
But now analysts refer to the 'pushing on a string' model when dealing with creating a little inflation that has always come with growth in past.
Maybe just the way it goes. Has surprised me that the run up hasn't begun the way did in prior times. Guess Great Recession was one of a kind.
Probably take a war to kick start lift off or just no war and 10 more years?
Still think if dump some bucks on those who would spend it all (low end Soc Sec Seniors), rebuild infrastructure, etc. would help. Just hoping that all this sitting on bags of money isn't a sign of something else. From a 'peace dividend' to whatever this is hasn't yet been fully played out.
oil rigs -10 for 7th week row
U.S. oil rig count drops by another 10 in seventh straight weekly drop
Oct 16 2015, 13:57 ET | By: Carl Surran, SA News Editor Contact this editor with comments or a news tip
The U.S. oil rig count falls for the seventh week in a row, as the latest Baker Hughes survey shows drillers removed 10 oil rigs in the week ended Oct. 16 to bring the total rig count down to 595, the fewest since July 2010.The number of active oil rigs has fallen sharply from an October 2014 high of 1,609, as low prices have hit drilling budgets and forced producers to cut back.Natural gas rigs rose by three to 192, sending the total rig count down by eight to 787, and is now 68% lower than the 1,918 rigs in service at this time last year.ETFs: USO, OIL, UCO, UWTI, SCO, BNO, DBO, DWTI, DTO, USL, DNO, OLO, SZO, OLEM
more on rigs & CFTC oil spec
14:55 News Bot: US Baker Hughes U.S. Rig Count (16-Oct) W/W 787 (Prev. 795)
- US Rotary Oil Rigs (16 Oct) 595 vs Prev. 605
?- US Rotary Gas Rigs (16 Oct) 192 vs. Prev. 189.
(Baker Hughes Inc.)
15:30 News Bot: CFTC says oil speculators increased their WTI net long position by 11,834 contracts to 178,906 for the last weeks data
US Blocks Alaskan Arctic Drilling for 2 Years
NT Times
HOUSTON — The Obama administration shut the door Friday on drilling in Alaska’s Arctic Ocean over the next two years, canceling auctions for drilling rights in the Chukchi and Beaufort seas.
The decision by the Interior Department was not surprising because it came less than a month after Shell Oil canceled the most advanced exploration project in the region because of disappointing results from a test well and high costs at a time when oil prices are extremely low.
Still, the announcement is symbolically important as the administration steps back from its cautious support of drilling in the Arctic.
“It does not make sense to prepare for lease sales in the Arctic,” said the Interior secretary, Sally Jewell. She cited the current plunge in oil prices, the amount of offshore acreage already under lease and Shell’s recent decision to put off further drilling after spending $7 billion on a project that ended up producing no oil.
The Interior Department also rejected longstanding appeals by Shell and Statoil, the Norwegian oil giant, to extend existing Arctic leases first obtained during administration of George W. Bush. Taken together, the decisions are a sharp blow to the Alaskan economy, which has been declining because of the fall in oil prices and the state’s slumping oil production.
Senator Lisa Murkowski of Alaska, a Republican, called it a “stunning, shortsighted move,” adding that it was “the latest in a destructive pattern of hostility” displayed by the Obama administration toward the energy industry in the state.
Several other oil companies had already decided to suspend plans to operate in the Alaskan Arctic, where winter darkness and harsh conditions make drilling expensive and potentially harmful to the fragile environment.
Environmentalists applauded the move after months of criticizing the administration for allowing Shell to go forward. Lois Epstein, Arctic program director for the Wilderness Society, called the decision “entirely reasonable” because of Shell’s failure.
Seven companies hold drilling rights in the Chukchi Sea, the area with the highest production potential, but Shell was the only one to begin an active exploration program. Shell’s many accidents and delays served as a cautionary example to other companies even before the price of oil collapsed by more than half over the last year.
For years, the Arctic appeared to be the next big frontier for oil companies with old, mature reserves. But with the advent of hydraulic fracturing of shale fields, the United States has become glutted with oil.
Offshore Arctic drilling is not only in decline in the United States but also in Canada and Greenland. Western sanctions over Russia’s policies in Ukraine have slowed exploration in the Russian Arctic.
US Cancels Sale of 2 Arctic Oil & Gas Leases
5:14 ET
WASHINGTON--Citing low oil prices and lack of company interest, the U.S. Interior Department on Friday said it is canceling the sale of a pair of offshore oil and natural gas leases.
The announcement comes a few weeks after Royal Dutch Shell said it was quitting its $7 billion Arctic campaign. Shell said in September its exploratory drilling in the Chukchi Sea off Alaska's Northwest coast this summer showed only traces of oil and natural gas.
"In light of Shell's announcement, the amount of acreage already under lease and current market conditions, it does not make sense to prepare for lease sales in the Arctic in the next year and a half," Interior Secretary Sally Jewell said Friday in a statement.
The lease sales were scheduled for 2016 and 2017 in the Chukchi and Beaufort Seas, respectively.
The Department also said it was denying requests from Shell and Statoil ASA to extend their leases, which would have allowed the companies to retain their drilling rights beyond 10 years. "Among other things, the companies did not demonstrate a reasonable schedule of work for exploration and development under leases," the Interior Department said.
No energy company currently is drilling in the U.S. portion of the Arctic Ocean . ConocoPhillips and Statoil ASA also own leases in the Arctic , though neither company has immediate plans to drill there. Shell also owns leases in the Beaufort Sea , east of the Chukchi, though it doesn't have immediate plans to drill there.
According to 2011 Interior Department data, federal waters in these two seas hold 22 billion barrels of technically recoverable oil and 93 trillion cubic feet of natural gas. The U.S. is currently producing about 9.5 million barrels of oil a day and about 90 billion cubic feet of gas a day, increasingly from tight shale-rock formations in places such as North Dakota and Texas .
Write to Amy Harder at amy.harder@wsj.com
What Slowdown? China’s Billionaire Count Surpasses U.S.
Never fear since US has more people in prison than they do! USA #1
6:25 pm HKT
Oct 15, 2015 CHINA REAL TIME
Cheng Wei, Didi Kuaidi chief executive, speaking at the World Economic Forum in Dalian, China, in September. Reuters
China has more billionaires than the U.S., according to one new account, thanks to a go-go stock market and a rising wave of tech entrepreneurs.
Shanghai-based research firm Hurun Report said in its annual China wealth report released on Thursday that mainland China is now home to 596 billionaires in dollar terms, compared with 537 in the U.S. If Hong Kong, Taiwan and Macau are included, the count from China rises to 715.
Hurun said this year has seen the fastest growth in Chinese wealth creation since the index started 17 years ago.
Credit for the rise, which comes despite China’s economic slowdown, goes to the country’s stock market, which has stumbled badly since June but is still considerably higher than last year. The benchmark Shanghai Composite Index is up roughly 41% compared with a year ago. Still, those fortunes could have been higher – the index was up about 60% in June from the start of the year before slumping. Hurun’s data are current as of Aug. 14, it said, meaning the survey doesn’t take into account a late August slump, though the firm said the drop wouldn’t significantly change the list.
Hurun also cited the rising number of technology entrepreneurs who have enjoyed a wave of investor interest in growing fields like apps and online-to-offline services. They include Zhou Qunfei, founder of Lens Technology, which makes touchscreen panels for gadgets like smartphones. It listed her fortune as $7.8 billion.
It also includes Cheng Wei, chief executive of ride-hailing app provider Didi Kuaidi Joint Co., which is ramping up competition with Uber Technologies in China, a market that they both see as the future of rides. Hurun listed Mr. Cheng’s fortune at $1 billion. He was listed as one of the youngest on the list, at 32 years old. Another young billionaire was Frank Wang, the 35-year-old founder and chief executive of drone maker SZ DJI Technology, with an estimated fortune of $3.4 billion.
In all, the number of people on the list from the technology business was up 43%, Hurun said.
Technology couldn’t power a tech entrepreneur to the top of the list, however. As Hurun said in August, property-and-retail magnate Wang Jianlin remains China’s richest person, supplanting Alibaba Group Holding’s Jack Ma.
–Carlos Tejada and Wei Gu
Schlumberger off revs
Figures, but then some things are soft all over. Appetites low.
Oilfield services provider Schlumberger saw its stock tick lower after it beat earnings estimates by a penny but missed on revenue. The company blamed pricing pressure for the disappointing results.
Wynn Resorts reported profit that was in line with estimates of 86 cents a share, but revenue came in at $996 million, falling short of Street projections of $1.03 billion. Shares tumbled 9 percent after hours.
US driving more miles
Gotta wonder just how long until oil powers decide to jack price.
David Wilson editor
(Bloomberg) -- Americans are increasingly taking to the highways and byways as lower gasoline prices and rising employment spur a “road trip recovery,” according to Nicholas Colas, chief market strategist at Convergex.
This year’s results show an average increase of 3.8 percent, which would be the biggest gain for a full year since 1989. The growth follows an upswing in travel since 2009.
“Silicon Valley better get cracking on those self-driving cars, hoverboards and whatever else they have in mind,” Colas wrote yesterday in a report, “because 2015 is proving to be a breakout year for American driving patterns.”
Cheaper fuel appears to be prompting travelers to drive rather than fly, the New York-based strategist wrote. Pump prices for regular gasoline averaged $2.49 a gallon across the U.S. through September, according to data from the American Automobile Association. The average fell from $3.51 a gallon in the same period of 2014.
Job gains are also contributing to the growth in driving, he wrote, citing survey results from the Commerce Department that show 85 percent of Americans drive to work. The economy added 1.8 million workers in the first nine months of 2015, according to the Labor Department.
“The drop in gasoline prices makes driving more affordable, and Americans are simply driving more,” Colas wrote. “Now if they would just stop long enough to spend some money, the U.S. economy might also hit its stride.”
Oil sets at Oct 2 low 46.38 Nymex
*MW Nov. oil falls 26 cents, or 0.6%, to settle at $46.38/bbl on Nymex
New Concern Over Quakes in Oklahoma Near a Hub of US Oil
http://www.nytimes.com/2015/10/15/us/new-concern-over-quakes-in-oklahoma-near-a-hub-of-us-oil.html?emc=edit_th_20151015&nl=todaysheadlines&nlid=16092731&_r=0
By MICHAEL WINES NY Times today
An earthquake in central Oklahoma last weekend has raised fresh concern about the security of a vast crude-oil-storage complex that sits at the crossroads of the nation's oil-pipeline network.
The Cushing quake is among the largest of thousands of temblors that have rocked central and northern Oklahoma in the past five years, largely set off by the injection of oil and gas industry wastes deep into the earth. The watery wastes effectively lubricate cracks, allowing rocks under intense pressure to slip past one another, causing quakes.
Cushing big build. record levels
Funny thing World sugar also -7%.
11:16 News Bot: US DOE U.S. Crude Oil Inventories (09-Oct) W/W 7562K vs. Exp. 2577K (Prev. 3073K); US crude output decreased by 0.829% to 9.096mln bpd, according to the EIA
- US DoE Cushing OK Crude Inventory (Oct 9) W/W 1125K vs. Exp. 200K (Prev. 98K).
- US DoE Gasoline Inventories (Oct 9) W/W -2618K vs. Exp. -1250K (Prev. 1910K).
- US DoE Distillate Inventory (Oct 9) W/W -1520K vs. Exp. -700K (Prev. -2458K).
- US DoE Refinery Utilisation (Oct 9) W/W -1.50% vs. Exp. -0.58% (Prev. -2.30%).
(U.S. Department of Energy)
------------------------------
11:25 News Bot: Crude futures remain under pressure post DoE inventories which showed stock levels at the highest level seasonally on record
So Korea Sept oil imports fell @10% Y/Y
hmm What gives, some kind of global slowdown?
19:19 News Bot: South Korean September oil imports fell around 10% Y/Y to 1.4mln tons
Gasoline prices slid to a one-month low
NEW YORK--Gasoline prices slid to a one-month low Wednesday amid expectations of weaker demand.
Gasoline demand typically declines in the fall as drivers take fewer vacations. Gasoline consumption fell to 9 million barrels a day in the week ended Oct. 2 , according to the Energy Information Administration , the lowest weekly level since May 1 . The EIA will release data for the week ended Oct. 9 on Thursday.
Wholesale gasoline prices have dropped sharply in the Chicago area and on the Gulf Coast , according to brokerage Powerline Group , suggesting those markets are well-supplied.
Gasoline futures settled down 0.57 cent , or 0.4%, at $1.3083 a gallon on the New York Mercantile Exchange . The national average retail gasoline price fell 0.6 cent to $2.303 a gallon, the lowest price for this date since 2006, according to AAA. Some analysts expect the average retail price to drop below $2 a gallon by the end of the year. Consumption can drop further in the winter as inclement weather keeps some drivers off the road.
Oil prices eased Wednesday amid concerns about the global oversupply of crude.
Oil rallied at the beginning of the month, with Brent crude passing the key $50 -a-barrel mark, on expectations that cuts in production capacity among major producers would curb supply. But strong output data from the Organization of the Petroleum Exporting Countries and the prospect of Iran's return to the market have fueled fears the global glut of crude isn't going away soon.
Iran's parliament on Tuesday approved the nuclear deal agreed with six world powers in July, bringing Tehran another step closer to the easing of international economic sanctions. This would pave the way for an increase of Iran's oil production toward 3.6 million barrels a day from 2.9 million barrels a day currently, according to the International Energy Agency .
"Oil producers will face another year of severe pain if Iranian sanctions are lifted early next year and other OPEC members do not make way," said David Hufton of PVM brokerage in a note to clients.
Light, sweet crude for November delivery settled down 2 cents at $46.64 a barrel on the New York Mercantile Exchange . Brent, the global benchmark, fell 9 cents , or 0.2%, to $49.15 a barrel on ICE Futures Europe.
Analysts expect weekly inventory data due Thursday to show that U.S. inventories of crude oil rose by 2.6 million barrels last week, while supplies of gasoline and distillate fuels, including diesel and heating oil, fell.
The American Petroleum Institute , an industry group, said late Wednesday that its own data for the same week showed a large increase of 9.3 million barrels in crude-oil supplies, according to sources. The group said that gasoline supplies fell by 5.0 million barrels and that U.S. distillate stocks fell by 2.7 million barrels in the week, according to sources.
Diesel futures rose 1.25 cents , or 0.8%, to $1.4833 a gallon.
Write to Nicole Friedman at nicole.friedman@wsj.com and Georgi Kantchev at georgi.kantchev@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
10-14-15 1657ET
Copyright (c) 2015 Dow Jones & Company, Inc.
API & Cushing April build. CLZ5 falls
AH 47.16 to 46.67 UWTI 10.85 -0.36 -3.21%
16:38 News Bot: US API Crude Oil Inventories (Oct 9) W/W 9300K (Prev. -1200K) biggest build since April
- API Cushing Inventories (Oct 9) W/W 1400K vs. Prev. -100K.
- API Gasoline Inventories (Oct 9) W/W -5000K
- API Distillate Inventories (Oct 9) W/W -2700K
- Refinery capacity utilisation fell 1.6% to 86.6%
(RTRS)
Crude oil futures settle
16:12 News Bot: US crude oil futures settle at USD 46.64/bbl, down USD 0.02 (-0.04%) Brent crude futures settle at USD 49.15/bbl, USD 0.09 (-0.18%)
True, and Chinese PPI
22:22 News Bot: Chinese PPI (Sep) Y/Y -5.90% vs. Exp. -5.90% (Prev. -5.90%)
Chinese PPI
22:22 News Bot: Chinese PPI (Sep) Y/Y -5.90% vs. Exp. -5.90% (Prev. -5.90%)
Some AHr oil comments & others
Commodities
Libyan oil production was at 504k bpd, according to the government oil minister. (RTRS)
Note: During August and September, Libyan oil output averaged 350-355K bpd.
Analysts at Citi suggest oil markets are `setting itself up for another sell-off`. (BBG)
16:30 News Bot: According to a state regulator, none of the oil producers in the northern Dakota region are operating in excess of 10 drilling rigs today
------------
Fed discount rate minutes showed that 8 regional banks want an increased discount rate vs. 5 banks in the previous vote. (BBG)
Fed's Bullard (non-voter, hawk) said that a lift-off is still appropriate despite challenges and that the FOMC will act in an "exceptionally accommodative" manner, although added that it will be difficult for the FOMC to raise interest rates in October following only one extra month’s worth of data. (RTRS)
And German, U.K. #s coming in light as to retail & output.
Law suit involving CS ETNs UWTI. leverage, etc.
http://finance.yahoo.com/news/securities-arbitration-law-firm-klayman-202300311.html
The Securities Arbitration Law Firm of Klayman & Toskes, P.A. Announces Investigation into FINRA Sales Practices Violations Related to Credit Suisse X-Links and Velocity Shares ETNs
Business Wire Klayman & Toskes, P.A.
1 hour ago
BOCA RATON, Fla.--(BUSINESS WIRE)--
The Securities Arbitration Law Firm of Klayman & Toskes, P.A., www.nasd-law.com, announces an investigation into Financial Industry Regulatory Authority (FINRA) sales practice violations by major Wall Street brokerage firms, including Credit Suisse Securities USA (“Credit Suisse”), related to Credit Suisse X-Links and Velocity Shares Exchanged Traded Notes (ETNs). Credit Suisse X-Links and Velocity Shares ETNs are issued by affiliated banks, Credit Suisse A.G and Credit Suisse Group A.G., ADR (CS). In some instances, Credit Suisse X-Links and Velocity Shares performance is linked to oil prices, energy-related master limited partnerships and commodity indexes. Credit Suisse manages its proprietary X-Links and Velocity Shares ETNs, commonly known as structured securities products, to generate greater returns through the use of embedded derivatives designed to track the performance of a volatile security, index, commodity or currency, many times without any principal protections.
FINRA sales practice rules require a fair and balanced representation to investors that Credit Suisse X-Links and Velocity Shares ETNs are more complex and risky than a simple “interest rate” credit when based on a volatile index or commodity. Credit Suisse underwrites, manages and markets billions of dollars in Credit Suisse X-Links and Velocity Shares ETNs including the following:
Credit Suisse S&P MLP ETN (NYSE Arca: MLPO)
Credit Suisse X-Links Commodity Benchmark ETN (NYSE Arca: CSCB)
Credit Suisse X-Links Commodity Rotation ETN (NYSE Arca: CSCR)
Credit Suisse X-Links Cushing MLP Infrastructure ETN (NYSE Arca: MLPN)
Credit Suisse Velocity Shares 3X Long Crude ETN (NYSE Arca: UWTI)
Credit Suisse Velocity Shares 3X Natural Gas ETN (NYSE Arca: VGAZ)
On August 24, 2015, the Securities Exchange Commission (SEC) issued a National Exam Program – Risk Alert Report which reviewed sales practices violations of major Wall Street brokerage firms related to supervision and sales of Structured Securities Products, similar to Credit Suisse X-Links and Velocity Shares ETNs. According to the SEC examination, deficiencies were found in some brokerage firms’ supervisory and sales practices related to the determination of “suitability” and “levels of concentration” in customer accounts.
Our investigation of major Wall Street brokerage firms, including Credit Suisse relates to sales practices related to Credit Suisse X-Links and Velocity Shares ETNs. Brokerage firm violations of FINRA sales practice rules may include misrepresentations and omissions of material facts, conflicts of interest, unsuitable investment advice, securities concentration or the failure to supervise its financial advisors. Our investigation relates to investments in Credit Suisse X-Links and Velocity Shares ETNs designed to track the Price of Oil, MLP Pipeline Indexes, Commodities Baskets, and in some instances are leveraged up to 300%.
About Klayman & Toskes, P.A.
Klayman & Toskes, P.A., an experienced, qualified and nationally recognized securities litigation law firm, is currently investigating FINRA sales practice violations of major Wall Street brokerage firms related to the sale of Credit Suisse X-Links and Velocity Shares ETNs. Investors who have knowledge or experience related to the sales practices of brokerage firms and its financial advisors’ recommended investment in Credit Suisse X-Links and Velocity Shares ETNs, contact Steven D. Toskes, Esq. at 888-997-9956.
Destination: http://nasd-law.com/the-securities-arbitration-law-firm-of-klayman-toskes-p-a-announces-investigation-into-finra-sales-practices-violations-related-to-credit-suisse-x-links-and-velocity-shares-etns/
View source version on businesswire.com: http://www.businesswire.com/news/home/20151013006828/en/
Contact:
Klayman & Toskes, PA
Steven D. Toskes, Esq., 888-997-9956
stoskes@nasd-law.com
www.nasd-law.com
DRYS lists on Nasdaq Capital Market <$1
R/S pending when price fallen so low & this too.
Title: DRYSHIPS INC. ANNOUNCES LISTING TRANSFER TO NASDAQ CAPITAL MARKET
Link to press release: http://dryships.irwebpage.com/ir_press.html?irp=pr2&relid=584898
This information is distributed by Capital Link, Inc. - Investor Relations
230 Park Avenue, Suite 1536
New York, NY 10169
Tel: (212) 661-7566
Fax: (212) 661-7526
Email: press@mailing.irreleases.com
DRYSHIPS INC. ANNOUNCES LISTING TRANSFER TO NASDAQ CAPITAL MARKET
ATHENS, GREECE — October 13, 2015 - DryShips Inc. (NASDAQ:DRYS) (the "Company" or "DryShips"), a global provider of marine transportation services for drybulk cargoes, and through its affiliate, Ocean Rig UDW Inc., of off-shore contract drilling oil services, announced today that it received a positive determination from the Nasdaq Stock Market granting approval of the Company's request to transfer its listing to the Nasdaq Capital Market from the Nasdaq Global Select Market.
The Company's securities will begin trading on the Nasdaq Capital Market effective at the start of trading on Tuesday, October 13, 2015. The Company's shares will continue to trade on Nasdaq under the symbol "DRYS." The Nasdaq Capital Market is a continuous trading market that operates in substantially the same manner as the Nasdaq Global Select Market, and listed companies must meet certain financial requirements and comply with Nasdaq's corporate governance requirements.
As previously reported, DryShips was notified by Nasdaq on April 13, 2015, that it no longer satisfied the minimum bid price requirement for continued listing of $1.00 per share, as set forth in Nasdaq Listing Rule 5450(a)(1). In anticipation of not meeting the minimum bid price requirement by October 12, 2015, the end of its initial 180-day grace period, the Company applied to transfer the listing of its stock to the Nasdaq Capital Market. As a result of the transfer to the Capital Market, the Company is being afforded an additional 180-day grace period to regain compliance with the Nasdaq's minimum bid price requirement. In order to regain compliance, the minimum bid price per share of the Company's common stock must be at least $1.00 for at least ten consecutive business days during the additional 180-day grace period, which will end on April 11, 2016. If the Company fails to regain compliance during this grace period, the Company's common stock will be subject to delisting by Nasdaq. The Company has provided written notice of its intention to cure the minimum bid price deficiency during the second grace period by effecting a reverse stock split, if necessary.
About DryShips Inc.
DryShips Inc. is an owner of drybulk carriers that operate worldwide. Dryships also has an affiliate Ocean Rig UDW Inc., an offshore deepwater drilling services company, which owns and operates 13 offshore ultra deepwater drilling units, comprised of 2 ultra deepwater semisubmersible drilling rigs and 11 ultra deepwater drillships, 1 of which is scheduled to be delivered to Ocean Rig during 2017, 1 of which is scheduled to be delivered during 2018 and 1 of which is scheduled to be delivered during 2019. DryShips owns a fleet of 36 drybulk carriers, comprising 10 Capesize, 24 Panamax and 2 Supramax with a combined deadweight tonnage of approximately 3.7 million tons.
DryShips’ common stock is listed on the NASDAQ Capital Market where it trades under the symbol “DRYS.”
Visit the Company’s website at www.dryships.com
OPEC & IEA Butt Heads Over Oil Market Recovery
couple hours ago oilpro.com
The global supply glut will persist through 2016, the IEA said in its monthly oil market report on Tuesday, as demand growth slows from a five-year peak. Conversely, OPEC's monthly report on Monday said that global oil consumption will rise while non-OPEC supply will contract in 2016.
Observe the contrast between the OPEC chief's words and those in the IEA report:
OPEC Secretary-General Abdullah Al-Badri: "The current situation in the market is positive...I expect to see a balanced market in 2016, if the current situation persists." The 12-member group projects US oil production will fall next year for the first time in 8 years.
IEA: “The market may be off balance for a while longer,” the IEA said. “A projected marked slowdown in demand growth next year and the anticipated arrival of additional Iranian barrels — should international sanctions be eased — are likely to keep the market oversupplied through 2016.”
Overall, the IEA report is more bearish in terms of outlook. Here are some of the key takeaways:
2016 Demand Outlook "Markedly Softer"
The IEA said that global oil demand growth will revert to long-term trend levels of 1.2 M/bpd next year, down from 1.8 M/bpd in 2015, due to a weaker economic forecast for oil producers, such as Brazil, Canada, Russia, Venezuela, and Saudi Arabia.
Global consumption will average 95.7 M/bpd next year, approximately 100,000 bpd less than forecast in last month’s report.
“The demand outlook for 2016 looks markedly softer” due to “downgrades to the macroeconomic outlook and expectations that crude oil prices will not repeat the heavy declines seen in 2015,” the IEA said.
Iran, Iraq To Add To Glut
Iran could increase production to 3.6 M/bpd from its current 2.9 M/bpd once sanctions are rescinded early next year, the IEA estimated. This new supply could be added in six months and nearly double the rise in oil inventories projected for 2016, the IEA said.
Meanwhile, record production from Iraq drove supplies from OPEC countries higher in September, the IEA said. Iraq increased output by 130,000 bpd to 4.3 M/bpd. However, "severe budgetary strain and ongoing issues with security and infrastructure are likely to limit supply growth in the near term,” the report said.
OPEC Output Up
OPEC production increased by 90,000 bpd to 31.72 M/bpd in September, the highest level since July, and north of the group's 30 M/bpd recommended output ceiling, the IEA said. Output from Saudi Arabia was slightly lower than August at 10.2 M/bpd, however production remained above 10 M/bpd for the seventh consecutive month.
While the IEA raised estimates for non-OPEC supply next year, amid stronger-than-expected production Brazil, Canada and Russia, it will still contract significantly in 2016.
Total supply from non-OPEC countries is seen to fall by 500,000 bpd, which the IEA said in last month's report was the steepest drop since 1992. As noted above, the IEA forecasts US oil production will decline to 12.56 M/bpd in 2016, from 12.75 million this year.
“Non-OPEC supply growth is disappearing fast,” the agency said. “Much of the slowdown is in the US."
NYT: US-Russia proxy war Syria. TOW
Headline today.
BEIRUT, Lebanon — Insurgent commanders say that since Russia began air attacks in support of the Syrian government, they are receiving for the first time bountiful supplies of powerful American-made antitank missiles.
With the enhanced insurgent firepower and with Russia steadily raising the number of airstrikes against the government’s opponents, the Syrian conflict is edging closer to an all-out proxy war between the United States and Russia.
The increased levels of support have raised morale on both sides of the conflict, broadening war aims and hardening political positions, making a diplomatic settlement all the more unlikely.
The American-made TOW antitank missiles began arriving in the region in 2013, through a covert program run by the United States, Saudi Arabia and other allies to help certain C.I.A.-vetted insurgent groups battle the Syrian government.
Central Bankers Urge Fed to Get On With Interest-Rate Increase
http://www.marketwatch.com/story/fed-officials-seem-ready-to-deploy-negative-rates-in-next-crisis-2015-10-10
Federal Reserve officials now seem open to deploying negative interest rates to combat the next serious recession even though they rejected that option during the darkest days of the financial crisis in 2009 and 2010.
“Some of the experiences [in Europe] suggest maybe can we use negative interest rates and the costs aren’t as great as you anticipate,” said William Dudley, the president of the New York Fed, in an interview on CNBC on Friday.
The Fed under former chairman Ben Bernanke considered using negative rates during the financial crisis, but rejected the idea.
“We decided — even during the period where the economy was doing the poorest and we were pretty far from our objectives — not to move to negative interest rates because of some concern that the costs might outweigh the benefits,” said Dudley.
Bernanke told Bloomberg Radio last week he didn’t deploy negative rates because he was “afraid” zero interest rates would have adverse effects on money markets funds -- a concern they wouldn’t be able to recover management fees -- and the federal-funds market might not work. Staff work told him the benefits were not great.
But events in Europe over the past few years have changed his mind. In Europe, the European Central Bank, the Swiss National Bank and the central banks of Denmark and Sweden have deployed negative rates to some small degree.
“We see now in the past few years that it has been made to work in some European countries,” he said.
“So I would think that in a future episode that the Fed would consider it,” he said. He said it wouldn’t be a “panacea,” but it would be additional support.
In fact, Narayana Kocherlakota, the dovish president of the Minneapolis Fed, projected negative rates in his latest forecast of the path of interest rates released last month.
Kocherlakota said he was willing to push rates down to give a boost to the labor market, which he said has stagnated after a strong 2014.
Although negative rates have a “Dr. Strangelove” feel, pushing rates into negative territory works in many ways just like a regular decline in interest rates that we’re all used to, said Miles Kimball, an economics professor at the University of Michigan and an advocate of negative rates.
But to get a big impact of negative rates, a country would have to cut rates on paper currency, he pointed out, and this would take some getting used to.
For instance, $100 in the bank would be worth only $98 after a certain period.
Because of this controversial feature, the Fed is not likely to be the first country that tries negative rates in a major way, Kimball said.
But the benefits are tantalizing, especially given the low productivity growth path facing the U.S.
With negative rates, “aggregate demand is no longer scarce,” Kimball said.
Beijing's Market Rescue Leaves China Stocks Stuck in the Doldrums
Six weeks after the Chinese stock market hit a floor following a sustained selloff, Beijing can claim credit for halting the decline--but not much else.
The Chinese government, which some analysts estimate has spent hundreds of billions of yuan buying stocks to stop the crash, is now left with a market in the doldrums. Shares are languishing near their lows, trading volume is down by about 70% from a peak in June, and volatility has fallen by more than half since July's record. Valuations in some parts of the market remain among the most expensive anywhere.
"Low volume, low volatility and a tight trading range" are hallmarks of a market getting stuck, said Hao Hong, managing director at Bank of Communications Co.
If history is a guide, the market could be stuck for some time. Shanghai's largest selloff on record, which lasted more than four months during the global financial crisis, knocked 50% off the market's value. After the benchmark rallied in 2009, it languished for years thereafter.
In the heat of this summer's selloff, Beijing promised that brokerages would buy shares as long as the Shanghai Composite Index remained under the 4500 level. But authorities appear to have given up. After plunging as much as 41% from June to its low point on Aug. 26 , the benchmark settled into a tight trading range for more than a month.
The Shanghai index rose 4% in the two trading days the past week, after the market reopened on Thursday following a weeklong holiday. It closed up 1.3% on Friday at 3183, still 41% away from the 4500 level.
The weeks of late-day stock surges--indications of intervention by state-backed funds--have been absent recently. Shares of resource-investment company Guangdong Meiyan Jixiang Hydropower surged as much as 153% after disclosing in early August that government agency China Securities Finance Corp. had become its largest shareholder. They have since plummeted 38%.
By late September, trading volume for China's domestic stock market thinned to below 30 billion shares in a single session. That compares with a record of more than 100 billion shares in early June. The average daily volume last month was at its lowest since February.
Volatility has fallen by more than half since a record in July. During the selloff, the Shanghai Composite swung as much as 10% in a single session. In the past 10 trading days, the range has narrowed to an average of less than 2%.
One reason for the relative quiet is that regulators have clamped down on the official and unofficial channels that funded investors' stock-buying. Debt provided by mostly local brokerages has dropped below one trillion yuan ( $157 billion ) for the first time since last year, having hit a record 2.27 trillion yuan in June.
At 2.2% of total mainland market capitalization, the level of such margin lending in China is comparable to that in the U.S., according to research by Goldman Sachs Group Inc. Leveraged bets now account for less than 5% of the mainland market's turnover, compared with more than 19% in March, according to database provider Wind Information Co.
China's stock-futures market has suffered an even bigger reversal. Trading volumes plunged on Sept. 7 , when a ban on individual investors trading more than 10 contracts a day took effect. The main CSI 300 stock futures index became the most actively traded of its kind globally last December. Now, daily volumes have been lower than when the product first traded in April 2010 .
One factor that hasn't changed: Chinese stocks' extreme valuations.
The ChiNext Price Index, a gauge of startup shares, trades at an average 68 times price-to-earnings, compared with more than 100 times before the selloff. Shanghai's average of 13 times compares with seven times for Chinese firms trading in Hong Kong .
"Valuations are cheap on an aggregate market level" in Shanghai , said Caroline Maurer , who manages greater Chinese equities for BNP Paribas Investment Management . But that is because financial companies, a bellwether for the Chinese economy, comprise a disproportionate share of the index, she added. Median valuations for Shanghai are still at around 39 times, skewed by technology stocks.
The selloff has made investors wary. BNP Paribas cut its exposure to the domestic market during the selloff to as little as 4% of its greater China equities fund from as much as 15%.
Beijing's aggressive moves to curb activities it deems "malicious" or speculative also have discouraged buying.
To be sure, local investors have returned to the market after previous bubbles have burst. The Shanghai benchmark has gone through more than 50 bull and bear markets in its short 25-year history.
Still, projections by local brokerages that the Shanghai Composite will trade in the 3000 to 3500 range are overly optimistic, said Bank of Communications' Mr . Hong. "Domestic brokers are still quite reticent to speak out and tend to be a bit more bullish," he said.
For the time being, the Chinese appear to be finding other assets far more attractive. Yields on municipal and short-term corporate bonds have fallen, signaling high demand.
Wealth-management products, many of them invested in bonds, can return more than 4% annually, and China's property market is showing signs of recovery. China Vanke Co. , one of the nation's largest developers, was recently able to sell five-year bonds at 3.5% yields, comparable to returns for long-term Chinese government bonds.
Write to Chao Deng at Chao.Deng@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
10-11-15 0200ET
Copyright (c) 2015 Dow Jones & Company, Inc.
PIRA's Ross Sees Oil Rebounding as Demand Set to Top Supply
http://www.bloomberg.com/news/articles/2015-10-08/oil-guru-sees-crude-climbing-as-demand-overtakes-supplies
The oil guru who predicted last year’s rout before turning bullish in 2015 says "new capital discipline" in the industry will allow demand to catch up with crude supplies, boosting prices.
Gary Ross, the founder and chairman of consultants PIRA Energy Group, said a key driver for rising prices will be the lack of spare production capacity in the industry to meet growing demand. There’s “not much available,” he said in comments Thursday at a seminar hosted by PIRA in New York.
It will take the U.S. shale industry at least nine months to ramp production back up and boost output after prices rise to more profitable levels, Ross said. Output is falling every month, especially in the Eagle Ford and Bakken shale fields in Texas and North Dakota, he said.
Ross, who last year turned bearish on oil before prices shrank by half, is at odds with other analysts and investors bracing for further declines. The recent rally in prices will fade because of weak fundamentals, Goldman Sachs Group Inc. analysts including Jeffrey Currie and Damien Courvalin said in a report Thursday.
Saudi Policy
Saudi Arabian officials hinted at a PIRA conference last October that they would change their oil policy. OPEC’s biggest oil-exporting nation announced weeks later that it would maintain production to defend market share, sending prices plunging.
There’s “no reason to change policy, because it’s working,” Ross said when asked about Saudi policy Thursday. The drop in U.S. shale activity was one of the goals of the Saudi policy, he said.
Ross predicted Saudi Arabian Oil Co, the state-run oil company, will boost its official selling price for crude in November. “Next month, they are going to go up, you wait and see,” he said, while not specifying a region. Aramco cut November 2015 pricing for oil sales to Asia and the U.S., according to an e-mailed statement on Oct. 5.
West Texas Intermediate oil rose $1.62 to settle at $49.43 a barrel on the New York Mercantile Exchange. It was the highest close since July 21. Brent, the benchmark for more than half the world’s crude, climbed $1.72 to $53.05 on the London-based ICE Futures Europe exchange. Both crudes remain more than 50 percent lower than their peak prices last year.
oil, inflation, CFTC long oil specs rises
In terms of economic releases, next week we have the OPEC's monthly oil market report, the BoJ minutes release on Tuesday, the US Retail Sales (Advanced reading) on Wednesday, Empire Manufacturing on Thursday and US JOLTS on Friday.
(RANsquawk)
14:29 News Bot: Japanese finance minster Aso states that the BoJ will maintain QQE as long as it is required in order to reach 2% inflation at stable levels
14:51 News Bot: Fed's Evans says that first rate hike mid-2016 is consistent with hitting inflation mandate of 2%
15:28 News Bot: CFTC says oil speculators increased their WTI net long position by 19,298 contracts to 167,072 for the last weeks data
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