Tuesday, 8 December 2015

Sell Aberdeen!

Baltic Dry Index. 551 -12       Brent Crude 40.80

LIR Gold Target in 2019: $30,000.  Revised due to QE programs.

Yesterday it was all about oil and falling commodities. After Friday’s OPEC non meeting, a free for all collapse in the crude oil price took place yesterday. It’s fatal for American frackers, Canadian tar pits and an independent Scotland. Sell Aberdeen.

Below, yesterday’s action in the commodity depression.

Oil Tumbles to Six-Year Low as OPEC Abandons Production Target

December 6, 2015 — 11:54 PM GMT Updated on December 7, 2015 — 8:28 PM GMT
Oil fell to the lowest level in more than six years amid speculation that a record global glut will be prolonged after OPEC effectively abandoned its longtime strategy of limiting output to control prices.

The Organization of Petroleum Exporting Countries will keep pumping about 31.5 million barrels a day, President Emmanuel Ibe Kachikwu said Friday after a meeting in Vienna. OPEC is setting aside its output quota of 30 million barrels a day, a target it’s breached the past 18 months, until members gather again in June. Declines accelerated as the dollar rose on prospects for higher U.S. interest rates. Gasoline and diesel also closed at the lowest levels since the financial crisis of 2008 that sent the country into a recession.
West Texas Intermediate for January delivery sank $2.32, or 5.8 percent, to settle at $37.65 a barrel on the New York Mercantile Exchange, the lowest close since February 2009. The volume of all futures traded was 63 percent above the 100-day average at 2:40 p.m.

Brent for January settlement dropped $2.27, or 5.3 percent, to end the session at $40.73 a barrel on the London-based ICE Futures Europe exchange. It was the lowest close since February 2009. The European benchmark crude closed at a $3.08 premium to WTI.

----Tumbling oil helped spur a rout in energy stocks, which were the worst performers on the Standard & Poor’s 500 Index. Williams Cos., a pipeline company, dropped 17 percent, making it the worst performer on the S&P 500 Monday. Exxon Mobil Corp. and Chevron Corp., the biggest U.S. energy producers, fell 2.9 percent and 2.6 percent, respectively. The pain wasn’t limited to the U.S., as BP Plc slipped 3.4 percent and Royal Dutch Shell Plc decreased 4.2 percent.

OPEC's Oil Market Disarray Looks Like 1990s Slump All Over Again

December 7, 2015 — 2:53 PM GMT Updated on December 8, 2015 — 12:01 AM GMT
OPEC has seemingly dropped any attempt at trying to fulfill its founding mission and manage the oil market, sending global benchmark Brent crude to a six-year low. For Saudi Arabia’s Ali al-Naimi, the most powerful and longest-serving of the group’s oil ministers, it may have seemed like history was repeating itself.

There are several striking parallels between the Organization of Petroleum Exporting Countries’ current situation and the period from 1997 to 1999, when the group lost control of the market and oil slipped to less than $10 a barrel. While investors may wonder whether markets will follow a similar trajectory this time, it’s important to remember that OPEC emerged from the crisis to see oil prices surge all the way to almost $150 a barrel. If the parallels hold, markets could be in for a wild ride.

----The oil slump of 1997 to 1999 was compounded by El Nino, which curbed demand for heating fuel by warming the ocean surface in the equatorial Pacific and making fall and winter in the Northern hemisphere milder than normal. Fast forward to 2015 and El Nino is already comparable to the record events of those years, according to the Bureau of Meteorology of Australia. Heating oil stockpiles in the U.S. and northern Europe are high, potentially affecting overall crude demand.

OPEC Unshackled From Quota Could Add Millions of Barrels

December 7, 2015 — 11:52 AM GMT Updated on December 7, 2015 — 12:43 PM GMT
OPEC’s new free-for-all production stance could lift the lid on millions of barrels of additional crude supply next year.
“Everyone does whatever they want” now that the Organization of Petroleum Exporting Countries has effectively abandoned its formal production target, Iranian Oil Minister Bijan Namdar Zangeneh said after the group met on Friday. What Iran wants is to revive exports by about 1 million barrels a day when sanctions are removed next year. It’s not the only member with potential to swell the global oil surplus, with millions of barrels of capacity lying unused under the sands of Saudi Arabia and Libya.
“It means more OPEC oil next year,” Jamie Webster, a Washington-based oil analyst for IHS Inc., said of the organization’s Dec. 4 decision. “OPEC is not cutting. With Iran looming, as well as largely only upside risk for Libya, the smart money is on more, and not less, production.”
----Libya’s output has been strangled by the rivalry of two separate governments, protests at oil fields and attacks from Islamist militants. The holder of Africa’s biggest crude reserves is pumping at roughly a quarter of its pre-war capacity of about 1.6 million barrels a day. The International Energy Agency currently doesn’t count the nation’s shutdown oil fields as “spare capacity” and said October’s recovery in output to 430,000 barrels a day “may prove fragile.”

Saudi Arabia, OPEC’s biggest and most influential member, has for years held back output in reserve for use during a crisis. It was idling about 2 million barrels a day, or 16 percent of total capacity, for this purpose in October, the IEA estimates.

Saudi Arabia may choose to tap those unused reserves as it faces increasing output from regional rival Iran next year, rather than making way for those barrels, according to Mike Wittner at Societe Generale SA. Discarding OPEC’s commitment to adhere to any particular limit may signal Saudi Arabia’s readiness to do exactly that.

Iron Ore Plummets Below $40 a Ton as Global Glut Hurts Outlook

December 7, 2015 — 11:16 AM GMT Updated on December 7, 2015 — 7:41 PM GMT
Iron ore sank below $40 a metric ton on rising low-cost supply from the world’s top miners and weakening demand in China, with investors assessing the impact of the first shipments from Gina Rinehart’s Roy Hill mine within the coming days.

Ore with 62 percent content delivered to Qingdao lost 2.4 percent to $39.06 a dry ton, a record low in daily prices compiled by Metal Bulletin Ltd. dating back to May 2009. The raw material is headed for a third annual decline and has lost 80 percent since peaking in 2011 at $191.70. Shares of top producer Vale SA fell to an 11-year low.

Iron ore has been pummeled as a slowdown in China hurt demand as producers including Brazil’s Vale and BHP Billiton Ltd. and Rio Tinto Group in Australia boosted supply to defend market share. As data last week showed China’s steel industry shrank further, billionaire Rinehart’s mine in Australia’s Pilbara geared up to start exports, with two vessels set to be loaded at Port Hedland. Stockpiles at China’s ports, tracked as a gauge of demand in the largest user, climbed to the highest in about seven months.

The drop below $40 would reflect “weak demand, post-summer destocking, and perhaps a buyers’ strike on the expectation of lower prices given the rate of seaborne’s ongoing supply expansion,” Tom Price, an analyst at Morgan Stanley in London, said before the price data were released. The outlook for China’s steel demand is subdued, he said.

Copper Slips on Stronger Dollar, Demand Worries

Traders are also bracing for a slew of Chinese economic data

Updated Dec. 7, 2015 10:50 a.m. ET
Copper prices pulled back from a two-week high on pressure from a stronger dollar and continued concerns about weaker global demand for the industrial metal.

The most actively traded copper-futures contract, for March delivery, was recently trading 2.20 cents, or 1.1%, lower at $2.0570 a pound on the Comex division of the New York Mercantile Exchange.

Prices had rallied last week after Chinese producers announced they would cut output in 2016 and after the dollar plunged to a one-month low against the euro. China is the world’s No. 2 copper producer and any reduction to supply helps soothe long-running fears about a global glut. Meanwhile, a weaker dollar makes the dollar-denominated metal less expensive for foreign buyers.

On Monday, however, the dollar strengthened against other currencies, forcing copper prices to pull lower. The WSJ Dollar Index was recently trading up 0.6% at 90.23.

“The stronger dollar continues to pressure the commodities complex this morning, which includes the industrial commodities like copper,” sad Dave Meger, director of metals trading with High Ridge Futures in Chicago.

Copper traders are also bracing for a slew of Chinese economic data, with inflation, trade, retail sales and industrial production reports all due this week. China is the world’s top copper buyer, driving about 40% of global demand, but signs that its economy is slowing have helped push copper prices to six year lows on concerns about weaker demand.

At the Comex silver depositories Monday final figures were: Registered 42.89 Moz, Eligible 115.60 Moz, Total 158.49 Moz. 

Crooks and Scoundrels Corner

The bent, the seriously bent, and the totally doubled over.
Degenerate derivatives gambling, phony “triple-A” securities fraud, bogus US mortgages  to people with no job, no assets and no income, by the banksters and Wall Street’s Great Vampire Squids, may have crashed the global financial system back in 2007-2009, but so far no Anglo-American Bankster or Squid has gone to jail. No so in Brazil, where a different set of rules seem to apply.

The Brazilian Billionaire Living in a Rat-Infested Jail

December 6, 2015 — 10:01 PM GMT Updated on December 7, 2015 — 3:30 AM GMT
Twelve days ago, Andre Esteves moved into a cell with concrete beds. His head was shaved. Some of his fellow lodgers are rats, attracted by the landfill next door.
The 47-year-old is still a billionaire, but one using a collective squat toilet in a unit of the notorious Bangu penitentiary complex on the edge of Rio de Janeiro. Outside, smells from sewage ditches blend with whiffs of deep-fried tidbits women buy for their incarcerated husbands from a clutch of vendors near the entrance. 
Inside, the former chairman and chief executive officer of Grupo BTG Pactual, Latin America’s largest independent investment bank, washes with bar soap cut into slices by guards looking for contraband.
Esteves’s detention, along with the incarceration in June of the head of Brazil’s largest construction conglomerate, has spread more than a little schadenfreude in a country accustomed to impunity for white-collar offenders. The executives are symbols of a generation of corporate leaders who profited from a boom that turned Brazil into the largest developing economy after China. A corruption probe sent them to prison to await trial, helped throw the country into a deep recession and left President Dilma Rousseff fighting for her political survival.
Antonio Carlos de Almeida Castro, a lawyer representing Esteves, said the reaction isn’t surprising. “People usually hate bankers,” he said. He’s confident about his client, who has denied charges that he obstructed the corruption probe.
“He has a very steady character,” Castro said, “but of course no one wakes up normal at Bangu 8 if one is innocent.”
Esteves -- who once joked that BTG stood for Better than Goldman -- was arrested on Nov. 25 as part of a pay-to-play corruption probe called Operation Carwash that has engulfed state-run oil giant Petrobras and some of the country’s largest builders. The alleged scheme inflated prices for construction projects and kicked money back to Petrobras officials and others.
There have been more than 110 arrests since March 2014, including of Senator Delcidio do Amaral, the first of a sitting federal lawmaker since the military dictatorship that ruled the country until 1984. Four former top Petrobras officials have spent months in a six-cell temporary federal jail.
Before Esteves, the most prominent executive taken into custody was Marcelo Odebrecht, the CEO of Odebrecht SA, a family-owned construction company that has thrived on government contracts. The 47-year-old Odebrecht is incarcerated in a district close to Curitiba, the capital of Parana state, in a prison with space set aside for Carwash defendants. Among the personal possessions he’s allowed to keep in his cell are four pieces of underwear, three white T-shirts, six chocolate bars and eight sheets of letter-size paper, according to local government officials. (A judge accused him of using one sheet of the paper to pen a note asking his lawyers to erase an e-mail about oil-rig contract that mentioned BTG. Odebrecht has denied doing so.)

Solar  & Related Update.

 With events happening fast in the development of solar power and graphene, I’ve added this new section. Updates as they get reported. Is converting sunlight to usable cheap AC or DC energy mankind’s future from the 21st century onwards? DC? A quantum computer next?

Scientists see the light on microsupercapacitors

Mike Williams – December 3, 2015

Rice University’s laser-induced graphene makes simple, powerful energy storage possible

Rice University researchers who pioneered the development of laser-induced graphene have configured their discovery into flexible, solid-state microsupercapacitors that rival the best available for energy storage and delivery.

The devices developed in the lab of Rice chemist James Tour are geared toward electronics and apparel.
They are the subject of a new paper in the journal Advanced Materials.

Microsupercapacitors are not batteries, but inch closer to them as the technology improves. Traditional capacitors store energy and release it quickly (as in a camera flash), unlike common lithium-ion batteries that take a long time to charge and release their energy as needed.
Rice’s microsupercapacitors charge 50 times faster than batteries, discharge more slowly than traditional capacitors and match commercial supercapacitors for both the amount of energy stored and power delivered.
The devices are manufactured by burning electrode patterns with a commercial laser into plastic sheets in room-temperature air, eliminating the complex fabrication conditions that have limited the widespread application of microsupercapacitors. The researchers see a path toward cost-effective, roll-to-roll manufacturing.
“It’s a pain in the neck to build microsupercapacitors now,” Tour said. “They require a lot of lithographic steps. But these we can make in minutes: We burn the patterns, add electrolyte and cover them.”
Their capacitance of 934 microfarads per square centimeter and energy density of 3.2 milliwatts per cubic centimeter rival commercial lithium thin-film batteries, with a power density two orders of magnitude higher than batteries, the researchers claimed. The devices displayed long life and mechanical stability when repeatedly bent 10,000 times.
--- Tour is convinced the day is coming when supercapacitors replace batteries entirely, as energy storage systems will charge in minutes rather than hours. “We’re not quite there yet, but we’re getting closer all the time,” he said. “In the interim, they’re able to supplement batteries with high power. What we have now is as good as some commercial supercapacitors. And they’re just plastic.”

The monthly Coppock Indicators finished November

DJIA: +25 Down. NASDAQ: +121 Down. SP500: +45 Down. 

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