It doesn’t appear as if the OPEC decision went as the oil ministers might have hoped. Agreeing to a nine-month extension, more than the usual six months, it was still less than the whispered year that had been rumored and seemingly supported as late as yesterday. Still, Saudi Energy Minister Khalid al-Falih was encouraged. We found out that 9 months [...]
Problems aren’t supposed to be always intractable, are they? It has gone on so long that maybe long ago memories of minor adjustments are a bit fuzzy, but seemingly no matter what over the last decade every that issue arises and is met by the usual, standard efforts, is instead of being solved by them becomes another brick in the [...]
Wholesale sales were up 8.3% in March 2017 unadjusted year-over-year. Like other accounts, however, the seasonally adjusted series was not impressed. On an adjusted basis, sales were flat month-over-month, just $50 million more in March than February. It isn’t clear what the problem might be, as the only calendar aberration is Easter that fell in March 2016 but not March [...]
The economic reports since the last economic update were generally less than expected and disappointing. The weak growth of the last few years had been supported by autos and housing while energy has been a wildcard. When oil prices fell, starting in mid-2014 and bottoming in early 2016, economic growth suffered as the shale industry retrenched. I said during that [...]
Back when the WTI curve was at its steepest contango, who was it that was buying up all that oil? A sheer vertical curve is an invitation to almost free money, very much like other curves everywhere else during the “rising dollar.” You could simultaneously buy crude at spot and sell it for delivery years ahead using a futures contract, [...]
Wholesale sales rose 5.3% in February 2017 year-over-year after jumping by more than 12% in January on oil effects. Like calculated inflation rates, wholesale sales are for now marginally determined by energy price comparisons as well as calendar effects. February 2017 had one fewer day than February 2016, which according to the Census Bureau’s seasonal adjustments played some significant role [...]
It is understandable why everyone is right now fixated on Washington. The repeal, or not, of Obamacare is, to paraphrase former Vice President Biden, a big deal. In terms of market expectations, it is difficult to discern by how much. That was to be, after all, but one step of several reductions to the administrative burden on the economy. Maybe [...]
The last time oil inventory grew at anywhere close to this pace was during each of the last two selloffs, the first in late 2014/early 2015 and the second following about a year after. Those events were relatively easy to explain in terms of both price and fundamentals, though the mainstream managed to screw it up anyway (“supply glut”). By [...]
There has always been something like Newton’s third law observed in the business cycles of the US and other developed economies. In what is, or was, essentially symmetry, there had been until 2008 considerable correlation between the size, scope, and speed of any recovery and its antecedent downturn, or even slowdown. The relationship was so striking that it moved Milton [...]
Something had to give one way or the other. With all the oil traders piled onto the long side, either demand had to seriously pick up (or plausibly appear ready to do so) or the weak hands would start to capitulate. But as WTI has pulled back from $54 to around so far $48, the futures market remains nearly as [...]
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