Baltic Dry Index. 589 +11 Brent Crude 67.17
LIR Gold Target in 2019: $30,000. Revised due to QE programs.
“It is the destiny of the weak to be devoured by the strong.”
Otto von Bismarck.
We open today with oil news from America. An unexpected large drop in crude inventory. Given trouble in oil exporting Libya and minor shipper Yemen, and the recent rise in crude prices into the mid 60s for Brent, we await today’s more important EIA inventory report with interest. Is the rally real or merely nearly free money short squeeze? Does someone somewhere know more than the rest of us?
API data show bigger-than-expected fall in U.S. crude supply
Published: May 12, 2015 4:49 p.m. ET
The American Petroleum Institute late Tuesday reported that crude supplies
fell 2 million barrels for the week ended May 8, according to sources. Analysts
surveyed by Platts expected a decline of 250,000 barrels. June crude CLM5, +0.87%
was at $61.22 a barrel in electronic trading, up from the $60.75 close
on Nymex. The more closely watched Energy Information Administration report
is due Wednesday.http://www.marketwatch.com/story/api-data-show-bigger-than-expected-fall-in-us-crude-supply-2015-05-12
Opec revises up oil demand and cuts US supply forecast
Oil cartel has upgraded its demand forecast on stronger European growth as US drillers struggle
The Organisation of the Petroleum Exporting Countries (Opec) has revised up its forecast for world oil demand this year on higher consumption in Europe’s biggest economies and cut its estimate for the growth in US supply.The group of 12 major oil producers now expects demand for crude to increase by 1.18m barrels per day (bpd) of crude to 92.5m bpd in 2015.
Opec’s latest closely watched market report said: “The upward movement of European oil demand during the second half of 2014 has continued and been enhanced during the first three months of 2015. The main reasons behind these positive developments are the improving economy in large parts of the continent, colder weather during the first quarter of 2015 and an extremely low baseline for the last three years.”
Oil prices have rallied strongly to around $65 per barrel since the beginning of the year to recover some of the lost ground after last year’s slump.
----The group highlighted in the report that US crude oil output began decreasing from the end of the third week of March following a decline of 784 oil rigs since October 2014. This it said represented a loss of around 49pc from a peak number of 1,609 rigs seen last October.
Opec revised down its forecast for US production this year by 40,000 bpd to a total of 13.56m bpd. The group said it’s own member’s production averaged 30.8m bpd in April, an increase of 18,000 bpd on March. Most of the increase came from Iraq and Iran.
More
http://www.telegraph.co.uk/finance/newsbysector/energy/oilandgas/11600394/Opec-revises-up-oil-demand-and-cuts-US-supply-forecast.html
In Greece news, looks like it’s time to head for the hills or bunker. The Greeks themselves think Grexit’s here. The IMF says its pulling out. Europe, the next bailout is all yours. The ball’s now deep in Berlin’s court. With euros, just keep checking the serial number starts with a German “X”.
“Never believe
anything in politics until it has been officially denied.”
Otto von Bismarck.
The real sign that Greece's financial turmoil is getting worse
Greeks are pulling their money out of banks... and spending it on cars
Here is a slightly surprising sign that Greece is in the classic throes of a bank run: car sales jumped by 47pc in April. It was the 20th consecutive month that car registrations of new and used vehicles has risen.People living in a country gripped by financial turmoil often worry about the security of their money. If it's in a bank, it can be caught up in capital controls or lost through insolvency. Better, then, to spend it. And the purchase of choice is often a car.
This makes motor vehicle sales figures a decent proxy for financial turmoil (under some circumstances).
Ordinary Greeks, many of whom are not wealthy enough to hold bank accounts outside of the country, are taking their money of the financial system and spending it on "hard" assets.
In December, when snap elections were called in Greece, monthly car registrations soared by nearly 70pc. Since then, bank desposits have shrunk by nearly 15pc of their total value. Another €7bn left the country in April alone.
A similar phenomenon was observed during Russia's financial meltdown late last year. The rouble's crash resulted in many Russians scrambling to make "high-ticket" purchases - like cars.
During Cyprus's banking crisis in 2013, car registrations increased by nearly a third in 10 months. Many Cypriots rightly feared their unsecured deposits would be at risk from the "bail-ins" of the country's biggest banks.
Cypriot consumers also chose to make their purchases in cash, rather than be tied to financing or hire-purchase deals.
Despite depreciating in value quite quickly, cars are still a handy asset to own because they can be put to productive use - especially if the alternative is just stashing your money under a matress.
More
http://www.telegraph.co.uk/finance/economics/11599513/The-real-sign-that-Greeces-financial-turmoil-is-getting-worse.html
Bankrupt Greece raids emergency IMF funds to avoid unprecedented default
Athens is forced to tap reserves at an IMF escrow account after reports suggest the Fund will not participate in a fresh Greek bail-out
Greece avoided an unprecedented default to the International Monetary Fund on Tuesday after raiding its emergency cash account at the Fund, in a major sign the country is edging ever closer to stiffing its senior creditor.Athens tapped €650m from an escrow account held by the Bank of Greece at the IMF, scraping together a further €100m in cash reserves to avoid going into arrears.
The news came after reports in Spanish paper El Mundo said the IMF was ready to pull the plug on the debt-stricken country.
Fund officials reportedly told European finance ministers they had grave concerns about Athens willingness to slash spending, raise tax revenues, and implement a raft of structural reforms, ruling themselves out of a fresh rescue which could be worth €30bn-€50bn.
The move to effectively shift funds from different accounts at the IMF signals Greece has all but run out of cash to meet its international and domestic obligations. According to estimates, Greece only has a paltry €90m in spare cash reserves, making it unable to fulfil its monthly wage and pensions bill of €1.7bn for May.
With capital still fleeing the country, the European Central Bank was forced to hike its emergency provisions for lenders a day earlier than usual. The ceiling on emergency liquidity assistance was raised by a further €1.1bn on Tuesday, taking total liquidity support to more than €80bn.
The ECB also decided to maintain the current level of haircut it requires from Greek banks posting collateral for the emergency cash. There were fears the central bank would tighten its collateral rules, further squeezing Greece, as the country struggles to meet conditions for its bail-out extension.
----Seen as the "lender of last resort" for even the most war-torn and financially stricken nations, the fact that IMF could withdraw its participation in a bail-out indicates the depths of Greece's woes. Should the IMF pull the plug, this would shift the entire burden of a fresh Greek programme onto Europe.
----Athens has already fallen into arrears with its suppliers, while the country’s hospitals, universities and pension funds are struggling to make their obligations.
Greece’s largest pension fund was forced to take out a short-term loan worth €360m in order to continue paying its members in June.
More
http://www.telegraph.co.uk/finance/economics/11598961/International-Monetary-Fund-will-not-take-part-in-third-Greek-bail-out.html
According to Bloomie, even the EUSSR thinks that Grexit is here and is putting together an aid plan for the transition.
EU Said to Consider Plan for Greece in Event of Euro Exit
6:19 PM BST May 12, 2015Euro-area governments are considering putting together an aid package for Greece to cushion the country’s economy if it was forced out of the euro, according to two people familiar with the discussions.
The Greek government doesn’t expect to need that help. Prime Minister Alexis Tsipras says he’s not considering leaving the currency bloc and is focused on getting the aid he needs to avoid a default.
Even so, European officials are considering mechanisms to ring fence Greece both politically and economically in the event of a euro breakup, in order to shield the rest of the currency bloc from the fallout, one of the people said.
“There is always a plan B,” Filippo Taddei, an economic adviser to Italian Prime Minister Matteo Renzi, said in an interview in Rome on Tuesday, without referring to the aid package specifically.
“But you have to ask yourself who has the ability to step in, in that event. And I think if you start making up a list you realize very quickly that that list is very short.”
While euro-area finance ministers welcomed the progress Greece has made toward qualifying for more financial aid at a meeting in Brussels on Monday, policy makers are still concerned Tsipras may not be prepared to swallow the concessions necessary for a disbursement.
Before any payment will be made, Greece has to submit a comprehensive program of economic reforms, win approval from its creditor institutions, secure the endorsement of euro-region finance ministers and then get past parliaments in Berlin and elsewhere. Greek Finance Minister Yanis Varoufakis said on Monday his country will run out of cash within a couple of weeks unless it gets help.
More
http://www.bloomberg.com/news/articles/2015-05-12/eu-said-to-consider-plan-for-greece-in-event-of-euro-exit
“The statesman's task is to hear God's footsteps marching through history, and to try and catch on to His coattails as He marches past. ”
Otto von Bismarck.
At the Comex silver
depositories Tuesday final figures were: Registered 60.12 Moz, Eligible 117.60
Moz, Total 177.72 Moz.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
Stock up on everything even perhaps crude oil.
Those Wizards of OZ are predicting a new “substantial” El Nino for 2015-2016.
America’s geniuses in the War Party have picked one hell of a time to start a uncivil
war in the Ukraine’s wheat fields.
People
who think they know everything are a great annoyance to those of us who do.
Isaac
Azimov.
El Nino will be 'substantial', warn Australian scientists
By Madeleine Coorey 57 minutes ago
Australian scientists on Tuesday
forecast a "substantial" El Nino weather phenomenon for 2015,
potentially spelling deadly and costly climate extremes, after officially
declaring its onset in the tropical Pacific.
El Nino had been expected last
year when record-breaking temperatures made 2014 the hottest in more than a
century. The Australian Bureau of Meteorology said while the thresholds were
not met until now it was expected to be a significant event.
The Japan Meteorological Agency
also confirmed the phenomenon had begun and forecast it would continue into
late 2015.
"There's always a little bit
of doubt when it comes to intensity forecasts, but across the models as a whole
we'd suggest that this will be quite a substantial El Nino event," David
Jones, from the bureau's climate information services branch said.
"Certainly the models aren't
predicting a weak event. They are predicting a moderate-to-strong El Nino
event. So this is a proper El Nino event, this is not a weak one or a near miss
as we saw last year."
The El Nino phenomenon -- which
is associated with drought conditions in Australia -- can cause havoc for
farmers and global agricultural markets, hitting economies heavily dependent on
the land.
The
last El Nino five years ago had a major impact with monsoons in Southeast Asia,
droughts in southern Australia, the Philippines and Ecuador, blizzards in the
United States, heatwaves in Brazil and killer floods in Mexico.
----US officials announced earlier this year that the long-awaited El Nino had arrived, but the National Oceanic and Atmospheric Administration described it as of "weak strength".
Australian scientists said models
were now showing it was likely to see an increased intensity from about
September and have potential global impacts.
----In the past it has caused heavier-than-normal rainfall in the eastern Pacific and South America -- raising the spectre of floods and landslides, while the southwest United States and southern Africa tend to be drier.
An El Nino is potentially a bad
sign for large swathes of Australia, including the states of Queensland and New
South Wales, which are already in the grip of severe drought.
Neil Plummer, the bureau's
assistant director for climate information services, said it was often
associated with below average rainfall across eastern Australia and warmer
temperatures in the southern half over the hottest months.
"The onset of El Nino in
Australia in 2015 is a little earlier than usual," he said, adding that
this was the first such phenomenon in the tropical Pacific since March 2010.
More
El Niño confirmation puts farmers and climate specialists on alert
Emiko Terazono and Pilita Clark May 12,
2015 8:26 am
Farmers, commodity investors and climate specialists are braced for extreme
weather this year after Australia’s meteorology agency warned of the emergence
of El Niño for the
first time since March 2010.In its latest bulletin, the Australian Bureau of Meteorology said thresholds for the weather phenomenon had been reached in the tropical Pacific.
---- The weather phenomenon is linked to droughts in Southeast Asia as well as warm sea temperatures in South America, affecting prices of metals, wheat, rice, coffee, sugar and cotton.
---- Commodities
analysts at Société Générale say nickel has been the best performer in past El
Niño conditions, with zinc, coffee, cocoa, cotton and soyabean displaying
significant price spikes during the phenomenon.
In previous El Niño events, droughts in Indonesia, a leading nickel
producer, have hit production “by affecting hydroelectric power generation
facilities and lowering the water levels of inland waterways that are vital for
ore transportation”, says the bank. Similarly, flooding in zinc mines in Peru,
the world’s second-largest producer, has caused price spikes.More
http://www.ft.com/cms/s/0/b7d45082-f867-11e4-be00-00144feab7de.html#axzz3ZvcxKqKr
Remember, you heard it on the LIR website first.
Weekend Update – El Nino 2015?
Saturday, 28 March 2015
This weekend we
ask, is this the start of El Nino 2015-2016?
Atacama desert deluge forces Antofagasta to shut three mines
Andrew
NeilMarch 27 2015, 8:11am
Torrential rains and flooding in a desert region in northern Chile have
forced copper producer Antofagasta (LON:ANTO)
to temporarily shut down three of its mines.Thunderstorms and flash floods moved into the usually bone-dry Atacama desert earlier this week, causing the Copiapo River to overflow its banks.
Seven people have already lost their lives and fears of mudslides have prompted authorities to evacuate thousands from their homes, many of which are mining communities situated in narrow valleys that cross the desert.
The desert deluge has been described as the worst rain disaster to fall on the north of the country in 80 years and the army has been placed in charge of public order in the region.
The area, home to giant mines, is famed for being one of the driest places on earth, with the mining town of Calama receiving an average 6 millimeters (0.2 inch) of rain a year.
Antofagasta’s Centinela, Antucoya and Michilla mines are located in the Atacama desert, and today, the FTSE 100 firm said operations in each have been suspended.
more
El Nino.
Get
your facts first, then you can distort them as you please.
Mark Twain.
Solar & Related Update.
With events
happening fast in the development of solar power, I’ve added this new section.
Updates as they get reported.
Sounds to me like
this will be helpful in the solar sector too.
Graphene holds key to unlocking creation of wearable electronic devices
Ground-breaking research has successfully created the world's first truly electronic textile, using the wonder material Graphene.An international team of scientists, including Professor Monica Craciun from the University of Exeter, have pioneered a new technique to embed transparent, flexible graphene electrodes into fibres commonly associated with the textile industry.
The discovery could revolutionise the creation of wearable electronic devices, such as clothing containing computers, phones and MP3 players, which are lightweight, durable and easily transportable.
The international collaborative research, which includes experts from the Centre for Graphene Science at the University of Exeter, the Institute for Systems Engineering and Computers, Microsystems and Nanotechnology (INESC-MN) in Lisbon, the Universities of Lisbon and Aveiro in Portugal and the Belgian Textile Research Centre (CenTexBel), is published in the leading scientific journal Scientific Reports.
Professor Craciun, co-author of the research said: "This is a pivotal point in the future of wearable electronic devices. The potential has been there for a number of years, and transparent and flexible electrodes are already widely used in plastics and glass, for example. But this is the first example of a textile electrode being truly embedded in a yarn. The possibilities for its use are endless, including textile GPS systems, to biomedical monitoring, personal security or even communication tools for those who are sensory impaired. The only limits are really within our own imagination."
At just one atom thick, graphene is the thinnest substance capable of conducting electricity. It is very flexible and is one of the strongest known materials. The race has been on for scientists and engineers to adapt graphene for the use in wearable electronic devices in recent years.
Up next, where there’s a will there’s a way.
Gintech to open 350MW Thailand cell factory
12 May 2015, 07:30
Taiwanese crystalline silicon cell manufacturer Gintech Energy is to build a
350MW cell production facility in Thailand.The PV cell supplier has established a Thailand-based subsidiary under the name Gintech (Thailand) and is to invest around US$45 million in the facility’s first phase to cover the costs of land acquisition, construct and equipment.
Taiwanese cell manufacturers have been under pressure to relocate production capacity overseas to avoid the latest anti-dumping measures imposed by the US on Chinese solar imports, which include equipment manufactured using cells made in Taiwan. The impact of the US duties has been a key factor in falling sales reported by Taiwanese cell manufacturers in recent months.
Gintech expects the factory to be operation before the end of the year and start commercial production in Q1 2016.
Dr Wen-Yen Pan, chairman and CEO at Gintech Energy, said the factory’s establishment would help diversify the company’s production capacity and leverage its resources more effectively.
----Gintech president and COO Dr Wen-Whe Pan said that Thailand would serve as an “ideal base” for the company to serve emerging markets in the Asia Pacific region and would help it expand on the company’s existing talent pool.
Taiwan-based Gintech last month reported that its solar cell sales in March fell to the lowest level in more than two years, falling almost 26% sequentially to NT$832 million (US$26.6 million).
Gintech is the first Taiwanese cell producer to establish meaningful capacity outside Taiwan and the first to Taiwanese cell producer to select Thailand as a manufacturing base.
China-based integrated PV manufacturer'sTalesun and Trina Solar have both recently selected Thailand for their first overseas production plants, while JinkoSolar has selected Malaysia.
More
The monthly Coppock Indicators finished April
DJIA: +112 Down. NASDAQ: +198 Down. SP500: +150 Down.
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