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Wednesday, 25 May 2016
Last year, we were the first financial site to explain how the Shemitah seven-year cycle would have an important and disastrous effect on the markets. The Shemitah ended in the third quarter of last year and just as we predicted, it was the worst quarter in worldwide stock markets since the last Shemitah in 2008.
Since then we have been the leader in explaining further Shemitah trends embedded in the once-every-49-year, Jubilee Year. The Jubilee Year ends on October 2nd of this year, and we expect even worse events to occur as October approaches.
Now, famous investor, Jim Rogers, has just released a new warning saying the same. He is even using biblical references to warn of a financial tsunami that could take place either this year or next. He has just said, “A $68 trillion ‘Biblical’ collapse is poised to wipe out millions of Americans.”
Rogers co-founded the Quantum Fund with George Soros in the early 1970s. The fund generated returns of 4,200 percent over 10 years and made fortunes for both men. Soros and Rogers, having worked together for so long, probably both have access to information the regular person doesn’t. Soros recently was in the news for shorting the stock market and making gold his largest held asset and predicting an impending crisis.
As the pendulum of market sentiment swings back towards the bears amid weak economic data, a stabilizing U.S. rig count and the hopeful return of Canadian production, oil prices are starting the week looking lower. Hark, here are six things to consider relating to the oil market today: 1) Japan kicked off a bearish economic tone overnight, with exports falling for a seventh consecutive month – driven by recent strength in the Yen. Imports fell a whopping 23.3 percent, the biggest decline since October 2009. As we know all too well, all paths lead back to energy, hence it is no surprise to learn that lower oil and gas prices contributed the most to the decline. Japan’s trade surplus was […]
The commodities market has turned a corner and prices are unlikely to return to lows hit in the first quarter, according to Citigroup Inc., which boosted forecasts from metals to grains amid the oil-led recovery. The bottom was likely hit this year when weak fundamentals across all commodities were reinforced by bearish selling after the collapse of China’s equity markets, Citigroup analysts including Ed Morse wrote in a report Tuesday. The bank is now predicting Brent oil will climb to $50 a barrel in the third quarter, earlier than its previous forecast for the fourth quarter, while increasing its year-end gold estimate by $100 an ounce to $1,250. “This recovery is starting in the oil sector, where market fundamentals are tightening much faster than we had forecast at the start of the year,” the analysts wrote. “Across the industrial metals, markets are also slowly firming and prices bottoming as […]
Tuesday, 24 May 2016
The Fed Setting Up For A U.S. Dollar Collapse If No June Rate Hike
Oil’s Recovery Under Threat as Tankers Run in Circles Off China
In late February, the tanker Jag Lok loaded oil from Equatorial Guinea in western Africa and set sail for the Chinese port of Qingdao, the gateway to the world’s newest buyers of crude, a journey of more than 12,000 nautical miles. After reaching its destination in early April, the ship churned in circles for 20 days before it got a chance to deliver its cargo. That’s because the port in Shandong province was struggling to handle a record number of vessels arriving to supply the privately held refineries called “teapots” that dot the region, ship-tracking data compiled by Bloomberg show. The backup illustrates the challenges facing the independent refiners, which have emerged as a bright spot of rising demand amid a global glut. The processors are forecast by ICIS-China to purchase a combined 1 million barrels a day of crude from overseas this year, up from 620,000 barrels in […]
United States remains largest producer of petroleum and natural gas hydrocarbons
Source: U.S. Energy Information Administration The United States remained the world’s top producer of petroleum and natural gas hydrocarbons in 2015, according to U.S. Energy Information Administration estimates. U.S. petroleum and natural gas production first surpassed Russia in 2012, and the United States has been the world’s top producer of natural gas since 2011 and the world’s top producer of petroleum hydrocarbons since 2013. For the United States and Russia, total petroleum and natural gas hydrocarbon production, in energy content terms, is almost evenly split between petroleum and natural gas. Saudi Arabia’s production, on the other hand, heavily favors petroleum. Total petroleum production is made up of several different types of liquid fuels, including crude oil and lease condensate, tight oil, extra-heavy oil, and bitumen. In addition, various processes produce natural gas plant liquids (NGPL), biofuels, and refinery processing gain, among other possible liquid fuels. In the United States, […]
Key Pipeline Could Unleash Alberta’s Oil Sands
Alberta Pipeline Canadian energy regulators handed a win to Alberta’s oil sands producers last week, recommending approval for a major oil pipeline expansion to the Pacific Coast. Canada’s National Energy Board determined that the expansion of the Trans Mountain pipeline is in the public interest, handing the project’s developer, Kinder Morgan, a key victory. Kinder Morgan already operates an existing pipeline that runs from Alberta to British Columbia, moving 300,000 barrels of oil per day to the coast. But the company is trying to expand the pipeline by running a twin line that would nearly triple capacity to 890,000 barrels per day. Kinder Morgan’s share price jumped by more than 3 percent on news of the NEB decision. The pipeline is one of a handful of major projects that Alberta’s oil industry is desperate to push forward. The lack of pipeline capacity is holding back Canadian oil exports, and […]
How The U.S. Dollar Influences Oil Prices
Fed Building Crude oil has reached a critical technical level, which is likely to test the resolve of the bulls to push prices higher. The bulls have a favorable tailwind with production outages reducing the supply glut. Till about two weeks ago, the drop in the U.S. dollar was also supportive of the crude oil prices, but since then, the dollar has recovered, putting pressure on the crude oil prices. The U.S. dollar and the various commodities have an inverse correlation. The chart below shows the correlation between crude and the U.S. dollar index for the past 12 years. (Click to enlarge) The chart shows a clear inverse correlation between the two, especially when there is a sustained trend. From 2003 to 2008, the dollar was in a sustained bear trend, during which, crude oil witnessed one of its strongest bull runs. When the dollar formed a bottom, crude […]
Monday, 23 May 2016
A Blizzard of Bad News
A perfect blizzard of bad news predictions compels me to return to the charge on the EU referendum.
First, we had David Cameron and a swarm of former US secretaries and NATO generals telling us the world will be engulfed in war and ‘terrorism’ if the UK leaves the EU.
This is straight out of the fruitcake department.
I’m surprised they didn’t invoke the Four Horsemen of the Apocalypse.
Then we had another crowd whose chief claim to fame was to miss the most catastrophic economic event since the Great Depression, the 2007/8 crash, warning of economic meltdown if we leave.
So let us set the record straight. The EU had no bearing on our sending troops to Iraq, Afghanistan, Sierra Leone, Mali, Libya or Syria.
Nor has it stopped us supplying weapons and equipment to Saudi Arabia, Yemen, Bahrain, the Israelis and an assortment of ‘rebel’ groups.
We also supported the overthrow of democratically elected governments in Egypt and Ukraine – and, as I write, in Brazil.
The Washington political class always has suffered from insularity, as their surprise at the rise of Trump shows. An early version of this blindness occurred in 1816 when members of the 14th Congress voted to more than double their pay to a princely $1,500 annually, (about $25,000 in 2016 dollars), a sum much larger than the earnings of almost every voter in the country.
Lance Roberts of Real Investment Advice blog plucked this from a recent post by Daniel Thornton, a longtime economic advisor at the St. Louis Fed, and asked the question: “Is this the scariest chart out there?” Basically, it goes all the way back to 1952 to show just how out of whack household net worth has become. As you can see, the last two times there was a big trend divergence, a bust soon followed. Thornton describes it as “monetary and fiscal policy insanity,” and predicts there’s more to come when the bubble bursts — which could be as soon as this year.
The scenario presented above uses BP’s Energy Outlook 2035, published in Feb 2016. This outlook does not extend to 2040 and maximum output is 88 Mb/d in 2035 at the end of the scenario. This scenario is still optimistic, but is more reasonable than the EIA AEO 2016. Extraction rates rise to 10.6 percent and the annual decline rate rises to 2.5 percent in 2042 and is reduced to less than 2 percent by 2053.
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