July 2024 DDD

[ducati916]

In preparation for the start of July



pg. 2

 

[ducati916]

Above is SPY returns for June. Followed by sector ETF's.

Credit Spreads:



Credit spreads are an early warning data point. Watching.

As always, the USD



The weak Yen is a symptom of exactly this.



There will be intervention to strengthen the Yen and weaken the USD. If there isn't, we'll see exactly that as UST is sold to sell USD buy Yen. The result is that yields on UST will rise. That is a major issue as liquidity is already an issue.

The US NIIP position makes the US incredibly weak, particularly while trying to fight Cold War II with China. China (not without it's own issues) will be able to outlast the US. The UST market will blow-up long before China does. Necessitating another Fed. injection of liquidity and inflation.

The consensus is for a bullish July. June was never a topping month. What if? Where is the pain trade? From previous page, Hedge Funds are selling. Ok, Hedge Funds often get it wrong, but they are still big players, as opposed to Roaring Kitty and his cohorts. I would not be surprised to see a bad July.

jog on
duc

 

[ducati916]

Worth watching:



jog on
duc

 

[ducati916]

So a funny week next week. Lots of data, half day Wednesday, holiday Thursday normal Friday.

XLB Short $88.50- $87
XLC Long $86-$87.50
XLE Short $91.50-$89
XLRE Sideways $35/$38/$41
XLF Short $41.50-$40.50
XLK Short $226.50-$219
XLI Short $123.50-$119
XLP Short $78-$76
XLY Long $182.50-$184
XLU Short $68.50-$67.50
XLV Long $145.50-$147.50

jog on
duc

 

[ducati916]

Full: https://www.bloomberg.com/news/arti...24-hour-stock-trading-push-spooks-wall-street



Unemployment picking up.



RE is a problem area worldwide.



More liquidity issues:





Back to the bifurcated market.




ETFs.

Bottom right quadrant are the sector ETFs.






Big move in bonds. Why?

I thought maybe BoJ had stepped into the market again:



Not yet. Which means if it's not currently BoJ...then who?

MOVE index fine for the moment (run out of chart space). USD is strong. Why? Well this headline: https://www.bloomberg.com/news/arti...court-ruling-signals-currency-has-room-to-run

LOL.

But a strong USD has bad implications for everyone else.

jog on
duc

 

[ducati916]

Reactions to today's trading:



Credit spreads seem to have bottomed out. If they have, that is an early warning for the equity markets.

Watching.

UST market vol. made a jump higher:



Not a good sign. Liquidity issues.

Definitely watching.



Confirmed by demand for USD. Definitely entering the trouble for everything zone, except gold.

So in summary: lots of disquiet in the markets. Does it create a sell-off? Depends how quickly the Fed comes in to supply additional liquidity. If they are slow or don't come until it's too late, we will have a hard sell-off.

The problem is that in the after-market summaries that I follow/monitor, there is no real mention of the UST market/liquidity/USD. Most/many/all are still expecting a good seasonal market.

The fundamentals of this market are really bad.

Investor sentiment remains bullish. That can change very quickly.

jog on
duc

 

[ducati916]

Oil News:

As commodity markets started to talk politics following last week’s Biden-Trump debate, analysts seek to gauge the impact of US gasoline prices on voter satisfaction.

- Nationwide gasoline prices are 3-4% lower year-on-year, with US gasoline consumption trending lower this year, gasoline cracks being a hefty $10 per barrel lower than in 2023 and inventories some 12 million barrels higher.

- However, swing states such as Arizona, Georgia or Nevada saw lower gasoline consumption than the US average, at 551 gallons per year compared to the federal average of 576 gallons, whilst also tending to pay more since Biden took office ($1.12/USG vs $1.06/USG nationally).

- Given that Trump-voting states tend to be more exposed to pump price volatility, due to them being more rural or having a lower average disposable income, even lower gasoline prices might be a problem for President Biden.

Market Movers

- Oilfield services giant SLB (NYSE:SLB) is winding down operations in Libya from July 1 as more than a dozen oil companies owe it some $240 million in unpaid dues.

- Spanish oil major Repsol (BME:REP) is considering selling up to a 49% interest in its assets in the Eagle Ford play in Texas, currently producing over 50,000 boe/d, hoping to garner at least $1 billion from the sale.

- Italy’s energy giant ENI (BIT:ENI) is planning to divest more than $4 billion in upstream assets, with projects in Indonesia and Cyprus amongst the most likely candidates following its recent asset sale in Alaska.

Tuesday, July 02, 2024

Oil traders have all become professional meteorologists in July, with the market following the rapid start to this year’s Atlantic hurricane season. Hurricane Beryl is threatening Jamaica as it moves towards the US-Mexican coast, the earliest category 5 hurricane to form at this time of the year. Meanwhile, Israel-Lebanon tensions keep the geopolitical risk premium priced in as well, lifting ICE Brent to $87 per barrel.

Saudi Arabia Bets on Natural Gas. Saudi Arabia’s national oil firm Saudi Aramco (TADAWUL:2222) has signed contracts worth more than $25 billion for the 2nd phase of its giant 229 TCf Jafurah gas field and the 3rd phase of expanding its main gas grid, seeking to use more gas in power generation.

US Walks Back SPR Replenishment Vow. The Biden administration has not awarded any contracts in its recent solicitation to buy an additional 6 million barrels of sour crude to the US SPR by the end of 2024, with seemingly no bids coming in below the cut-off level of $79.99 per barrel.

Russia Extends Gasoline Export Ban Waiver. The Russian government has waived its ban on gasoline exports for another month until July 31, saying that fuel stockpiles are sufficient despite repeated Ukrainian drone strikes on refineries, bringing some 150,000 b/d of the fuel to the markets.

China Creates New Driller for Tight Oil. Beijing is setting up a new state-controlled entity that would group current producers, combining CNPC, Sinopec, and also steel and industrial equipment firms, to search for ultra-deep productive reservoirs and tackle tight oil deposits.

Biden’s LNG Pause Challenged in Court. A federal judge in Lake Charles, Louisiana ruled that the Biden administration’s pausing of approval for LNG terminals contravened the US Natural Gas Act and was thus unconstitutional, with the Energy Department evaluating its next steps.

Total Clinches Major Deal in Africa. French energy major TotalEnergies (NYSE:TTE) has signed an agreement to acquire a 60% interest in Block STP02 of Sao Tome and Principe, bolstering its offshore position in West Africa even as investment into neighboring Nigeria is stalling.

Beijing Stops Publishing Solar Data. Attesting to the dire situation in China’s solar sector, straining from overcapacity, Chinese authorities have stopped publishing data that show the extent to which power from solar and wind plants is being wasted amidst constrained grids.

US Air Travel Still Has Room to Grow. According to TSA statistics, US passenger air travel rose to 19.75 million passengers in the week ending 29 June, marking the highest-ever weekly reading and the second time this year already that an all-time high is set.

Hedge Funds Hoard Cobalt as Prices Plunge. Hedge funds such as Anchorage Capital and Squarepoint Capital have been building physical positions in cobalt by buying up material, eyeing the wide contango, and the ensuing opportunity for “cash-and-carry” trades into 2025.

Rio Tinto Seeks to Avoid Mongolian Collapse. Global mining giant Rio Tinto (ASX:RIO) is in negotiations with workers at its Oyu Tolgoi mine in Mongolia, one of the largest copper deposits worldwide, after the company cut wages there by as much as 80%.

South Africa Braces for Major Exodus. France’s oil giant TotalEnergies (NYSE:TTE) is considering relinquishing its acreage in offshore South Africa, having discovered 4.5 TCf of gas assets with the Luiperd and Brulpadda discoveries, however hindered by government red-tape and regulations.

AngloAmerican Is Having a Tumultuous 2024. Shares of mining major AngloAmerican (LON:AAL) dropped almost 6% this week after a methane explosion caused a fire at the Grosvenor metallurgical coal mine, accounting for about 30% of the company’s annual coking output.

Chinese Manufacturing Paints a Bleak Outlook. China’s factory activity contracted for a second straight month in June, with the PMI index coming in unchanged at 49.5, with trade tensions vis-à-vis the United States and Europe weighing on new export orders.



Full: https://alhambrapartners.com/weekly-market-pulse-the-sp-500-rules-everything-around-me/?src=news



pg. 2

 

[ducati916]

Repo market under stress? Not a good sign. Further evidence of liquidity issues.

Across the classes:



S&P500



Mixed bag.



The market is meh. Choppy, directionless tending to flippe-floppe. The expected seasonality of moving higher does not seem to be playing out. The economic data is meh. Powell's comments, meh.

With a half day tomorrow and a holiday on Thursday, probably nothing much tomorrow unless there is unexpected news. Unexpected news in this market will be taken as a negative and will not be shrugged off. Good news may not move the market that much. The risk is to the downside currently.

The pain trade is also likely lower. The momo seems to have slowed currently.

There is clearly trouble in the UST market.



Yields (not up much on yesterday) are rising...in the face of Powell's claimed disinflationary track.

Obviously the Yen is an issue. Whether the BoJ after the last disaster tries to prop it up...who knows. That is the sort of thing that happens when markets are closed.

jog on
duc

 

[qldfrog]

Oil News:

As commodity markets started to talk politics following last week’s Biden-Trump debate, analysts seek to gauge the impact of US gasoline prices on voter satisfaction.

- Nationwide gasoline prices are 3-4% lower year-on-year, with US gasoline consumption trending lower this year, gasoline cracks being a hefty $10 per barrel lower than in 2023 and inventories some 12 million barrels higher.

- However, swing states such as Arizona, Georgia or Nevada saw lower gasoline consumption than the US average, at 551 gallons per year compared to the federal average of 576 gallons, whilst also tending to pay more since Biden took office ($1.12/USG vs $1.06/USG nationally).

- Given that Trump-voting states tend to be more exposed to pump price volatility, due to them being more rural or having a lower average disposable income, even lower gasoline prices might be a problem for President Biden.

Market Movers

- Oilfield services giant SLB (NYSE:SLB) is winding down operations in Libya from July 1 as more than a dozen oil companies owe it some $240 million in unpaid dues.

- Spanish oil major Repsol (BME:REP) is considering selling up to a 49% interest in its assets in the Eagle Ford play in Texas, currently producing over 50,000 boe/d, hoping to garner at least $1 billion from the sale.

- Italy’s energy giant ENI (BIT:ENI) is planning to divest more than $4 billion in upstream assets, with projects in Indonesia and Cyprus amongst the most likely candidates following its recent asset sale in Alaska.

Tuesday, July 02, 2024

Oil traders have all become professional meteorologists in July, with the market following the rapid start to this year’s Atlantic hurricane season. Hurricane Beryl is threatening Jamaica as it moves towards the US-Mexican coast, the earliest category 5 hurricane to form at this time of the year. Meanwhile, Israel-Lebanon tensions keep the geopolitical risk premium priced in as well, lifting ICE Brent to $87 per barrel.

Saudi Arabia Bets on Natural Gas. Saudi Arabia’s national oil firm Saudi Aramco (TADAWUL:2222) has signed contracts worth more than $25 billion for the 2nd phase of its giant 229 TCf Jafurah gas field and the 3rd phase of expanding its main gas grid, seeking to use more gas in power generation.

US Walks Back SPR Replenishment Vow. The Biden administration has not awarded any contracts in its recent solicitation to buy an additional 6 million barrels of sour crude to the US SPR by the end of 2024, with seemingly no bids coming in below the cut-off level of $79.99 per barrel.

Russia Extends Gasoline Export Ban Waiver. The Russian government has waived its ban on gasoline exports for another month until July 31, saying that fuel stockpiles are sufficient despite repeated Ukrainian drone strikes on refineries, bringing some 150,000 b/d of the fuel to the markets.

China Creates New Driller for Tight Oil. Beijing is setting up a new state-controlled entity that would group current producers, combining CNPC, Sinopec, and also steel and industrial equipment firms, to search for ultra-deep productive reservoirs and tackle tight oil deposits.

Biden’s LNG Pause Challenged in Court. A federal judge in Lake Charles, Louisiana ruled that the Biden administration’s pausing of approval for LNG terminals contravened the US Natural Gas Act and was thus unconstitutional, with the Energy Department evaluating its next steps.

Total Clinches Major Deal in Africa. French energy major TotalEnergies (NYSE:TTE) has signed an agreement to acquire a 60% interest in Block STP02 of Sao Tome and Principe, bolstering its offshore position in West Africa even as investment into neighboring Nigeria is stalling.

Beijing Stops Publishing Solar Data. Attesting to the dire situation in China’s solar sector, straining from overcapacity, Chinese authorities have stopped publishing data that show the extent to which power from solar and wind plants is being wasted amidst constrained grids.

US Air Travel Still Has Room to Grow. According to TSA statistics, US passenger air travel rose to 19.75 million passengers in the week ending 29 June, marking the highest-ever weekly reading and the second time this year already that an all-time high is set.

Hedge Funds Hoard Cobalt as Prices Plunge. Hedge funds such as Anchorage Capital and Squarepoint Capital have been building physical positions in cobalt by buying up material, eyeing the wide contango, and the ensuing opportunity for “cash-and-carry” trades into 2025.

Rio Tinto Seeks to Avoid Mongolian Collapse. Global mining giant Rio Tinto (ASX:RIO) is in negotiations with workers at its Oyu Tolgoi mine in Mongolia, one of the largest copper deposits worldwide, after the company cut wages there by as much as 80%.

South Africa Braces for Major Exodus. France’s oil giant TotalEnergies (NYSE:TTE) is considering relinquishing its acreage in offshore South Africa, having discovered 4.5 TCf of gas assets with the Luiperd and Brulpadda discoveries, however hindered by government red-tape and regulations.

AngloAmerican Is Having a Tumultuous 2024. Shares of mining major AngloAmerican (LON:AAL) dropped almost 6% this week after a methane explosion caused a fire at the Grosvenor metallurgical coal mine, accounting for about 30% of the company’s annual coking output.

Chinese Manufacturing Paints a Bleak Outlook. China’s factory activity contracted for a second straight month in June, with the PMI index coming in unchanged at 49.5, with trade tensions vis-à-vis the United States and Europe weighing on new export orders.

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Full: https://alhambrapartners.com/weekly-market-pulse-the-sp-500-rules-everything-around-me/?src=news

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pg. 2

I really like the last 2 chapters of dr fly.
Says it all, and is also valid in many ways in the local market in Australia which suffers the very same plight..

 

[ducati916]

For the systems traders: https://retirementresearcher.com/how-useful-is-historical-data-in-predicting-future-returns/

Some stuff from yesterday:



From the short day today as did TSLA (see above).



NVDA ripped higher carrying all before it.



Indices generally higher.

Futures:





Essentially the tax cuts will be extended under a Trump second Presidency.

Tomorrow the markets are closed for 4 July celebrations.

The NVDA 9



Mr fff



I have a dog in most of these fights, except for copper.

Here they are:



I was hoping for a deeper technical pullback as the fundamental story is so strong. My preference would be FCX.

Is the UST market 'safe' again?



The MOVE would suggest otherwise (ran out of space).

The UST market is at a pretty critical juncture (technically) (fundamentally it is technically f*cked) we'll have to see how this plays out.



jog on
duc

 

[ducati916]

So US markets are closed today.

Not so cryptos:

Bitcoin is celebrating American Independence day by falling over $3000 in overnight trading. That's over a 20% correction in less than a month.

That 60,000 level is Bitcoin is a big one. Below that and things get hairy. So any strength here to recover above 60,000 quickly should be welcomed by the bulls. Because if that doesn't happen quick, look out! Meanwhile, the original Bitcoin (Actual Gold) is hitting new 5-month relative highs. Here is the Gold to Bitcoin ratio. Keep in mind the nominal price of bitcoin is much higher than an ounce of Gold. But remember that Gold is 16x the size of the tiny $1 Trillion Bitcoin market.

Bitcoin is so small that it's not even the size of the Silver Market, which is currently around $1.5 Trillion. Here's a long-term chart of Gold and Silver Futures using Quarterly Candles. Silver is hitting new decade highs with Gold making another new all-time high:

There is a lot of opportunity in this space. Precious Metals keep winning. Are you noticing? And if we know one thing about these cycles, is that historically they never last just a few years. They always last for a decade or two. So let's keep time in mind when it comes to this space. It's less about how high can they go in price, and more about for how long they'll be going up.... odds are a long time. So we want both price and time in our favor. That's what structural bull markets are all about. Now here's something special. I spoke to THE MAN Rick Rule last week about exactly this. There's no one I can think of on the planet that I would rather talk to about Gold and Natural Resources than Rick Rule.

LOL.

Now Gold



There is a video, which I will post over in the gold thread.

For the Bulls: July seasonality



Weekly BTC



Mr fff:



Well if you are jumping, you'll be looking down at the trees.



$MOVE (no space yesterday)



So UST market vol. is rising. The Repo market is under stress from too much supply from Yellen. Will it blow-up again? Possibly. But you know Powell will have got the email and be forced into adding liquidity in addition to tapering of the QT taper.

BTC. I have no idea. Don't touch the stuff.

On the war and integration of AI and robots:

A.I. Begins Ushering In an Age of Killer Robots

Driven by the war with Russia, many Ukrainian companies are working on a major leap forward in the weaponization of consumer technology.

www.nytimes.com

jog on
duc

 

[ducati916]

End of a weird week:



Full: https://angrybearblog.com/2024/07/o...urvey-comes-close-to-triggering-the-sahm-rule









Oil News:

Friday, July 5th, 2024

Whilst market activity was relatively slim with US markets closed for Independence Day holidays, the triple combination of lower US crude, gasoline and diesel inventories have instilled hope in the market that summer demand wouldn’t be that bad after all. Amidst increasing optimism for US interest rate cuts in September, crude is set for another weekly gain with ICE Brent ending the week above $87 per barrel.

Wildfires Threaten Canada’s Production Again. Canada’s oil major Suncor Energy (TSO:SU) has shut down its 215,000 b/d Firebag oil sands site in Alberta due to wildfires 5 miles away, with July expected to see an extended period of hot and dry weather exceeding 86°F.

Middle Eastern NOCs Fight for Santos. Amidst reports that Saudi Aramco could be interested, the UAE’s national oil firm ADNOC has also expressed readiness to bid for Australian oil and gas company Santos (ASX:STO) after the latter’s merger talks with Woodside failed to materialize.

Traders Lose Hope on Nigeria’s Gasoline Debts. Nigeria’s overall debt to suppliers of gasoline has exceeded $6 billion, doubling in less than four months, as the country’s national oil company NNPC was forced to cap runaway prices after the Tinubu government ended fuel subsidies last year.

Bolivia Seeks Russian Help to End Fuel Crisis. Bolivia’s state-run energy firm YPFB is looking to attract investment into its oil and gas sector, with gas production halving in a decade and oil output at its lowest since the 1990s, just as Russia started to supply the country with diesel.

Saudi Arabia Targets 60% Rise in Gas Output. Saudi Aramco plans to ramp up its natural gas production by 60% by the end of this decade, currently producing around 11 billion cubic feet/day, thanks to the $100 billion Jafurah project but also investments into LNG operations abroad.

Venezuela Keeps Crude Production Steady. Defying the White House’s snapback of sanctions, Venezuela managed to slightly increase its oil production last month to 922,000 b/d, up from 912,000 b/d in May, thanks to increasing activity in new drilling and well workovers.

Alaska Sues the Biden Administration. The state of Alaska is suing the Biden administration over its recent decision to restrict access to drilling and mining in the National Petroleum Reserve (NPR-A) of Alaska, citing regulatory overreach and lack of congressional consultation.

Metals Futures Markets Heat Up. Average daily volumes of futures and options traded on the London Metal Exchange posted a 10-year high of 730,385 lots per day in Q2 2024, soaring 27% year-over-year, with nickel leading the way and copper coming in second place.

GM Pays Hefty Fine for Misreported Emissions. US carmaker General Motors (NYSE:GM) was fined with a $145.8 million penalty and forfeit credits worth hundreds of millions of dollars after a government probe found that 2012-2018 model year cars were emitting 10% more CO2 than reported.

European Majors Are Fleeing West Africa. Nigeria’s upstream regulator NUPRC approved the sale of ENI’s (BIT:ENI) local unit to regional producer Oando and the divestment of Equinor’s (NYSE:EQNR) stakes in block OML 128 and the Agbami field to unknown Mauritius-based company Odinmim.

Libya’s Oil Minister Steps Down Again. Libya’s oil minister Mohamed Oun has “temporarily” stepped down from his position as Prime Minister Dbeibeh appointed his deputy to the post, with oil investors increasingly fearful over the fate of the landmark 2024 licensing round.

Shell Takes Huge Impairments. Shell announced it would take an impairment charge of up to $2 billion after the sale of its Singapore refinery to Glencore and the recently announced suspension of construction at the 820,000 mtpa biofuel plant in Rotterdam, citing weak market conditions.

Hurricane Beryl Slows Down Before US Landfall. Hurricane Beryl, having wreaked havoc to Jamaica, is expected to shift northwards and reach the Texas coast early next week, however by the time it is not expected to damage US Gulf platforms as Beryl already weakened to a Category 2 hurricane.

So the big moves were mostly in BTC and Gold/Silver. BTC collapsing and Gold resuming its bull market. Stock indices moved higher but with pretty narrow leadership. This will be a problem moving forward.



USD traded down. Very important.



Liquidity issues in the UST market fell as the USD fell.

How was that accomplished?





Liquidity added from Treasury took the Repo market off the boil.

Nothing is more important than keeping the UST market functioning. If the UST market has another moment, stocks will collapse like a paper bag until the Fed bails both markets out.

We are (in stocks) dancing until the music stops (Chuck Prince CEO Citi prior to 2008 collapse).

Even on the either highly manipulated or bad data that are the employment reports, stuff is starting to break.

This is largely perceived as benign, as it will engender the Fed to cut rates. Hmmm. Not so sure that is a good thing. Has the Fed ever cut rates with the stock market at all time highs? In the 2000 bear, they started to cut pretty quick...did nothing to stop the sell-off.

In a recession the deficits will EXPLODE.

The only way those deficits are paid for is more debt. The UST market is already sputtering as we saw this week. Choking on the issuance of UST debt.

If the SAHM rule triggers, watch out.

jog on
duc

 

[Sean K]

Mr fff just woke me up with a good belly chuckle.

 

[ducati916]

Using the VIX




jog on
duc

 

[ducati916]

Preparing for next week. Earnings back on the table.


Strong economy?



Having a laugh.



Big Banks on Friday. Another round of BS.


And more fantasy CPI numbers.

This is a similar market to the 1999/2000 market. Horrible fundamentals, yet the market just kept going up. Same thing currently. The fundamentals, internals are all hideous, yet the market just keeps grinding higher.

Next post I'll look more closely at that 1990-2000 period.

jog on
duc

 

[ducati916]

So for next week:




Duc's

XLB Bear $88-$86
XLC Bull $87-$88
XLE Bear $91-$88
XLRE Bull $38-$39
XLF Bull $41.50-42
XLI Bear $122-$119
XLK Bull $229-$237
XLP Bear $77-$75
XLV Bull $143.50-$145
XLY Bull $189-$191

Mr fff



The mega-caps that had earnings in the Tech bull market: + semi's and internet indices.



Rhymes it does.

jog on
duc

 

[ducati916]

Full: https://www.wsj.com/finance/commodi...hjuczspg507&reflink=desktopwebshare_permalink






Mixed bag.

Earnings week starts. Really the first serious earnings are Friday with the Banks. I would expect them to hit targets and have their numbers highly manipulated.

Lots of chatter about what will happen when the Fed drops rates.

The consensus is that stocks will take off to the upside.

A chart of the yield inversion with SPX behind:



As you can see there have only been 2 examples since 2005.

Both times the market crashes when we come out of inversion. In mid 2023 as we looked to be coming out, the market fell.

Is this time different?

I'm betting that it isn't.

As we exit, I'm looking for weakness.

Can you buy that dip?

Probably.

The reason being as rates fall, inflation will ignite to the upside. Stocks are a reasonable inflation hedge (to a point). I'll cover sectors that (should) be worth buying in another post. This of course assumes that a market break does in point of fact occur.

jog on
duc

 

[ducati916]

Oil News:

The landfall of Hurricane Beryl led to three casualties in Texas, leaving more than 2 million Houston homes without power, but first reports suggest damage to oil infrastructure has been limited.

- Since making landfall near the coastal town of Matagorda, Beryl has weakened to a tropical storm and is forecast to move across eastern Texas and into the lower Mississippi Valley later in the week.

- Freeport LNG went offline for two days, the only major export terminals to be shut for Hurricane Beryl, sending US LNG feedgas demand to 11.1 BCf per day on July 8, down from the pre-hurricane level of 13.1 BCf per day.

- The port of Corpus Christi reopened Monday afternoon after a three-day halt in operations, whilst the port of Houston is expected to return to the status quo ante Wednesday after officials confirm there is no large-scale material damage.

Market Movers

- US shale producer Devon Energy (NYSEVN) announced it would purchase the Williston-focused firm Grayson Mill Energy in a transaction valued at $5 billion, lifting its oil output to 375,000 b/d.

- Italy’s energy major ENI (BIT:ENI) made a hydrocarbon discovery in Mexico’s Sureste Basin, located in Block 9 and potentially containing 300-400 MMboe of recoverable reserves.

- UK-based energy major Shell (LON:SHEL) is seeking the South African government’s permission to drill up to 5 offshore wells off the country’s west coast, to the south of its prolific Namibia discoveries.

Tuesday, July 09, 2024

The oil markets have withstood the first hurricane test of this season, with oil prices falling back on Tuesday morning. Apart from shipping delays and platform evacuations, Hurricane Beryl seems to have led to relatively little physical damage to refineries and offshore platforms, most probably allowing the markets to focus again on fundamentals and geopolitics later this week.

Kazakhstan Presents OPEC+ Compensation Plan. Kazakhstan’s Energy Ministry said that it would compensate for oil production exceeding its OPEC+ quota according to a new plan that runs all the way through September 2025, seeing its output rise further in June to 7.24 million tonnes.

South Africa’s Power Sector Is Crumbling. South Africa’s state-controlled power company Eskom is reportedly set to publish 2023 figures showing a 15 billion rand ($823 million) annual loss, mostly stemming from its emergency use of diesel to avoid blackouts across the country.

US Wind Ambition Unlikely to Reach Target. According to industry estimates, the US will fall short of the Biden administration’s 2030 offshore wind target of 30 GW, installing only 14 GW of capacity by the end of this decade as high interest rates and soaring material costs hamper development.

Carlos Slim Builds Mexican Offshore Portfolio. One of the world’s richest men, Mexican billionaire Carlos Slim said his holding company signed a $1.2 billion exploration and services deal with state oil firm Pemex to develop the giant stalled Lakach natural gas project.

Global Temperatures Hit All-Time High in June. The global temperature average rose to an all-time high of 16.66° C, 0.14° C above the previous record set in June 2023, with sea surface temperatures also hitting unseen heights as warmer oceans lead to stronger hurricanes.

China Reports Giant Gas Discovery. Chinese state-owned giant Sinopec (SHA:600028) reported a giant oil and gas find after exceptional flow rates from its Hai-3 exploration well in the Beibu Gulf of the South China Sea, prompting it to consider using an FPSO for the deepwater project.

Oil Majors Share the Emirates’ LNG Dreams. Less than a month after the UAE’s national oil firm ADNOC took an FID on Ruwais LNG, it is rumored that oil majors Shell, BP, TotalEnergies, and Mitsui have agreed to buy 10% each in the new 9.6 mtpa capacity liquefaction project.

Japan Power Prices Soar Amidst Scorching Heat. Day-ahead electricity spot prices in Tokyo have surged above ¥20 per kWh ($0.12/kWh) this week, the highest since February 2023 as heatwaves put Japan’s generation to a test, with several gas-fired plants halted due to unplanned maintenance.

Northern Iraq Is Overflowing with Kurdish Crude. Just as oil production from Kurdish-controlled territories is nearing 300,000 b/d, output from the Kirkuk region which the federal government controls has jumped to 360,000 b/d after NOC rehabilitated damaged wells.

Nigeria Declares Emergency to Lift Production. Nigeria’s national oil company NNPC has declared a state of emergency as the country cannot even lift production to its OPEC+ production quota of 1.5 million b/d, obstructed by rampant theft and pipeline vandalism.

Reformist Wins 2nd Round of Iran Elections. Former health minister in the Khatami government, reformist candidate Masoud Pezeshkian won Iran’s presidential election with a 54% result, promising to revive JCPOA negotiations and advocating for foreign investment into Iran’s oil sector.

Canada Seals Off Its Mining Industry from Takeovers. Having greenlighted Glencore’s takeover of the coal unit of Teck Resources, Canada’s government indicated it would allow large mergers and acquisitions only under the most exceptional circumstances, worrying investors.

China Back to Buying Saudi Crude Again. Chinese buyers lifted the lowest volume of Saudi term nominations in June at just 1.12 million b/d and were reported to seek even less in June, however drastic price cuts from the Saudi national oil firm will lift August demand to 1.4 million b/d.




The 'pain' trade is lower. But until it arrives, you just have to be long.



Economic data sucks.



Industrials & energy should do well.



A BTC bull.

Mr fff



Rangebound, choppy, boring market for the most part.

Beware over-trading markets that just churn.

With earnings season back, we should see some volatility return to individual names other than just the mega-caps.

jog on
duc

 

[ducati916]

The largest 7



Full article: https://info.ndr.com/ndr-signals/th...=TCR&utm_medium=email_action&utm_source=email



Same thing.



Amazed that there is still $6B in this thing.



The significance is a BO of NZD$ = Risk on (good for stocks).



Banks moving ahead of earnings. I'd be surprised if they missed and traded lower. These chaps are the professionals at cooking the books all with the blessing of the Fed and regulators. If they miss, their CEO should be sacked on the spot.



Relentlessly lower.




Need some caution.




Missed it.



Another bellweather survivor from the 2000 bull crash. Not my cup-of-tea.




Run out of chart space.

I'll save them for tomorrow.

jog on
duc

 

[ducati916]

Passive:

GMO: Passive Investing’s Impact Has Been Overblown, But It’s Not Negligible

In its widely read quarterly letter, the asset manager addresses the questions that keep coming.

www.institutionalinvestor.com

Are Index Funds a Bubble?

Lanju Photografie, Unsplash Recently a friend reached out asking for my take on concerns raised in this article: What Goes Up I hate these kind of requests, probably because every time this sort of hand wringing article appears, people want me to talk them down off the ledge. Ordinarily, I...

jlcollinsnh.com

Follow Harry Dent at Your Own Peril | ThinkAdvisor

The economist is predicting an 86% stock drop. But he has been consistently wrong for 30 years.

www.thinkadvisor.com

https://www.wsj.com/real-estate/property-fraud-allegations-snowball-as-commercial-real-estate-values-fall-492d964c?st=cm8zk5v1egs4k2o&reflink=desktopwebshare_permalink

jog on
duc