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Tag Archives: US

13/7/19: BRICS and G7

As a side note: the BRICS now have a bigger share of the world economy than the Euro area and the U.S. combined: In 2019, BRICS combined GDP will surpass (using PPP-adjusted GDP) that of G7 economies, and in 2020, based on IMF forecasts, it will exceed the combined share of the world GDP for the US + EU27 economies.Not a single BRICS economy is currently represented in G7. Dire...

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In Bizzaro Beauty Contest, the US is Still the Least Ugly

Our hypothesis that the market had reached peak dovishness toward the Fed remains intact after the employment data.  Job growth was the strongest since January.  The participation rate and the unemployment rate ticked up. Average hourly earnings edged 0.2%  higher, and, with revisions, maintained a 3.1% year-over-year pace, which is a bit disappointing.   The jobs report trumps the PMI/ISM data and suggests that although the economy slowed in Q2, the sky is not falling.  There is no...

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Can President Trump take credit for record US oil production?

President Donald Trump’s administration has worked tirelessly to rebrand domestic energy policy in the two and a half years since he came to office. As this White House markets it, US energy is “dominant”. Fossil fuels are not produced or exported, they’re “unleashed”. And, of course, US LNG exports have been called “molecules of US freedom”. “The golden era of American energy is now underway,” Trump has said. By the numbers, Trump’s time in office has been a momentous success for oil...

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As Texas temperatures rise, will ERCOT electricity prices boil over?

When record-setting heat swept across Texas in mid-July 2018, ERCOT only narrowly avoided a blowout in power prices with the help of unusually low outages and the fortuitous arrival of a weekend. This summer may be unlikely to get as hot as last year, but shrinking reserve margins continue to emphasize the possibility of surging summer prices. Taking into account increasingly tight reserve margins, upside under ERCOT’s recently revised shortage pricing formula, and higher dependence on wind...

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Europe, US aim to boost ethanol share in gasoline, but obstacles remain

Ambitious emissions targets are driving governments across the globe to mandate greater use of biofuels in gasoline, and higher-ethanol blends of gasoline look set to make further inroads in the EU in the coming year. Electric vehicles and hybrids have dominated headlines and are frequently portrayed as the answer to cutting road transport emissions. But even if all new cars purchased from now on were electric, it would still take several decades before the entire fleet was renewed. Although...

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Global oil reserves data is muddled, but does it really matter? Fuel for Thought

Proved oil reserves, historically a proxy for geopolitical clout and energy security, may be losing their currency in a world set on ushering in the end of the fossil fuel era. The growing acceptance of the climate threat from carbon-rich energy is focusing minds on producing cleaner fuels rather than stockpiling sources of old, dirty ones. But despite growing industry qualms over peak demand and the potential for stranded assets, the issue of who controls the bulk of the world’s...

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Still Patient?

Overview:  Risk-taking was bolstered by the dramatic shift in Draghi's rhetoric less than two weeks after the ECB meeting and a Trump's tweet announcing that there was going to be an  "extended" meeting between him and Xi at the G20 meeting and that the respective staff would begin coordinating.  It was later confirmed by the Chinese media.  Today's focus is on the FOMC.  Barring a rate cut that would surprise, the focus is the extent to which the statement and Powell manage market...

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Oil traders have bigger worries than a new Hormuz tanker war

Oil tankers ablaze in the Gulf of Oman and the US pointing the finger at Iran should be enough to send the price of the world’s most vital commodity skyrocketing. Instead, oil prices have barely budged. Traders are not buying into the theory that Tehran wants a war, but they are worried about demand. Dated Brent assessed by S&P Global Platts – the world’s most important oil benchmark – spiked by over 4% following the attacks on June 13 and traded briefly just above $62/b. On the face of...

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US crude oil exports buoyed by widening WTI/Brent spread

The US exported more than 3 million b/d of crude for the second week in a row in the week ended June 7, aided by macroeconomic factors that have made US oil prices more attractive. According to S&P Global Platts Analytics data, more than 3.18 million b/d was exported from the US last week, down slightly from the estimated 3.35 million that was exported during the week ended May 31. The Energy Information Administration reported US crude exports averaging more than 3 million b/d since the...

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Energy and commodities highlights: Oil price and politics, Permian pipelines, batteries and tariffs

As world leaders and oil company executives gathered at the St Petersburg Economic Forum from June 6, major figures in the world of oil staked out their position on issues of pricing and supply. Russian President Vladimir Putin put the onus on Saudi Arabia to make the case for continuing a supply cut agreement set to expire at month’s end, saying that Russia could do fine with an oil price in the range of $60-65/b. Lukoil CEO Vagit Alekperov said at the forum that $60-$70/b was a...

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