Baltic Dry Index. 1313 -04 Brent Crude 78.41
LIR Gold Target in 2019: $30,000. Revised due to QE programs.
Why did I take up stealing? To live better, to own things I couldn't afford, to acquire this good taste that you now enjoy and which I should be very reluctant to give up.
OPEC, with apologies to Cary Grant. To Catch A Thief.
As of this morning, it looks like Asia and much of dying Europe is about to get oil tax relief from OPEC. The suicidal Europeans, as usual, will squander the relief by a lunatic sanctions fight with Russia over a futile attempt at saving something for Uncle Scam in the Ukraine following his botched Kiev coup in February. The Asians will seize the OPEC tax relief with both hands. America’s frackers say lower oil prices don’t matter to them, “they’re insulated” since “a shift away from industries like steelmaking and into services such as health care has helped make the economy less reliant than ever on oil and natural gas, according to government data compiled since 1950.”
It’s madness of course. Lower oil prices at the least means lower profitability and less ability to service the massive fracking debts. At the worst it’s a return to an old fashioned oil bust. Since everyone says that they are going to carry on producing no matter what the price, I suspect that we are heading for $50 oil in short order, possibly as soon as Friday. “Houston we have a problem.” It’s enough to make a Texan oil fracker choke on his Thanksgiving Turkey. And let’s not mention Brazil, Venezuela, or Nigeria, where the Naira has just gone into freefall.
Faced with the choice between changing one's mind and proving that there is no need to do so, almost everyone gets busy on the proof.
John Kenneth Galbraith
U.S. Crude Tumbles to Four-Year Low Before OPEC Meeting
Nov 25, 2014 10:04 PM GMT
West Texas Intermediate crude fell to the lowest level in more than four
years after nations supplying a third of the world’s oil failed to pledge
output cuts before this week’s OPEC meeting. Venezuela, Saudi Arabia, Mexico and Russia said they plan to start quarterly monitoring of oil prices. Today’s talks in Vienna didn’t result in any joint commitment to reduce supplies, said Igor Sechin, who runs Russian state oil producer OAO Rosneft.
“Even those four countries are not agreeing to any kind of cut, and the last thing the Saudis want is to be the ones doing all the cutting,” said Tariq Zahir, a New York-based commodity fund manager at Tyche Capital Advisors. “You have to get an above 2-million-barrel cut from OPEC to stabilize the market.”
WTI for January delivery fell $1.69, or 2.2 percent, to $74.09 a barrel on the New York Mercantile Exchange, the lowest settlement since September 2010. The volume of all futures was 21 percent below the 100-day average.
More
Oil Volatility Here to Stay Regardless of OPEC Decision
Nov 26,
2014 5:00 AM GMT
Whatever the outcome of tomorrow’s OPEC meeting, options traders are betting
on oil-price swings. That’s because the decision from the Organization of Petroleum Exporting Countries isn’t likely to make much difference. Slowing global demand and a U.S. shale-drilling boom has created a glut that won’t fade any time soon, said Torbjoern Kjus of DNB ASA in Norway.
Half of analysts surveyed by Bloomberg expect a cut in production at the meeting in Vienna tomorrow; the rest don’t see a deviation from OPEC’s 30 million barrel-a-day target. Yet an index tracking expectations for moves in oil prices reached the highest ever versus a gauge that measures volatility in equities, according to Bloomberg data going back to May 2007.
“We are still talking about a market that is 2-million barrels-a-day oversupplied in the first half of next year,” said Kjus, a senior oil market analyst at DNB. “Even if OPEC delivers on net production cuts, we don’t think that will be enough. We are not talking enough to turn this market around.”
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Oil Bust of 1986 Reminds U.S. Drillers of Price War Risks
Nov 26, 2014 3:36 AM GMT
The last time that U.S. oil drillers got caught up in a price war
orchestrated by Saudi Arabia, it ended badly
for the Americans. In 1986, the Saudis opened the spigot and sparked a four-month, 67 percent plunge that left oil just above $10 a barrel. The U.S. industry collapsed, triggering almost a quarter-century of production declines, and the Saudis regained their leading role in the world’s oil market.
So while no one expects the Saudis to ramp up output now like they did then and U.S. shale oil companies are pledging to keep drilling regardless, the memory of that bust looms large for American industry executives on the eve of OPEC’s meeting tomorrow. As the Saudis gather with officials from the 11 other OPEC nations in Vienna, analysts are split on whether the group will cut output to lift prices or leave production unchanged to fight for market share with shale drillers.
“1986 was the big price collapse and the industry did not see it coming,” said Michael Lynch, president of Strategic Energy and Economic Research in Wakefield, Massachusetts, who has covered the oil sector for 37 years. “It put a lot of them out of business. You just don’t forget it. It’s part of the cultural memory.”
The Organization of Petroleum Exporting Countries, responsible for about 40 percent of the world’s output, pumped 31 million barrels a day in October, exceeding its official target of 30 million.
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Drill On: U.S. Mantra as OPEC Power Wanes in the Face of Shale
Nov 26, 2014 12:00 AM GMT
No matter what OPEC countries decide tomorrow about cutting oil output, U.S.
producers already know what they’re going to do: drill on. As Saudi Arabia and its 11 fellow members of the Organization of Petroleum Exporting Countries meet for what’s viewed as the cartel’s most important conclave since 2008’s worldwide financial crisis, the U.S. has the most to gain and the least to lose.
For the oil industry, a significant production cut by OPEC would lift prices and profits across the board and help finance further U.S. energy innovation. And while a weaker response -- or no move -- would put more pressure on energy companies, the industry is increasingly insulated by burgeoning North American output.
“The U.S. oil industry is going to continue on its growth track whether OPEC comes out with a cutback or not,” Daniel Yergin, vice chairman of Englewood, Colorado-based consultant IHS Inc. and Pulitzer Prize-winning author of The Quest. “As oil prices go down, the U.S. industry is going up the learning curve and is better capable of coping with lower prices than it would have been two or three years ago.”
The swagger of U.S. producers in the face of plunging oil prices shows the confidence they’ve gained from upending OPEC’s six decades of market dominance with technology that wrings oil from dense rock for prices as low as $40 a barrel. The shale boom has placed the U.S. oil industry in its strongest position since OPEC began flexing its pricing power in the early 1970s.
----Beyond the ability of producers to remain profitable at lower prices, the broader U.S. economy is even less susceptible to whatever course OPEC might take. A shift away from industries like steelmaking and into services such as health care has helped make the economy less reliant than ever on oil and natural gas, according to government data compiled since 1950.
More
Nigeria devalues naira and raises rates after oil price slide
25 November 2014 Last updated at 17:28
Nigeria has devalued the naira,
saying a drop in oil prices had made it hard to defend its currency.
The country's bank central bank
also raised interest rates from 12% to 13% in a bid to stem foreign reserve
loses.
Nigeria has spent billions of
dollars defending the naira using "dwindling foreign reserves", the
bank's governor said.
Falling oil prices also affected
the Angolan kwanza, which hit a record low against the dollar on Tuesday.
The bank's governor Godwin
Emefiele said: "Falling oil prices have consistently reduced the accretion
to external reserves, thus constraining the ability of the bank to continually
defend the naira and sustain the stability of the naira exchange rate."
The bank moved the target band of
the currency to 160-176 naira to the US dollar, compared with 150-160 naira
previously.
It also raised interest rates by
100 basis points.
Nigeria, which has one of the
biggest economies in Africa, and is one of the continent's leading energy
producers, has spent billions of dollars in the past year shoring up the naira,
Mr Emefiele said.
Foreign reserves stood at around
$37bn (£23.5bn), down over 18% from a year ago.
----Meanwhile, Angola's kwanza traded traded as low as 100.895 against the dollar before recovering some ground to 100.700 on Tuesday.
Angola is Africa's biggest oil
producer after Nigeria.
TAG Oil hits oil, gas-bearing sands in Taranaki basin
HOUSTON, Nov. 25 11/25/2014
The Cheal-E-JV-6 step-out well operated by Tag Oil Ltd.,
Vancouver, BC, intersected more than 9 m of net oil and gas-bearing sands in
the Mt. Messenger formation, satisfying the well’s main objective.
The well, part of New Zealand’s onshore Taranaki basin, was drilled to a total depth of 1,939 m. TAG holds 70% interest.
Cheal-E6 is being completed as a potential oil well with production testing to begin this week and, if economic, will be immediately commercialized through the company’s wholly owned production infrastructure, TAG says.
Because of the “excellent performance and continued encouraging results of the Cheal-E site area,” TAG says it will now proceed to drill the Cheal-E7 step-out well, of which the company holds 100% interest. The company in October 2013 began production-testing the Cheal E-1 and E-2 wells
“It is difficult not to marvel at the imagination which was implicit in this gargantuan insanity. If there must be madness something may be said for having it on a heroic scale."
John Kenneth
Galbraith.
At the Comex silver
depositories Tuesday final figures were: Registered 64.28 Moz, Eligible 112.65
Moz, Total 176.93 Moz.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
“The Germans [your nation here] outside
looked from America to Russia, and from Russia to America, and from America to Russia
again; but already it was impossible to say which was which.”
With apologies to George Orwell and
Animal Farm.
Two mini–flash crashes rock stock market Tuesday
Published: Nov 25, 2014 6:09 p.m. ET
WASHINGTON (MarketWatch) — In two
separate instances Tuesday, stocks plummeted sharply for a brief period before
returning to normal.
At around roughly 10:18 a.m.
Eastern, 88 stocks fell or rose by 1% or more. Eric Hunsader, founder of Nanex
LLC, pointed out the changes on his Twitter feed.
Hunsader said in an interview
that the stocks that rose were being added to the MSCI index, and the ones that
fell were being taken off that market index.
”It could be someone they had
their own basket, and they were all interested in getting it all done and
didn’t care about the price,” he said.
But the market saw another
mini–flash crash at around 2:45 p.m. Eastern, when roughly 40 stocks moved
abruptly for roughly a second.
Hunsader also noted that the stock of Medivation Inc. MDVN,
+0.43% plunged
twice in the same day.
http://www.marketwatch.com/story/two-mini-flash-crashes-rock-stock-market-2014-11-25?dist=tcountdown
American Spring Night 2: Coast-To-Coast Protests, "We Have Every Right To Destroy A System That Seeks To Destroy Us"
Submitted by Tyler Durden on
11/25/2014 19:53 -0500
With countrywide protests having
occured across the nation all day, and more planned into the dark of the night,
many cities are gearing up for another evening of fear and emotion. For now,
the main trouble spots appear to be NYC (Lincoln Tunnel blocked, pepper
spray used, multiple protests arounds Union and Times Square), Minneapolis (car
ploughs down protesters, violence escalating), Cincinnati (main highway
shut down) and Ferguson (2,200 National Guard deployed, multiple
protests, multiple arrests). St. Louis just postponed the Thanksgiving
Day parade, Los Angeles marches blocked Figueroa, Chicago protest
blocked Michigan Avenue, and Oakland (I-580 and I-980 blocked)
President Obama's earlier
comments translated appeared to sound like, 'I condemn the violence but totally
understand it' and Al Sharpton's earlier analogies to a fight did not help. It
appears the American Spring is spreading and while color may have been the
catalyst, it appears youth is the dividing point.
More
"Those entrapped by the herd instinct are drowned in the deluges of history. But there are always the few who observe, reason, and take precautions, and thus escape the flood. For these few gold has been the asset of last resort."
Antony C. Sutton
The monthly Coppock Indicators finished October.
DJIA: +137 Down. NASDAQ: +275 Down. SP500: +210 Down.
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