Baltic Dry Index. 2312 -19 Brent
Crude 66.24 Spot Gold 1504
Never ending Brexit now October 31, maybe. 45 days away.
Trump’s Nuclear China Tariffs Now In Effect.
USA v EU trade war postponed to November, maybe.
It is hard to imagine a more stupid or more dangerous way of
making decisions than by putting those decisions in the hands of people who pay
no price for being wrong.
Thomas Sowell
The big story today, and likely
all week, is the oil drone attack in Saudi Arabia, that’s knocked out roughly
half of Saudi Arabia’s daily oil production. Initially the Saudis said that
they would get full production back on Monday, now its supposed to be about one
third of lost production, with another assessment due later today.
Oil prices surged in Asian
trading, but later fell back as traders recognised that, for now, with
declining industrial activity and ample short term inventories, any supply
shock will come down to how long the Saudi disruption lasts, does whoever did
it have the ability to make repeat attacks, and will President Trump escalate
the situation into a cross Persian Gulf
all out war on oil infrastructure.
While that’s not in anyone’s
interest, with the unpredictable and increasingly erratic President Trump
facing a difficult re-election campaign next year, it’s anyone’s guess as to whether
his reaction is to escalate or de-escalate the potential for a cross Gulf oil
war.
For now, oil traders are
betting on de-escalation, since escalation would generate a 1973 style oil
shock, triggering a new global recession and blowing up way over-priced stock markets
from America to Asia. We can only hope they are betting right.
Oil soars after Saudi facility attacks, weak China data hits shares
September 16,
2019 / 12:38 AM
SYDNEY (Reuters) - (Reuters) - Oil surged to four-month highs on Monday
after weekend attacks on crude facilities in Saudi Arabia sparked supply fears,
while shares in Asia extended losses as bleak economic data from China sapped
investors’ risk appetite.
Crude futures LCOc1CLc1 on both sides of the Atlantic hit their highest
since May, but came off their peaks after U.S. President Donald Trump
authorized the use of the country’s emergency stockpile to ensure stable
supply.
Trump also said the United States was “locked and loaded” for a
potential response to the strikes on the Saudi facilities, which shut 5% of world
production, after a senior official in his administration said Iran was to
blame.
That inflamed fears about Middle East tensions and worsening relations
between Iran and the United States, powering safe-haven assets, with gold up 1%
to $1,503.4 per ounce.
“The bigger issue is what premium markets will build in to reflect the
risk of further attacks,” said Kerry Craig, Global Market Strategist, J.P.
Morgan Asset Management.
“In the very near-term, we may also see a pick-up in safe-havens,” he
added.
---- MSCI’s broadest index of Asia-Pacific shares outside Japan slipped 0.36% after data showed China’s industrial production growth skidding to its weakest pace in 17-1/2 years in August.
Painting a dour picture of the world’s second-biggest economy, China’s
statistics bureau said the country faces increasing downward pressure from
external uncertainties.
China’s blue-chip index eased 0.2% while Hong Kong’s Hang Seng index
.HSI faltered about 1%.
Liquidity was relatively thin with Japanese markets shut for a public
holiday.
More
U.S. shale seen unlikely to quickly replace barrels lost in attack on Saudi facilities
September 15,
2019 / 10:51 PM
HOUSTON (Reuters) - U.S. shale producers have added millions of barrels
to global crude supply in recent years, but that does not mean they can quickly
replace barrels lost from weekend attacks on Saudi Aramco facilities, energy
experts said on Sunday.
Shale producers this year have been cutting budgets and workers and
trimming production goals after years of heavy spending. They remain under intense
pressure from investors to restrain spending and return money to shareholders
through buybacks and dividends rather than expand drilling.
Shale is a short-cycle oil supply - one able to add or reduce production
relatively quickly. Producers will see increased demand, especially from Asian
buyers. But producers need 90 to 180 days to drill, complete and bring new
production online.
There are about 1,000 Permian wells that have been drilled but not
completed or hooked up to pipelines, said Bernadette Johnson, vice president of
market intelligence at consultants Enverus.
Shale “cannot simply open up the spigot,” she said, adding: “The
infrastructure simply isn’t there yet to get it to the coast.”
More
Saudi's full oil supply could take weeks to resume - source
September 15,
2019 / 9:05 AM
DUBAI (Reuters) - Saudi Arabia’s return to its full oil supply capacity
after Saturday’s attacks on Aramco oil plants could take “weeks not days”, a
source close to the matter told Reuters on Sunday.
The attacks in Abqaiq and Khurais knocked down some 5.7 million barrels
per day (bpd) of the kingdom’s oil production and Saudi officials have not
given a timeline for restoring full supply.
Trump: 'Locked and loaded' against 'culprit' that hit Saudis' oil fields
Sept. 15, 2019 /
9:55 AM
Sept. 15 (UPI) -- One day after 10 drone attacks knocked out half of Saudi Arabia's
oil output, U.S. President Donald
Trump said Sunday night they "believe that we know the culprit, are
locked and loaded" with a response.In a Twitter post, Trump didn't name who was responsible for disrupting 5 percent of daily global oil supply though his U.S. Secretary of State, Mike Pompeo, on Saturday alleged Iran was behind the attacks, which have already resulted in a double-digit spike in crude oil and gas futures.
"There is reason to believe that we know the culprit, are locked and loaded depending on verification, but are waiting to hear from the Kingdom as to who they believe was the cause of this attack, and under what terms we would proceed!" Trump posted on Twitter on Sunday night.
Yemen's Houthi rebels, who have received material support from Iran, have claimed responsibility for the attacks, which took place around 4 a.m. local time Saturday. They have been engaged in a bloody war with Saudi Arabia since Riyadh launched an offensive in Yemen in 2015.
Iran Foreign Minister Javad Zarif on Sunday refuted the allegations. "Having failed at 'max pressure', @SecPompeo's turning to 'max deceit'," Zarif posted on Twitter. He was referring to the Trump administration's "maximum pressure" policy of sanctions on Iran.
"Blaming Iran won't end disaster. Accepting our April '15 proposal to end war & begin talks may," Zarif added.
Iran's Foreign Ministry spokesman Abbas Mousavi said earlier that "such useless accusations ... are meaningless and not comprehensible and are pointless."
More
Saudi Oil Attack Is the Big One
The technological sophistication and audacity of Saturday’s attack will linger over the energy market
Updated Sept. 15, 2019 7:28 am ET
Saturday’s
attack on a critical Saudi oil facility will almost certainly rock the
world energy market in the short term, but it also carries disturbing long-term
implications.Ever since the dual 1970s oil crises, energy security officials have fretted about a deliberate strike on one of the critical choke points of energy production and transport. Sea lanes such as the Strait of Hormuz usually feature in such speculation. The facility in question at Abqaiq is perhaps more critical and vulnerable. The Wall Street Journal reported that 5.7 million barrels a day of output, or some 5% of world supply, had been taken offline as a result.
----Deliberate attacks by actual military forces have been far rarer, with the exception of the 1980s “Tanker War” involving Iraq, Iran and the vessels of other regional producers such as Kuwait. When Saddam Hussein’s Iraqi forces invaded Kuwait in 1990, removing its production from the market and putting Saudi Arabia’s massive crude output under threat, prices more than doubled over two months.
Yet Saturday’s attack could be more significant than that. Technology from drones to cyberattacks are available to groups like the Houthis, possibly with support from Saudi Arabia’s regional rival Iran.
That major energy producer, facing sanctions but still shipping some oil, has both a political and financial incentive to weaken Saudi Arabia. The fact that the actions ostensibly were taken by a nonstate actor, though, limits the response that the U.S. or Saudi Arabia can take. Attempting to further punish Iran is a double-edged sword, given that pinching its main source of revenue, also oil, would further inflame prices.
While the redundancies in Saudi oil infrastructure mean that output may be restored as soon as Monday, the attack could build in a premium to oil prices that has long been absent due to complacency. Indeed, traders may now need to factor in new risks that threaten to take not hundreds of thousands but millions of barrels off the market at a time. U.S. shale production may have upended the world energy market with nimble output, but the market’s reaction time is several months, not days or weeks, and nowhere near enough to replace several million barrels.
After
the smoke clears and markets calm down, the technological sophistication and
audacity of Saturday’s attack will linger over the energy market.
“The supreme art of war is to subdue the
enemy without fighting.”
The
Art of War
Crooks and Scoundrels Corner.
The bent, the seriously bent, and the totally doubled
over.
Today, General Motors. While it’s not quite “as goes GM, so goes America”
anymore, a long strike at GM is still very bad news for the US and global
economy.
Nearly 50,000 GM auto workers go on strike for first time since 2007
Published: Sept 16,
2019 12:10 a.m. ET
DETROIT — More than 49,000 members of the United Auto
Workers walked off General Motors factory floors or set up picket lines early
Monday as contract talks with the company deteriorated into a strike.Workers shut down 33 manufacturing plants in nine states across the U.S., as well as 22 parts distribution warehouses.
It wasn’t clear how long the walkout would last, with the union saying GM has budged little in months of talks while GM GM, -0.54% said it made substantial offers including higher wages and factory investments.
It’s the first national strike by the union since a two-day walkout in 2007 that had little impact on the company.
UAW Vice President Terry Dittes, the union’s top GM negotiator, said a strike is the union’s last resort but is needed because both sides are far apart in negotiating a new four-year contract. The union, he said Saturday, does not take a strike lightly.
“We clearly understand the hardship that it may cause,” he said. “We are standing up for fair wages, we are standing up for affordable quality health care, we are standing up for our share of the profits.”
GM, however, said it offered pay raises and $7 billion worth of U.S. factory investments resulting in 5,400 new positions, a minority of which would be filled by existing employees. GM would not give a precise number. The company also said it offered higher profit sharing, “nationally leading” health benefits and an $8,000 payment to each worker upon ratification.
Because public statements from both sides conflict, it’s hard to tell how long the strike will last, said Kristin Dziczek, vice president of labor and industry at the Center for Automotive Research, an industry think tank. The length “depends on how far apart they really are and where the lines in the sand are drawn,” she said.
Talks were scheduled to resume at 10 a.m. EDT on Monday.
More
When a management with a reputation for brilliance tackles a
business with a reputation for bad economics, it is the reputation of the
business that remains intact.
Warren Buffett
Technology Update.
With events happening
fast in the development of solar power and graphene, I’ve added this section.
Updates as they get reported. Is converting sunlight to usable cheap AC or DC
energy mankind’s future from the 21st century onwards?
Conductivity at the edges of graphene bilayers
Date:
September 11, 2019
Source:
Springer
Summary:
For nanoribbons of bilayer graphene, whose edge atoms are arranged in zigzag
patterns, the bands of electron energies which are allowed and forbidden are
significantly different to those found in monolayer graphene. This causes
variations in the ways in which bilayers conduct electricity.
The conductivity of dual layers of graphene greatly depends on the
states of carbon atoms at their edges; a property which could have important
implications for information transmissions on quantum scales.
Made from 2D sheets of carbon atoms arranged in honeycomb lattices,
graphene displays a wide array of properties regarding the conduction of heat
and electricity.
When two layers of graphene are stacked on top of each other to form a
'bilayer', these properties can become even more interesting. At the edges of
these bilayers, for example, atoms can sometimes exist in an exotic state of
matter referred to as the 'quantum spin Hall' (QSH) state, depending on the
nature of the interaction between their spins and their motions, referred to as
their 'spin-orbit coupling' (SOC). While the QSH state is allowed for
'intrinsic' SOC, it is destroyed by 'Rashba' SOC. In an article recently
published in EPJ B, Priyanka Sinha and Saurabh Basu from the Indian
Institute of Technology Guwahati showed that these two types of SOC are
responsible for variations in the ways in which graphene bilayers conduct
electricity.
For nanoribbons of bilayer graphene, whose edge atoms are arranged in
zigzag patterns, the authors showed that the bands of electron energies which
are allowed and forbidden are significantly different to those found in
monolayer graphene. For intrinsic SOC, the QSH state even caused atoms in the
zigzag to have a gap between these bands, which disappeared in odd atoms.
However, this asymmetry disappeared for Rashba SOC, which changed the
relationship between the energy required to add an electron to the bilayer, and
its conductivity.
This conduction sensitivity to the states of edge atoms shows that
graphene bilayers could be particularly useful for spintronics applications.
This field studies how quantum spins can be used to efficiently transmit
information, which is of particular interest to researchers in fields like
quantum computing. Sinha and Basu also found that the characteristic SOC
behaviours they uncovered persisted with or without voltage across the
bilayers, which dispelled theories that this aspect could prevent the QSH state
from forming. Their work furthers our knowledge of graphene bilayers,
potentially opening up new areas of research into their intriguing properties.
Years ago, I noticed one thing about economics, and that is that
economists didn't get anything right.
Nassim Nicholas Taleb
The monthly Coppock Indicators finished August
DJIA: 26,403 +52 Down. NASDAQ: 7,963 +59 Down.
SP500: 2,926 +53 unchanged.
An inconclusive month, but
all three shows signs of weakening.
No comments:
Post a Comment