FINANCIAL TSUNAMI IN THE MAKING

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Why Crude Prices Are Heading For Another Deep Plunge
March 10, 2016

In this bipolar market, where only momentum, liquidity, technicals and short squeezes matter, as well as the occasional kneejerk reaction to a flashing red headline (usually some lie out of Venezuela or Nigeria about an imminent OPEC meeting which has not even been scheduled), one thing that no longer seems to have an impact on prices is actual news and fundamentals. So to help those who are blindly following the price of oil as an indicator of what is happening, here is a brief recap of the main news and research reports that should be impacting where oil trades today, but almost certainly won’t.

Among today’s key highlights compiled by Bloomberg we learn that JBC Energy doesn’t expect China to maintain record crude imports seen in Feb. as refinery maintenance, elevated storage impact. FGE says proposed producer accord to freeze output a “joke”, while Deutsche Bank says “fading oil demand may hamper price recovery.”

Here are the top stories via Bloomberg:

JBC Energy

China probably can’t maintain Feb.’s record crude imports amid refinery maintenance, storage capacity limitations

Feb. imports likely were boosted by “continued weakness in outright prices,” higher crude runs at teapot refineries

Facts Global Energy chairman Fereidun Fesharaki

Deal to cap crude output at record “a joke”; production freeze is “nonsense”

Libya can boost output to 1.2m b/d, taking prices down to $20/bbl

CNPC Chairman Wang Yilin

Current $30-40/bbl oil price not sustainable; $50-60 a “reasonable” range
Co. drafting development plans for long-term low oil price environment

Bloomberg story

Oil producers slow to add hedges as they wait for higher prices
As prices continue to rise, “we should see producer hedging accelerate,” says BNP Paribas head of commodity markets strategy Harry Tchilinguirian

Eurasia Group global energy, natural resources director Bruno Stanziale

Oil at $50 will bring U.S. producers back to mkt
Oil prices to see “gradual” rise to around $40/bbl by yr-end, avg. $50/bbl in 2017; price “volatility will dry up”

Institute for Energy Research

U.S. shale oil boom makes renewable fuels standard obsolete, helped to reduce dependence on imports

JBC Energy

European gasoline cracks to see further upside in coming wks on higher U.S. consumer demand

Increased gasoline imports by Nigeria may be supporting Mediterranean market

Deutsche Bank report

Fading Chinese oil demand may hamper price recovery
Chinese fuel consumption “may begin to flatten more quickly than some long-term projections indicate.” This could reduce global oil demand growth to 800k b/d by 2024, compared w/ 1.1m b/d from 2000-2016

ESAI report

Libyan production will not recover as “the ongoing civil war and the rise of ISIS in Libya will carry on for years”: Boston-based consultant
* * *

And now back to your liquidity/squeeze driven melt up/down.

http://www.zerohedge.com/news/2016-03-09/output-freeze-joke-china-demand-fall-and-other-news-should-be-moving-oil