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December 2024 DDD
- Thread starter ducati916
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hijack , more like confirming his suspicions/predictions
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Oil News:
Slower and shallower were the two key takeaways for the Federal Reserve's 2025 rate policy outlook, with a suggested prolonged pause in rate-cutting next year adding insult to the oil market’s injury. China remains a bearish factor for oil with almost all 2025 outlooks trying to outcompete one another in terms of bearishness, all this leading to a dip in Brent prices to $72 per barrel again.
Chinese More Bearish on China. China’s state refining giant Sinopec (SHA: 600028) expects the country’s oil consumption to peak by 2027 at 16 million b/d, with growth only coming from the petrochemicals sector as both gasoline and diesel are expected to fall next year, by 2.4% and 5.5%.
Oil Majors Swap Assets in Australia. US oil major Chevron (NYSE:CVX) announced it would sell its interest in the North West Shelf venture it co-operates with Australia’s Woodside (ASX:WDS) in return for the latter’s 13% stake in the $34 billion Wheatstone LNG project and an associated field.
US Arbitrage to Europe Narrows. The spread between WTI and Brent futures narrowed to $3.40 per barrel this week, the smallest reading since October 2023 as tight crude inventories in the United States strengthened the US benchmark, restricting US oil exports after record volumes to NW Europe last month.
Brazil Sweetens Upstream Offering of 2025. As Brazil prepares to hold its next upstream licensing round in the first half of 2025, its Energy Ministry announced it would add 393 new oil exploration blocks and 5 discovered fields to its permanent offer portfolio, mostly offshore blocks in the Santos basin.
Iron Ore Set to Fall Through Key Barrier. Disappointed by the lack of improvements in China’s economy and the Australian government’s highly bearish forecast that sees iron ore averaging $80 per metric tonne in 2025, the metal posted four consecutive days of declines and dropped toward $101/mt.
Oil Major Clinches Iraq Megadeal. UK oil major BP (NYSE:BP) agreed on technical terms with the government of Iraq to revive one of the largest oil fields in the country, Kirkuk, a decade after it was ravaged by the Islamic State, marking a return of BP to the field that it initially discovered in 1927.
King Coal Surprises Everyone, Again. The International Energy Agency has revamped its coal demand forecast again, expecting global consumption for coal to hit new records every year through at least 2027, increasing to nearly 8.9 billion tonnes by 2027 largely thanks to India and China.
US Graphite Producers Demand Massive Tariffs. US producers of graphite have filed petitions with two federal agencies this week, asking for investigations on potential Chinese violations of anti-dumping laws and demanding that the White House slap a punitive 920% tariff on China-produced graphite.
US EPA Approves California’s Fossil Car Ban. The US Environmental Protection Agency approved California’s landmark plan to ban gasoline-only vehicles by 2035, as the automotive industry expects President-elect Trump to rescind federal mandates on EV sales and tighter vehicle emission standards.
Cocoa Futures Soar to Record Highs. Almost tripling over the course of 2024, cocoa futures rose to an all-time high of $12,636 per metric tonne this week as the Ivory Coast’s harvest outlook once again downgraded to 1.9 million tonnes, almost 15% lower than the government’s own forecast.
UAE Woos Drillers to Form JV. ADNOC Drilling, the upstream unit of the UAE’s state oil firm ADNOC, has formed Turnwell Industries, a joint venture with oilfield service majors SLB (NYSE:SLB) and Patterson-UTI (NASDAQ
TEN), seeking to tap into the country’s 220 billion barrels of unconventional oil.
Trump Threatens Europe to Buy More US Oil. US President-elect Donald Trump said that the EU could face tariffs if the regional bloc does not shrink its widening trade deficit with the United States by purchasing more US oil and gas, extending the tariff threat beyond China, Canada and Mexico.
Venezuela Resumes Swap Deals with India. India’s largest private refiner Reliance has resumed an oil swap deal with Venezuela’s PDVSA, sending a 500,000-barrel cargo of heavy naphtha in return for a VLCC laden with heavy Venezuelan Merey after the transaction was greenlighted by the White House.
This updated US recession dashboard revisits several macroeconomic and market indicators, including nonfarm payrolls, unemployment rate, credit growth, residential construction, new manufacturing orders, truck sales, 10-year-3-month term spread and corporate earnings growth. These indicators are heat-mapped using historical Z-scores and combined into a composite recession score to reflect conditions and expectations for economic contraction.
When this chart was first published on 26 January 2024, recession pressure had reached elevated levels, with the composite score peaking at more than 84% in October 2023. At that time, slowing loan growth, weakness in leading economic indices and the inverted government bond yield curve signaled significant caution, despite a resilient job market.
Since then, the picture has improved slightly. Recession pressure moderated in recent months, even plunging to 27% in November 2024. The labor market remains strong, while some leading indicators, such as new manufacturing orders, are showing tentative stabilization. However, loan growth remains soft, and the term spread remained inverted although towards uninversion, maintaining a degree of uncertainty.
While hopes of avoiding a recession have strengthened since January, risks persist. Vigilance remains essential as mixed signals across key indicators suggest caution in economic and investment decisions.
This chart tracks the US equity risk premium (ERP), a simplified measure calculated by subtracting the 10-year Treasury yield from the equity earnings yield. The chart shows how the gap between equity and bond returns has narrowed over time. Positive values indicate that stocks are delivering higher returns relative to bonds, while negative values—as seen recently—mean bonds are outperforming equities. In this updated version, the ERP dipped below zero for the first time since 2002.
When this chart was first published on 16 February 2024, the US ERP was already hovering near historic lows, with stocks offering only marginally higher returns than bonds – far below historical norms.
Since then, bond yields have continued to climb, keeping pressure on equity valuations and compressing the premium further. A brief upswing occurred during summer-to-autumn months, largely fueled by Nvidia's sharp rally and the tech sector’s strength. But this momentum was short-lived. Recent developments, including the aftermath of election results, reversed these gains and pushed the ERP into negative territory.
The updated chart underscores the shifting balance between equities and bonds, a reminder of the critical role that interest rates play in portfolio allocation decisions.
So liquidity got added:
With the added liquidity came a respite in selling stocks as buyers stepped in.
Is it new buyers long or rather short sellers buying to cover? Really difficult to tell. But without the FX and Bond markets getting supplied with that extra liquidity, today could have been pretty ugly.
That being said: the Fed (who else) cannot do more (at the moment) than add some liquidity. If real buyers do not step back in, there can still be a lot of pain to come. With the Fed signalling 'no more cuts' the USD could well resume its current move higher.
Paradoxically higher interest payments are one of the drivers of a STRONGER USD. With $7 Trillion to rollover in 2025 that trend will move higher as the debt will be higher priced.
Bond market knows.
Today the band-aid is on. For how long?
So looking at these 3 charts:
All in?
No, but some of these, foreign allocations, can reverse pretty fast (and will in a strong USD environment).
The passive flows (ETF investing from wage deductions into 401K) are massive and will just continue to continue mindlessly until they don't.
This is the push-pull: foreign DI and home based passive flows. Both are currently buyers. One could reverse pretty fast.
jog on
duc
Slower and shallower were the two key takeaways for the Federal Reserve's 2025 rate policy outlook, with a suggested prolonged pause in rate-cutting next year adding insult to the oil market’s injury. China remains a bearish factor for oil with almost all 2025 outlooks trying to outcompete one another in terms of bearishness, all this leading to a dip in Brent prices to $72 per barrel again.
Chinese More Bearish on China. China’s state refining giant Sinopec (SHA: 600028) expects the country’s oil consumption to peak by 2027 at 16 million b/d, with growth only coming from the petrochemicals sector as both gasoline and diesel are expected to fall next year, by 2.4% and 5.5%.
Oil Majors Swap Assets in Australia. US oil major Chevron (NYSE:CVX) announced it would sell its interest in the North West Shelf venture it co-operates with Australia’s Woodside (ASX:WDS) in return for the latter’s 13% stake in the $34 billion Wheatstone LNG project and an associated field.
US Arbitrage to Europe Narrows. The spread between WTI and Brent futures narrowed to $3.40 per barrel this week, the smallest reading since October 2023 as tight crude inventories in the United States strengthened the US benchmark, restricting US oil exports after record volumes to NW Europe last month.
Brazil Sweetens Upstream Offering of 2025. As Brazil prepares to hold its next upstream licensing round in the first half of 2025, its Energy Ministry announced it would add 393 new oil exploration blocks and 5 discovered fields to its permanent offer portfolio, mostly offshore blocks in the Santos basin.
Iron Ore Set to Fall Through Key Barrier. Disappointed by the lack of improvements in China’s economy and the Australian government’s highly bearish forecast that sees iron ore averaging $80 per metric tonne in 2025, the metal posted four consecutive days of declines and dropped toward $101/mt.
Oil Major Clinches Iraq Megadeal. UK oil major BP (NYSE:BP) agreed on technical terms with the government of Iraq to revive one of the largest oil fields in the country, Kirkuk, a decade after it was ravaged by the Islamic State, marking a return of BP to the field that it initially discovered in 1927.
King Coal Surprises Everyone, Again. The International Energy Agency has revamped its coal demand forecast again, expecting global consumption for coal to hit new records every year through at least 2027, increasing to nearly 8.9 billion tonnes by 2027 largely thanks to India and China.
US Graphite Producers Demand Massive Tariffs. US producers of graphite have filed petitions with two federal agencies this week, asking for investigations on potential Chinese violations of anti-dumping laws and demanding that the White House slap a punitive 920% tariff on China-produced graphite.
US EPA Approves California’s Fossil Car Ban. The US Environmental Protection Agency approved California’s landmark plan to ban gasoline-only vehicles by 2035, as the automotive industry expects President-elect Trump to rescind federal mandates on EV sales and tighter vehicle emission standards.
Cocoa Futures Soar to Record Highs. Almost tripling over the course of 2024, cocoa futures rose to an all-time high of $12,636 per metric tonne this week as the Ivory Coast’s harvest outlook once again downgraded to 1.9 million tonnes, almost 15% lower than the government’s own forecast.
UAE Woos Drillers to Form JV. ADNOC Drilling, the upstream unit of the UAE’s state oil firm ADNOC, has formed Turnwell Industries, a joint venture with oilfield service majors SLB (NYSE:SLB) and Patterson-UTI (NASDAQ
TEN), seeking to tap into the country’s 220 billion barrels of unconventional oil. Trump Threatens Europe to Buy More US Oil. US President-elect Donald Trump said that the EU could face tariffs if the regional bloc does not shrink its widening trade deficit with the United States by purchasing more US oil and gas, extending the tariff threat beyond China, Canada and Mexico.
Venezuela Resumes Swap Deals with India. India’s largest private refiner Reliance has resumed an oil swap deal with Venezuela’s PDVSA, sending a 500,000-barrel cargo of heavy naphtha in return for a VLCC laden with heavy Venezuelan Merey after the transaction was greenlighted by the White House.
This updated US recession dashboard revisits several macroeconomic and market indicators, including nonfarm payrolls, unemployment rate, credit growth, residential construction, new manufacturing orders, truck sales, 10-year-3-month term spread and corporate earnings growth. These indicators are heat-mapped using historical Z-scores and combined into a composite recession score to reflect conditions and expectations for economic contraction.
When this chart was first published on 26 January 2024, recession pressure had reached elevated levels, with the composite score peaking at more than 84% in October 2023. At that time, slowing loan growth, weakness in leading economic indices and the inverted government bond yield curve signaled significant caution, despite a resilient job market.
Since then, the picture has improved slightly. Recession pressure moderated in recent months, even plunging to 27% in November 2024. The labor market remains strong, while some leading indicators, such as new manufacturing orders, are showing tentative stabilization. However, loan growth remains soft, and the term spread remained inverted although towards uninversion, maintaining a degree of uncertainty.
While hopes of avoiding a recession have strengthened since January, risks persist. Vigilance remains essential as mixed signals across key indicators suggest caution in economic and investment decisions.
This chart tracks the US equity risk premium (ERP), a simplified measure calculated by subtracting the 10-year Treasury yield from the equity earnings yield. The chart shows how the gap between equity and bond returns has narrowed over time. Positive values indicate that stocks are delivering higher returns relative to bonds, while negative values—as seen recently—mean bonds are outperforming equities. In this updated version, the ERP dipped below zero for the first time since 2002.
When this chart was first published on 16 February 2024, the US ERP was already hovering near historic lows, with stocks offering only marginally higher returns than bonds – far below historical norms.
Since then, bond yields have continued to climb, keeping pressure on equity valuations and compressing the premium further. A brief upswing occurred during summer-to-autumn months, largely fueled by Nvidia's sharp rally and the tech sector’s strength. But this momentum was short-lived. Recent developments, including the aftermath of election results, reversed these gains and pushed the ERP into negative territory.
The updated chart underscores the shifting balance between equities and bonds, a reminder of the critical role that interest rates play in portfolio allocation decisions.
So liquidity got added:
With the added liquidity came a respite in selling stocks as buyers stepped in.
Is it new buyers long or rather short sellers buying to cover? Really difficult to tell. But without the FX and Bond markets getting supplied with that extra liquidity, today could have been pretty ugly.
That being said: the Fed (who else) cannot do more (at the moment) than add some liquidity. If real buyers do not step back in, there can still be a lot of pain to come. With the Fed signalling 'no more cuts' the USD could well resume its current move higher.
Paradoxically higher interest payments are one of the drivers of a STRONGER USD. With $7 Trillion to rollover in 2025 that trend will move higher as the debt will be higher priced.
Bond market knows.
Today the band-aid is on. For how long?
So looking at these 3 charts:
All in?
No, but some of these, foreign allocations, can reverse pretty fast (and will in a strong USD environment).
The passive flows (ETF investing from wage deductions into 401K) are massive and will just continue to continue mindlessly until they don't.
This is the push-pull: foreign DI and home based passive flows. Both are currently buyers. One could reverse pretty fast.
jog on
duc
Sean K
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920% tariff? Yikes. What's the second, third order effects of this? Is it going to change the price of graphite world wide, or just encourage US and other western companies to hop to it with graphite mine delivery.
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Corrected after glitch
Or not use graphite but alternatives, when there is a will,there is a mean?
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Thank you @ducati916 for your DDD contributions throughout the year. I enjoy reading them even if I don't understand the underlying macro-economics of most of them. The maths behind the MSTR accumulation of BTC went over my head by 10,000 ft. MSTR was easy to trade earlier in the year but it's now becoming too volatile. I agree that there's going to be a disastrous implosion with this. Don't know how and don't know when.
I keep an eye on the oil, gold and USD news as they pertain to my positions. Thanks for those.
I do miss my daily dose of Fly. Amongst all the emotional outbursts there was wit and humour along with a stock tip or two. He frequently brought stocks to my attention that I'd not seen.
I'll be doing a lot more trading in the US market next year. I don't expect the US to have another year of rising prices like this year but there's just so many more trading opportunities than in the ASX.
Reports from NZ say that you're doing it tough with the high costs of living. Much worse than Aust and so bad, that many are crossing the ditch. I trust that a person of your talent should be OK and enjoy a festive holiday period.
I keep an eye on the oil, gold and USD news as they pertain to my positions. Thanks for those.
I do miss my daily dose of Fly. Amongst all the emotional outbursts there was wit and humour along with a stock tip or two. He frequently brought stocks to my attention that I'd not seen.
I'll be doing a lot more trading in the US market next year. I don't expect the US to have another year of rising prices like this year but there's just so many more trading opportunities than in the ASX.
Reports from NZ say that you're doing it tough with the high costs of living. Much worse than Aust and so bad, that many are crossing the ditch. I trust that a person of your talent should be OK and enjoy a festive holiday period.
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Peter,
Thanks for the acknowledgement, always nice to feel the love.
Yes it's a shame Mr fff decided to go private. As he lives in America (Sth Carolina) his observations were often insightful, never mind the irreverence, humour and as you say, off the beaten track stock ideas.
Apart from the time difference, why would anyone not trade the US? So many more varied strategies and instruments are available.
It would be nice to actually have a 2-way market. That however will be resisted by the powers-that-be for tax revenue purposes.
I'm in a pretty recession proof industry. Although with the increasing roll-out of AI, even my industry may feel the pinch down the road a little.
For next week:
The week that has just been:
So obviously not a 'month' but with two short weeks, December has so far been a disappointment for the bulls.
Valuations at the 'top' of markets are not a great timing tool. But what they do tell you is that markets do not shrug off bad news. So with the Fed losing control of inflation again...and it will get worse, kiss your rate cuts (for the moment) goodbye, that rollover of $7 Trillion in debt will REALLY pressure deficits.
The Bond market is telling you already that it is choking on paper. There is NO WAY without a major buyer (the Fed) that the credit markets can absorb and digest $7 Trillion. If the Fed is the buyer (and they will be) inflation is off to the races.
A falling stock market = falling tax revenues = increased deficits = Fed buying even more paper.
Long story short: this market is a bomb just waiting to explode. Unlike 2020, you can't buy this dip.
jog on
duc
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sadly i think you are correct
maybe the odd cherry-pick , but i strongly suspect winners will be picked ( serial money-pits saved , companies like Boeing )
but will it happen before Trump can get sworn in ?
or will something like a MAJOR war supply the distraction/breathing-space needed to paper over this mess
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Mr Saylor pumping btc.
With MSTR being added to QQQ
So foreign FDI = $16 Trillion
Foreign FDI (largely) flows into QQQ
And US inverted NIIP.
So MSTR stock will become added to the foreign FDI, internal passive flows and any added weighting that Fund managers add to MSTR.
Mr Saylor (and his copycats) will continue to sell equity and convertible bonds and buy btc.
But:
We have seen that btc will follow QQQ on upside and downside already. This trend will be magnified by MSTR inclusion into QQQ. If the trend reverses, the leverage now acts in a very negative manner and will force liquidations of btc. Mr Saylor and MSTR have been buying btc at these $90,000 levels with increasing levels of debt and equity.
jog on
duc
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The effect of passive flows:
So essentially chart 1 maps information flow linked to valuations.
Chart 2 states: markets operate on 'efficient market' theory, prices are going up, keep buying.
You would have thought that EMT had died a death decades ago. Clearly not. The result is that the markets are moving higher in ever narrower confines (US markets are outperforming all other global markets) and becoming more and more overvalued because value is not even a thing.
This ties in perfectly with the US NIIP position of FDI.
If (when) this goes into reverse, watch out. That is $16 Trillion in FDI in stocks that can reverse. So when pundits talk about 50%, 70% and 80% retracements, this is how it happens.
What is the catalyst? The trigger?
A too strong USD.
jog on
duc
So essentially chart 1 maps information flow linked to valuations.
Chart 2 states: markets operate on 'efficient market' theory, prices are going up, keep buying.
You would have thought that EMT had died a death decades ago. Clearly not. The result is that the markets are moving higher in ever narrower confines (US markets are outperforming all other global markets) and becoming more and more overvalued because value is not even a thing.
This ties in perfectly with the US NIIP position of FDI.
If (when) this goes into reverse, watch out. That is $16 Trillion in FDI in stocks that can reverse. So when pundits talk about 50%, 70% and 80% retracements, this is how it happens.
What is the catalyst? The trigger?
A too strong USD.
jog on
duc
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Full:https://www.mrt.com/business/oil/article/chevron-2025-capital-spending-cuts-19964843.php
Then:https://www.bloomberg.com/news/arti...rce=twitter&cmpid=socialflow-twitter-business
More:https://www.wsj.com/business/energy-oil/trump-scott-bessent-oil-production-e004de84
Shale being critical to the US cannot be allowed (again) to cut production. Already there are issues.
Yellen shifted to issue of T-Bills because there was NO DEMAND at the long end.
Which is PIMCO: https://finance.yahoo.com/news/us-debt-reckoning-escalates-sharply-190954031.html?guccounter=1
This 'strategy' was always going to be inflationary. Why? Simple, the shorter the duration the more 'moneylike' the debt instrument becomes. Now we are seeing that increase in secular inflation as Powell says less rate cuts in 2025 because inflation is picking up.
The thing is: the US NEEDS inflation and lots of it. Inflation is a default in slow motion. The liabilities are such that they can (now) never be paid. Default is the only option. Fast or slow is the choice. Fast = DEPRESSION. Slow = RECESSION.
Eventually (always) they will pick inflation.
Which is why us little chaps need to protect ourselves.
Stocks are simply to risky at these levels. FDI is so high that as foreign sellers cash out, the resulting fall will destroy confidence leading to a cascade of selling. Second, we have the issue of passive flows into stocks, reversing into passive flows out of stocks, which foreign selling could trigger.
BTC is so speculative and now leveraged via MSTR and copycats, that BTC will sell off so hard as to be useless.
Which leaves GOLD. The East supports the POG as it is now their de facto Reserve Asset.
I'm also reading more and more about the 'Bond Vigilantes'. As if they are some form of discipline to be imposed.
In 1941 FDR did not ask the Bond Vigilantes if he could take the US into a two theatre war. He just said we are at war with Germany and Japan, deal with it. Rates were capped. End of story. F*ck the Fed. Do as you are told.
Same will happen. We will have YCC to provide real negative returns until the debt is manageable. That could be 10yrs+ Which means high inflation in UST. Avoid like the plague.
jog on
duc
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BTC:
jog on
duc
jog on
duc
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IMO as BS as Fly-Buys points but both exist anyway ( and some people love them )
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Taleb's Turkey
jog on
duc
jog on
duc
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They Lost me when they Could not work out how many Lifetimes were under discussion
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Full:https://www.wsj.com/finance/stocks/...c?st=F9FKHm&reflink=desktopwebshare_permalink
Full:https://www.theatlantic.com/ideas/a...opy-link&utm_medium=social&utm_campaign=share
Full:https://jpkoning.blogspot.com/2024/12/after-twelve-years-of-writing-about.html
Full:https://scheplick.com/2024/12/19/bitcoins-largest-holders-banks-vs-people/
USD up, everything else down.
Broad market weak. Just being held up by the mega-mega caps.
The Fed cannot fight inflation with $7 Trillion in debt to rollover and running $2 Trillion+ in annual deficits. Inflation and lots of it is what must (and eventually will) happen because the alternative is the government and system collapses.
The USD needs to go to +/- from 107 to 82'ish. Maybe even into the 70's.
If Powell persists, then we will start to test the theories of Mr Green re. reverse flows. If unemployment and a recession ratchet higher then we get reverse flows and increased deficits.
So Mr Putin is far better informed than almost anybody you might care to name. Trump compared to Putin is a cretin. Sad but true.
Why exactly is Putin promoting btc? Particularly around the time that Trump is advocating its use (btc) as a US Reserve Asset? Odd is it not?
Food for thought.
jog on
duc
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who can stop BTC ( and other cryptos ) ?
while electronic communications systems stay on line ? there would be a way , say using a spam filter at telecommunications hub level , probably not 100% successful of stopping circulation via the web .. but might be incredibly damaging
bringing down electronic communication networks ( say for a month ) nasty and inconvenient but possible
now maybe BTC transfers can't be stopped via cold wallet transfer between owners in close physical proximity ( whether deemed illegal or not )
but a determined actor(s ) certainly could make it inconvenient for most BTC ( and other cryptos ) transfers across the net/globe
the real question should be is who wants to stop BTC ( and other cryptos ) , for instance mega-instos like Blackrock can destroy it by creating derivatives , and obscure custody chains and synthetic cryptos , just like they do with the oil,gold, silver commodities trading markets
while electronic communications systems stay on line ? there would be a way , say using a spam filter at telecommunications hub level , probably not 100% successful of stopping circulation via the web .. but might be incredibly damaging
bringing down electronic communication networks ( say for a month ) nasty and inconvenient but possible
now maybe BTC transfers can't be stopped via cold wallet transfer between owners in close physical proximity ( whether deemed illegal or not )
but a determined actor(s ) certainly could make it inconvenient for most BTC ( and other cryptos ) transfers across the net/globe
the real question should be is who wants to stop BTC ( and other cryptos ) , for instance mega-instos like Blackrock can destroy it by creating derivatives , and obscure custody chains and synthetic cryptos , just like they do with the oil,gold, silver commodities trading markets
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Oil News:
US natural gas producers are anticipating a reversal of fortunes next year after 2024 saw gas-focused drillers struggle with oversupply and multi-year price lows, dipping as low as $1.60 per mmBtu during the year.
- Over the next 12 months, US natural gas production in the Lower 48 states is expected to add around 4 BCf/day and surpass 107 BCf/day by next December, buoyed by Henry Hub finally trending $3.7 per MMbtu.
- Gas drillers are now assessing the impact of winter weather on demand to convert uncompleted wells to wells in production, with next year’s anticipated LNG feedgas ramp-up boosted by the recent launch of Venture Global’s Plaquemines LNG facility.
- Total US feedgas demand is set to rise from 13.2 BCf/day in 2024 to more than 19 BCf/day in 2026, following the commissioning of ExxonMobil’s Golden Pass LNG plant, pushed to late 2025 after a string of postponements.
Market Movers
- Norway’s state oil company Equinor (NYSE:EQNR) reported disappointing drilling results, as both the Mimung and Kvernbit wildcats failed to discover any commercial quantities of hydrocarbon.
- Canada’s upstream firm Vermillion Energy (TSE:VET) agreed to acquire privately held Westbrick Energy for $750 million, consolidating its acreage in the Deep Basin of Alberta and adding 50,000 boe/d of production.
- US offshore producer Talos Energy (NYSE:TALO) said it would terminate its so-called poison pill after it reached an agreement with billionaire Carlos Slim not to exceed the ownership threshold of 25% in the firm.
Tuesday, December 24, 2024
Pre-Christmas trading tends to be very low on liquidity and this week will be no exception, with prices barely moving around the $73 per barrel mark. That said, if there were enough trades, they would most probably push prices higher as China’s monster $410 billion treasury bond sale seems to be the long-awaited stimulus measure oil markets would appreciate. However, the impact might only be felt in the new year.
Trump Reignites Panama Canal Dispute. US President-elect Donald Trump has threatened to reclaim the Panama Canal for the United States to put an end to a ‘complete rip-off’, claiming that the high transit costs are unjustified given that the US accounts for over 70% of all transits.
Qatar Threatens EU Halt if Policies Not Stopped. Qatar vowed to stop shipping liquefied natural gas to the European Union if member states would enforce new regulations on forced labor and environmental damage, providing 13-14% of the continent’s LNG needs in recent years.
OECD Fossil Ban Deal Falls Through. Negotiations to limit export-credit energy finance for global fossil fuel projects organized under the umbrella of the OECD have collapsed without agreement, just weeks before US President-elect Donald Trump takes office.
Venture Global Files for NYSE IPO. Venture Global, one of the leading LNG developers in the US, filed for an initial public offering next year listing its shares under the symbol ‘VG’, seeking to raise some 3 billion from its IPO, mostly to fund operations as it expands its two plants in Louisiana.
Greece and Israel Form Mediterranean Partnership. The governments of Greece and Israel have signed an agreement to promote regional stability and energy projects, including the creation of a ‘green’ electricity corridor from Israel to EU countries in the Eastern Mediterranean.
Iraq Suspends Oil Deliveries to Syria. Iraq has stopped supplying crude oil to Syria, amounting to more than half of the country’s needs with some 120,000 b/d flowing daily up until now, with Damascus’ new rulers struggling to find new sources of oil after the Kurds halted supply, too.
Chile Launches Probe Against Mining Giant. Chile’s environmental regulator SMA has filed four separate charges against the Los Bronces copper mine operated by mining giant Anglo American (LON:AAL), alleging non-compliance with environmental permits including acid drainage.
Brazil Halts BYD Expansion on Slavery Allegations. Brazilian authorities halted the construction of a new EV plant in the country operated by China’s top electric car producer BYD (SHE: 002594) after workers were found to live in slavery-like conditions, rescuing 163 Chinese workers.
Europe Gets Exemptions from Gazprom Sanctions. Turkey and Hungary, two of the main buyers of Russian pipeline gas in Europe, were granted exemptions from recently introduced US sanctions on Gazprombank, the sister company of Russia’s pipeline gas monopoly Gazprom.
Spain Extends Windfall Tax by Government Decree. Less than a week after the Spanish parliament voted to eliminate the country’s windfall tax on energy companies, Spain’s government extended the levy into 2025 by direct government decree despite widespread concerns about falling investment.
India Pauses Commodity Futures Trading. India extended the suspension of trading in derivative contracts of key agriculture commodities until January 31, 2025, continuing a measure that was first introduced in 2021 to curb food inflation in wheat and rice, making it difficult for importers to hedge their risks.
US Oil Firms Crack Down on Methane. According to S&P Global, methane emissions in the Permian basin plunged 26% this year as drillers tightened emission controls to stop leaks of the potent greenhouse gas, emitting 34 bcf less than last year on the back of stricter Biden-era mandates.
El Salvador Reverses Mining Ban. The Central American nation of El Salvador overturned a seven-year ban on mining for metals as the bill proposed by President Nayib Bukele passed Congress on a 57-3 vote, eyeing gold reserves worth 3 trillion alongside untapped rare earth deposits.
Half day in US markets.
Strong pretty much across the board.
And has been an ongoing issue. The data is very manipulated.
This is the result of 'passive flows'. Not an issue until it goes into reverse.
Again, passive flows.
Merry Xmas,
jog on
duc
US natural gas producers are anticipating a reversal of fortunes next year after 2024 saw gas-focused drillers struggle with oversupply and multi-year price lows, dipping as low as $1.60 per mmBtu during the year.
- Over the next 12 months, US natural gas production in the Lower 48 states is expected to add around 4 BCf/day and surpass 107 BCf/day by next December, buoyed by Henry Hub finally trending $3.7 per MMbtu.
- Gas drillers are now assessing the impact of winter weather on demand to convert uncompleted wells to wells in production, with next year’s anticipated LNG feedgas ramp-up boosted by the recent launch of Venture Global’s Plaquemines LNG facility.
- Total US feedgas demand is set to rise from 13.2 BCf/day in 2024 to more than 19 BCf/day in 2026, following the commissioning of ExxonMobil’s Golden Pass LNG plant, pushed to late 2025 after a string of postponements.
Market Movers
- Norway’s state oil company Equinor (NYSE:EQNR) reported disappointing drilling results, as both the Mimung and Kvernbit wildcats failed to discover any commercial quantities of hydrocarbon.
- Canada’s upstream firm Vermillion Energy (TSE:VET) agreed to acquire privately held Westbrick Energy for $750 million, consolidating its acreage in the Deep Basin of Alberta and adding 50,000 boe/d of production.
- US offshore producer Talos Energy (NYSE:TALO) said it would terminate its so-called poison pill after it reached an agreement with billionaire Carlos Slim not to exceed the ownership threshold of 25% in the firm.
Tuesday, December 24, 2024
Pre-Christmas trading tends to be very low on liquidity and this week will be no exception, with prices barely moving around the $73 per barrel mark. That said, if there were enough trades, they would most probably push prices higher as China’s monster $410 billion treasury bond sale seems to be the long-awaited stimulus measure oil markets would appreciate. However, the impact might only be felt in the new year.
Trump Reignites Panama Canal Dispute. US President-elect Donald Trump has threatened to reclaim the Panama Canal for the United States to put an end to a ‘complete rip-off’, claiming that the high transit costs are unjustified given that the US accounts for over 70% of all transits.
Qatar Threatens EU Halt if Policies Not Stopped. Qatar vowed to stop shipping liquefied natural gas to the European Union if member states would enforce new regulations on forced labor and environmental damage, providing 13-14% of the continent’s LNG needs in recent years.
OECD Fossil Ban Deal Falls Through. Negotiations to limit export-credit energy finance for global fossil fuel projects organized under the umbrella of the OECD have collapsed without agreement, just weeks before US President-elect Donald Trump takes office.
Venture Global Files for NYSE IPO. Venture Global, one of the leading LNG developers in the US, filed for an initial public offering next year listing its shares under the symbol ‘VG’, seeking to raise some 3 billion from its IPO, mostly to fund operations as it expands its two plants in Louisiana.
Greece and Israel Form Mediterranean Partnership. The governments of Greece and Israel have signed an agreement to promote regional stability and energy projects, including the creation of a ‘green’ electricity corridor from Israel to EU countries in the Eastern Mediterranean.
Iraq Suspends Oil Deliveries to Syria. Iraq has stopped supplying crude oil to Syria, amounting to more than half of the country’s needs with some 120,000 b/d flowing daily up until now, with Damascus’ new rulers struggling to find new sources of oil after the Kurds halted supply, too.
Chile Launches Probe Against Mining Giant. Chile’s environmental regulator SMA has filed four separate charges against the Los Bronces copper mine operated by mining giant Anglo American (LON:AAL), alleging non-compliance with environmental permits including acid drainage.
Brazil Halts BYD Expansion on Slavery Allegations. Brazilian authorities halted the construction of a new EV plant in the country operated by China’s top electric car producer BYD (SHE: 002594) after workers were found to live in slavery-like conditions, rescuing 163 Chinese workers.
Europe Gets Exemptions from Gazprom Sanctions. Turkey and Hungary, two of the main buyers of Russian pipeline gas in Europe, were granted exemptions from recently introduced US sanctions on Gazprombank, the sister company of Russia’s pipeline gas monopoly Gazprom.
Spain Extends Windfall Tax by Government Decree. Less than a week after the Spanish parliament voted to eliminate the country’s windfall tax on energy companies, Spain’s government extended the levy into 2025 by direct government decree despite widespread concerns about falling investment.
India Pauses Commodity Futures Trading. India extended the suspension of trading in derivative contracts of key agriculture commodities until January 31, 2025, continuing a measure that was first introduced in 2021 to curb food inflation in wheat and rice, making it difficult for importers to hedge their risks.
US Oil Firms Crack Down on Methane. According to S&P Global, methane emissions in the Permian basin plunged 26% this year as drillers tightened emission controls to stop leaks of the potent greenhouse gas, emitting 34 bcf less than last year on the back of stricter Biden-era mandates.
El Salvador Reverses Mining Ban. The Central American nation of El Salvador overturned a seven-year ban on mining for metals as the bill proposed by President Nayib Bukele passed Congress on a 57-3 vote, eyeing gold reserves worth 3 trillion alongside untapped rare earth deposits.
Half day in US markets.
Strong pretty much across the board.
And has been an ongoing issue. The data is very manipulated.
This is the result of 'passive flows'. Not an issue until it goes into reverse.
Again, passive flows.
Merry Xmas,
jog on
duc
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- 8 June 2008
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The real Santa rally and under the tree gift for many:
Better Than Chrismas
Merry Christmas
Better Than Chrismas
Merry Christmas
- Joined
- 13 February 2006
- Posts
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Full:https://www.wsj.com/tech/cybersecur...9?st=PN9EqJ&reflink=desktopwebshare_permalink
Full:https://www.rollingstone.com/cultur...uah-meme-coin-haliey-welch-crypto-1235213606/
Full:https://www.ft.com/content/fb2c9511-0663-43bc-ae4d-a3a4da743111?shareType=nongift
Full:https://www.coindesk.com/policy/202...-usd305m-hack-on-japanese-crypto-exchange-dmm
Full:https://mileskellerman.substack.com/p/247-trading-and-the-politics-of-time
- With breadth rebounding over the past two days, the clock has started on a potential Zweig Breadth Thrust. This bullish signal occurs when breadth quickly recovers from oversold conditions.
- Created by Marty Zweig, this indicator is calculated using a 10-Day EMA of the number of advancing stocks on the NYSE, divided by the total number of stocks on the NYSE. A buy signal occurs when the indicator moves from below 0.40 to above 0.61 within 10 trading days or less.
- While this signal is rare, returns have historically been very bullish. According to data from the Leuthold Group, the S&P 500 has always been higher six months later, with an average gain of +16.2%.
Santa Claus:
My oh my, this week escalated quickly to quote the great philosopher Ron Burgundy (Anchorman). The S&P 500 sold off nearly 3% on Wednesday and we saw 97% of all stocks in the S&P 1500 fall as well. That is what we call a selling cascade and it has left many bulls bruised and battered. Be sure to read what Sonu Varghese, VP Global Macro Strategist, had to say about the Fed cut and market reaction in The Fed Pulls a Grinch.
Yes, worries spiked this week over fears about sticky inflation (which we don’t see) and fewer rate cuts next year (which wasn’t really surprise to us – just two weeks ago Sonu wrote about expecting just 2-3 cuts in 2025). But let’s take a step back and put things in context. The S&P 500 is only 3.6% away from the recent highs and it still up 23% for the year, something that most investors would have gladly taken this time a year ago.
Then what else did the Fed say on Wednesday? They upped their views of economic growth and said things looked pretty good on the economic front. That isn’t the worst news. In fact, third quarter GDP came in at a very strong 3.1% and it has now gained more than 3% four of the past five quarters. Additionally, initial jobless claims fell 22,000 to 220,000 and are at the low end of the range the second half of this year. Lastly, forward-looking profit margins and earnings for the S&P 500 are both at all-time highs, suggesting the backdrop for this bull market remains quite strong and healthy.
Let’s Talk About 
One of the little-known facts about the Santa Claus Rally (SCR) is that it isn’t the entire month of December; it’s actually only seven trading days. Discovered in 1972 by Yale Hirsch, creator of the Stock Trader’s Almanac (carried on now by his son Jeff Hirsch), the real SCR is the final five trading days of the year and first two trading days of the following year. In other words, the official SCR is set to begin next week on Tuesday, December 24, 2024.Historically, it turns out these seven days indeed have been quite jolly, as no seven-day combo is more likely to be higher (up 78.4% of the time), and only two combos have a better average return for the S&P 500 than the 1.29% average return during the official Santa Claus Rally period.
Here’s a chart we shared last week, showing that the latter half of December is when most of the seasonally strong gains occur.
These seven days tend to be in the green, so that is expected. Take note, Santa didn’t come last year and clearly stocks did just fine in 2024, but be aware these seven days had been higher the previous seven years before 2023. Here are all the returns since the tech bubble imploded 25 years ago.
The bottom line that really matters to investors is when Santa doesn’t come, as Mr. Hirsch noted in the quote at the start of this blog.
jog on
duc
