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Tag Archives: crude

Falling Oil Prices An Economic Warning Sign

On Tuesday morning, I got engaged in a debate on the recent decline in oil prices following my report on COT Positioning in the space. To wit: “The inherent problem with this is that if crude oil breaks below $48/bbl, those long contracts will start to get liquidated which will likely push oil back into the low 40’s very quickly. The decline in oil is both deflationary and increases the risk of an economic recession.” It didn’t take long before the debate started. “Aren’t low oil prices good...

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Saudi Aramco IPO is mission impossible

Saudi Aramco’s IPO looks doomed to failure as it targets a $2 trillion flotation. Tepid oil prices, the fraught politics of the Middle East and the demonization of fossil fuel producers in response to climate change fears have all made the initial public offering (IPO) a mission impossible. The kingdom had looked poised to list up to 2% of its shares on its domestic market within weeks. But the long-delayed partial privatization of the world’s largest state-owned oil company now faces...

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Commodity Tracker: 4 charts to watch this week

Asian demand for light crude oil grades and record US gas exports to Mexico are in the sights of S&P Global Platts editors this week. Plus, European gas price trends and the prospects for German power plant fuel switching. 1. Asian crude buying helps widen spread between light and heavy grades   What’s happening? Asia was quick to respond to the growing uncertainty over Arab Light and Arab Extra Light crude supplies following the September 14 attacks on core Saudi oil...

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Commodity Tracker: 6 charts to watch this week

US-China trade tensions and a febrile political climate in the UK are driving key commodity flows and price trends this week. S&P Global Platts editors’ latest pick of charts spans agriculture, the energy complex and metals. 1. US soybean stocks pile up as Chinese export avenue cut off   What’s happening? At the start of the new US marketing year, farmers are sitting on a huge pile of soybean stocks, estimated at 29.1 million mt, up 144% from 2017-18 levels. The escalated...

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Insight Conversation: Jeffrey Currie

In the latest Insight Conversation video, Jeffrey Currie, global head of commodities research at Goldman Sachs, talked to Paul Hickin about the bank’s call on oil prices and the commodities impact of the US−China trade war. The big question on everyone’s lips is whether we are going to see a return to oil prices at $100/barrel and beyond. Where do you think the market is going? We’re not saying $100/barrel oil cannot happen. It’s not our base case, nor do we think it’s very likely. To get a...

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In the LOOP: LOOP Sour crude oil discount to Mars narrows while API gravity declines

US Gulf Coast crude oil blend LOOP Sour has gradually gotten heavier over the year while its discount to one of its component blends, Mars, has narrowed, according to data from the Louisiana Offshore Oil Port and S&P Global Platts. LOOP Sour delivered ex-cavern in August had an average API gravity of 29.6 and sulfur content of 2.49%. The average API has declined in five of the past seven months and 0.9 degrees over that time. LOOP Sour in August was at its heaviest since reaching 29.5...

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Insight from Washington: US abandons oil sanctions to avoid owning Venezuela’s collapse

Just more than a year ago, it was not a question of ‘if’, but ‘when.’ As Venezuela’s leftist leader Nicolas Maduro consolidated power in an election derided as a fraud by the international community, the Trump administration readied exacting sanctions on the South American nation’s oil sector. “All options are on the table,” said a senior administration official during a July 2017 briefing with reporters, adding that sanctions could be imposed in a matter of days. “All...

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Not Exactly Paradox, Reflation In Oil Deflation In Copper

The PBOC really needn’t have conducted the last few of its RRR raises. By the time they were in the books, Chinese inflation was already well underway toward being tamed. Though their CPI wouldn’t register for a few more months still, peaking in July 2011, commodities had already turned decidedly downward. Copper went first, hitting its high on Valentine’s Day. Oil would keep going further still, but ultimately turning around in May 2011. By the time the sharp liquidations rocked global...

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Iraqi crude oil imports to USGC up, others fall: In the LOOP

Imports of Iraqi crude into the US Gulf Coast increased so far in 2018 while there have been fewer cargoes from Venezuela, Saudi Arabia, Mexico and Kuwait, according to the most recent data released by US Customs Bureau data. From January to mid-June, US Gulf Coast refiners have imported more than 90 million barrels of Iraq’s light and heavy Basrah crudes, a 14% rise from 79 million recorded in the same period of time in 2017. However, USGC refiners bought only 60 million barrels of...

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The curious case of China’s missing trade data

The longer China delays publishing its detailed trade data for April, the more it is feeding speculation about the possible ulterior motives behind withholding the numbers, and hurting credibility. Also, with the amount of geopolitical upheaval going on, the transparency of future Chinese trade data releases is being questioned with each passing day as market participants harbor growing suspicions about Chinese intent. A source close to the government said it was highly likely that future...

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