National Farmers Union condemns new tariffs: ‘Trump is making things worse’

Not Anymore

The National Farmers Union (NFU) on Friday hammered President Trump over his escalating trade war with China, saying he is “making things worse.” The statement came the same day as Washington and Beijing boosted tariffs in the widening dispute, with China targeting cars and farm products, further harming farmers who have already borne the brunt of the Chinese penalties. “It’s no surprise that China is slapping even more tariffs on American products. Every time Trump escalates his trade war, China calls his bluff – and why would we expect any differently this time around? And it’s no surprise that farmers are again the target,” NFU President Roger Johnson said in a statement. “[I]nstead of looking to solve existing problems in our agricultural sector, this administration has just created new ones. Between burning bridges with all of our biggest trading partners and undermining our domestic biofuels industry, President Trump is making things worse, not better.” The latest escalation in the year-plus trade war took place Friday morning, when Beijing announced new tariffs on $75 billion worth of U.S. goods, saying the move was in response to measures from the U.S. Trump fired back hours later, announcing that a 10 percent tariff on $300 billion in Chinese goods set to go into effect on Sept. 1 would increase to 15 percent, and that an additional $250 billion being tariffed at 25 percent will be hit with a 30 percent tariff starting Oct. 1. The president also urged companies to seek “an alternative” to doing business in China.  The latest salvo in the trade war rattled markets, with the Dow Jones industrial average dropping 623 points and the Nasdaq composite and S&P 500 ending Friday down 3 percent and 2.6 percent, respectively. Trump blasted China’s moves Friday and announced the details of the latest U.S. response after the markets closed. Beijing has targeted agricultural products in many of its tariffs, appearing to try to take aim at one of Trump’s core bases of political support. Trump has appeared unfazed by farmers’ concerns, arguing that in the end they will be “the big winners.”

However, the president appeared to acknowledge the trade war may have short-term pitfalls of the economy, telling reporters that he had to intervene to rectify the U.S.’s trade relationship despite such concerns.  “Whether it’s good for our country or bad for our country, short term, it had to be done,” Trump said Tuesday. “Someone had to take on what China was doing to the United States economically.”

Oil spills into U.S.-China trade war, prices slump

NEW YORK (Reuters) – China said on Friday it would impose tariffs on U.S. crude oil imports for the first time, sending prices down nearly 4% to two-week lows as the escalating bilateral trade war fed worries over a slowdown in global oil demand. Pumpjacks are seen during sunset at the Daqing oil field in Heilongjiang province, China August 22, 2019. REUTERS/Stringer Beijing said crude would be among the U.S. products hit by tariffs of 5% as of Sept. 1. U.S. President Donald Trump responded later in the day saying starting on Oct. 1, the 25-percent tariffs on $250 billion worth of Chinese goods will rise to 30%. Tariffs on remaining $300 billion due to begin on Sept. 1 will now be set at 15%, versus 10%. The trade war between the world’s two largest economies has dragged on for more than a year and roiled financial markets. Though Chinese and U.S. trade negotiators held discussions as recently as this week, neither side appears ready to make a significant compromise and there have been no signs of a truce in the near term. China, one of the world’s biggest crude importers, has sharply lowered U.S. shipments from a record high hit last year. With the latest tariffs, purchases are likely to grind to a halt, traders and analysts said. A shale boom has helped the United States become the world’s largest oil producer, ahead of Saudi Arabia and Russia, and exports have surged to a record above 3 million barrels per day (bpd) after a ban was lifted in late 2015. “The tit-for-tat trade war now has the oil market officially caught in the crossfire, this time with China striking the heart of Trump’s traditional base of support of U.S. oil producers,” said Michael Tran, director of energy strategy at RBC Capital Markets in New York. “With China being the world’s foremost crude import growth region, U.S. producers need China, not the other way around,” he said. “The U.S. will have to find alternative buyers for their crude, which will be a challenge given the weakening global demand backdrop.” U.S. shipments to China have made up about 6% of total U.S. crude exports on average so far this year, according to data from the Department of Energy and the Census Bureau. “This escalation of the U.S.-China trade war is another step in the wrong direction, the consequences of which will be felt by American businesses and families,” Kyle Isakower, vice president of regulatory and economic policy at the American Petroleum Institute (API), the top lobbying group for U.S. oil and gas drilling, said in a statement. “We urge the Administration to quickly come to a trade agreement with China that would lift all tariffs under Section 301, including the damaging retaliatory tariffs on American energy exports.” U.S. West Texas Intermediate (WTI) crude futures CLc1 slumped as much as 3.8% to $53.24 a barrel on Friday, the lowest since Aug. 9, before ending the session at $54.17. The rising trade war is likely to weigh on U.S. crude more than international benchmark Brent LCOc1, market sources said. “Chinese buyers will (now) be looking to purchase Brent and Dubai-based crude oil and I would expect that to result in a widening of the Brent-to-WTI spread,” said Andy Lipow, president of Lipow Oil Associates in Houston. “In essence what you’ve done is created new demand for Brent-based crude oil at the expense of U.S.-origin crude.” U.S. crude exports to Asia so far in August indicate weaker flows around 892,000 bpd, down by 360,000 bpd from last month, according to market intelligence firm Kpler. The drop was driven by a decrease in shipments to South Korea and China, down by 114,000 bpd and 52,000 bpd respectively month-over-month in August, the firm’s vessel-tracking data showed.   “In a world where margins are thin, a 5% tax is significant,” said Jim Burkhard, head of oil market analysis at IHS Markit in Washington.

Trump takes aim at media after ‘hereby’ ordering US businesses out of China

President Trump defended his declaration on Friday that American companies were “hereby ordered” to find alternatives to manufacturing in China, claiming that the 1977 International Emergency Economic Powers Act gave him the power to make such a pronouncement. Trump took aim at the press for questioning his authority to order businesses out of China, tweetingFor all of the Fake News Reporters that don’t have a clue as to what the law is relative to Presidential powers, China, etc., try looking at the Emergency Economic Powers Act of 1977. Case closed!”

Trump had previously cited the 1977 Act, which gives the president the power to regulate commerce during exceptional international crises, earlier Friday before departing for the Group of Seven (G-7) summit in France.  In a string of tweets Friday morning, the president said he was ordering U.S. companies to “immediately start looking for an alternative to China,” beginning with making their products in the United States “The vast amounts of money made and stolen by China from the United States, year after year, for decades, will and must STOP. Our great American companies are hereby ordered to immediately start looking for an alternative to China, including bringing … your companies HOME and making your products in the USA,” Trump tweeted. His language drew a swift reaction on social media from those who mocked his formal decree. Prominent conservative lawyer George Conway tweeted Friday that Trump should be sent to Walter Reed Medical Center and his Cabinet should declare him unfit to be president following his declaration.

“I hereby order the White House staff to take @realDonaldTrump to Walter Reed, and to convene the cabinet under Section 4 of the Twenty-fifth Amendment,” he wrote, adding the trending hashtag “Iherebyorder.” The husband of White House counselor Kellyanne Conway is a frequent critic of the president. A number of news outlets, in turn, published articles employing Trump’s formal language to question whether he had the authority to make such a command.

Claude Barfield, an expert in international trade policy at the American Enterprise Institute (AEI), told The Hill that Trump doesn’t have any authorities to direct U.S. companies to move their businesses to the United States. He called the tweets a clear example of Trump “popping off” and predicted his advisers would look to do damage control, especially if his remarks negatively impact the stock market. Jennifer Hillman, a Georgetown University law professor and trade expert at the Council on Foreign Relations, told The Washington Post that Trump does not have the power to “duly order” companies out of China, but he does have the authority under the International Emergency Economic Powers Act to prevent future transfers of funds to Beijing. Hillman added that Trump can only make such a move “if he has first made a lawful declaration that a national emergency exists,” noting that Congress could ultimately end the declaration.  Reuters reported that, once Trump has declared such an emergency, the Act gives Trump broad powers to stop the activities of individual companies or whole economic sectors. The outlet noted that past presidents have invoked the law to freeze foreign governments’ assets. Still, some experts cautioned that doing so could trigger legal challenges in U.S. courts and risk unintended harm to the economy. Trump is facing mounting pressure over his mounting trade war with China, which economists have blamed in part for contributing to the weakening of the global economy and for causing uncertainty that has left the U.S. stock market volatile.  Nick Bit: when they come to your house with an assault team and arranged to have you drugged ahead of time,  no matter how many guns you have you will lose. They will confiscate EVERYTHING and torture you till you give up your passwords, bitcoin codes and reveal where your cash stash and gold are located…. and they will use the  Emergency Economic Powers Act of 1977 that the “Chosen One will use to declare an emergency! And then you will be very very sorry you elected this lunatic president and defended him as he demonstrates more and more every day he has no respect for the law and trashed the Constitution as he plots to become dictator

Japan warns North Korea now has miniaturized nukes

 small enough to fit on its ballistic missiles and is a ‘serious and imminent threat’
See that silver ball…. That is the stuff nightmares are made of. Pictured is the plutonium ball, the wires fire off in precise sequence the shaped charges that implode the Enriched Uranium and plutonium to fire off the weapon. the entire system is less then 100 kilos which means it easily fits onto the “OBJECTS” Kim Yon Num Chucks keeps popping off that his good friend the self proclaimed the “Chosen One” is not concerned about
  • Tokyo defence chiefs warn about North Korea’s capabilities in a new white paper
  • Japan’s assessment of Pyongyang’s nuclear tech is an upgrade from last year
  • South Korea and the U.S. also believe the North has been miniaturising warheads

North Korea has miniaturised nuclear warheads and made them small enough to fit on ballistic missiles, Japan believes.  Tokyo defence chiefs warn in a new white paper that North Korea’s military activities pose a ‘serious and imminent threat’.  In last year’s report Japan said it was ‘possible’ that North Korea had achieved miniaturisation, but Tokyo now appears to have upgraded its assessment, according to Japanese newspaper Yomiuri.  Japan is seen as a ‘primary target’ of nearby North Korea’s weapons capabilities and fears that Pyongyang’s nuclear programme is ‘growing unabated’, experts say.  The latest findings come alongside newly-released pictures which suggest a North Korean plant may be leaking hazardous waste into a nearby river.

North Korea has miniaturised nuclear warheads and made them small enough to fit on ballistic missiles, Japan believes (pictured, a recent North Korean weapons test)

North Korea has miniaturised nuclear warheads and made them small enough to fit on ballistic missiles, Japan believes (pictured, a recent North Korean weapons test) The Japanese findings come alongside newly-released photos which suggest that North Korea’s nuclear programme is leaking toxic waste into a river. US-based researcher Jacob Bogle, who has created a comprehensive map of the country from satellite images, made the alarming discovery while looking at pictures of Pyongsan uranium mine dating back to 2003.

Waste water will contain radioactive radium which can cause cancer, it is feared


Waste water will contain radioactive radium which can cause cancer, it is feared Mr Bogle noticed that a waste pipe built to carry toxic water from the facility – which processes coal into uranium – to a nearby reservoir appears to be leaking into a river.  That tributary runs into the Ryesong River, which in turn empties into the Yellow Sea – an area between mainland China and the Korean Peninsula around which some 600 million people live. The waste water will contain radioactive radium which can cause cancer, Mr Bogle says, along with various heavy metals which cause brain defects.   ”Each of the images shows an ever-growing pile of leaked material on either end of the pipe that takes waste material from the plant to an unlined reservoir,’ he said.  ‘Some of the images also show fluids being actively spilled directly into the river.’

The Japanese report highlights the lack of progress on denuclearisation talks, said Vipin Narang, a nuclear affairs expert at MIT. 

‘It is Japan that is most threatened, and probably the primary target of such a capability,’ he said. ‘So openly acknowledging it underscores Tokyo’s acute fears that North Korea’s nuclear program continues to grow unabated with no foreseeable plan to slow its growth, let alone eliminate them.’ The report is due to be approved at a Cabinet meeting in Japan in mid-September.   In last year’s Defence White Paper, Japan said ‘miniaturising a nuclear weapon small enough to be mounted on a ballistic missile requires a considerably high degree of technological capacity’.  However, they said ‘it is possible that North Korea has achieved the miniaturisation of nuclear weapons and has developed nuclear warheads.’   Japan’s latest findings are similar to those of its allies, America and South Korea.  The South said in a 2018 defence paper that North Korea’s ability to miniaturise nuclear weapons ‘appears to have reached a considerable level.’ American officials have concluded for years that North Korea had likely produced miniaturised nuclear warheads.   South Korean intelligence bosses believe that the North continued to miniaturise nuclear warheads even after the Singapore summit between Trump and Kim in June 2018, according to Korean media. At that time, North Korea committed ‘to work toward complete denuclearisation of the Korean peninsula’ and destroyed some tunnels and buildings at its Punggye-ri nuclear test site.  However, a second Trump-Kim meeting in February collapsed without an agreement, and North Korea has since resumed missile tests amid angry exchanges of rhetoric between the two countries.  Nick Bit: no need to worry because YOUR “Chose” One President Trump has declared mass murder Kim you Num Chucks his good friend!

Iran Sends Another Oil Tanker to Syria in Defiance of Sanctions

A picture taken on March 12, 2017, shows an Iranian tanker and a South Korean (R) tanker docking at the platform of the oil facility in the Khark Island, on the shore of the Gulf. / AFP PHOTO / ATTA KENARE (Photo credit should read ATTA KENARE/AFP/Getty Images)

Western intelligence sources told Fox News that Iran has dispatched another oil tanker to Syria in defiance of U.S. sanctions. Meanwhile, the first sanctions-busting ship was leased to the Iranian Islamic Revolutionary Guard Corps (IRGC) in another apparent gesture of defiance to the United States.

The new tanker headed for Syria, the Bonita Queen, is much smaller than the supertanker currently named Adrian Darya 1, intercepted en route to Syria on July 4 and recently released from impound by the government of Gibraltar. According to Fox News, the Bonita Queen plans to illegally transfer oil at sea to a  pair of sanctioned Syrian vessels:

The Bonita Queen loaded 600,000 barrels of crude oil on Aug. 2 near the Iranian coast at Kharg Island.

Shortly after the tanker was de-flagged by the country of St. Kitts and Nevis, fearing retaliatory U.S. sanctions.

The vessel is now headed to Dubai, where it will refuel before beginning a monthslong journey around the horn of Africa, through the Mediterranean and to the shores of Syria.

Sources say the ship plans to meet two Syrian owned oil tankers in the Mediterranean later this year and conduct a ship-to-ship transfer of the crude oil.

This transfer would be an additional violation of American sanctions since the U.S. Treasury Department already sanctioned the two Syrian tankers in March of this year. The tankers, named the Kader and the Jasmine, are both scheduled to meet the Bonita Queen to assist with the transfer.

The owner of the Kader and Jasmine is a man named Mohammed al-Qatirji who was sanctioned by the U.S. in 2018 for profiting from the savage Syrian civil war. The U.S. Treasury Department said he had ties to the murderous regime of dictator Bashar Assad and assisted with “transporting weapons and ammunition under the pretext of importing and exporting food items.” His company also played a key role in “providing supplies to ISIS-controlled areas, including oil and other commodities.” Al-Qatirji’s brother, who evidently has some involvement with the oil transfer, was sanctioned by the European Union in January. Gibraltar refused to hold the other Iranian oil tanker, the Adrian Darya 1, at the request of the U.S. government because it was accused of violating American sanctions but not those of the European Union. If the intelligence reports given to Fox News were accurate, the voyage of the Bonita Queen will violate both American and European laws. The Adrian Darya 1 is currently headed for Greece and is expected to arrive early next week. Iranian state media announced on Wedensday that the ship has been leased to the IRGC, a contention the U.S. made to Gibraltar authorities when asking for the ship to be kept in custody. American officials contended the IRGC used a network of front companies to manage the ship, but Iran’s ILNA news agency casually referred to it as “a Korean-made oil tanker owned by Russia which is currently leased to the Revolutionary Guards” during an interview with IRGC naval commander Gen. Alireza Tangsiri. Tangsiri defiantly declared the vessel “needs no escort” to protect it from seizure by the United States. Iran on Monday warned the U.S. will face “heavy consequences” if it takes action against the Adrian Darya 1. The supertanker was named Grace 1 when it was seized by British Royal Marines in July, but its name was changed to Adrian Darya 1 when it was released by Gibraltar. The National explained on Tuesday that the name change was not one of the many techniques Iran uses to conduct illegal business – it was chosen as another gesture of defiance to the West.  The name translates to “Adrian Sea,” which was meant as a reference to Hadrian’s Wall, a barrier built by the Romans to keep the British at bay in the 2nd Century. In other words, Iran renamed the tanker to honor “a wall that protected Iran’s interests against Britain” in celebration of Iran’s “victory over the West” by getting the ship released from impound, as Iranian media put it. Gibraltar officials claim they were given assurances by Iran that the Adrian Darya 1 would not unload its oil in Syria. According to Greek officials, it won’t be unloading that oil in Greece, either. Greek Deputy Foreign Minister Miltiadis Varvitsiotis said on Monday the supertanker is too big to enter any Greek port, but it could conceivably anchor offshore, at which point Athens would have to decide whether to allow it to purchase maintenance services.

U.S. trade group says ‘unrealistic’ for American retailers to exit China

WASHINGTON (Reuters) – The U.S. National Retail Federation (NRF) said on Friday it is “unrealistic” for American retailers to move out of China, the world’s second-largest economy, as 95% of the world’s consumers live outside the United States. “Our presence in China allows us to reach Chinese customers and develop overseas markets,” NRF Senior Vice President for Government Relations David French said in a statement. “This, in turn, allows us to grow and expand opportunities for American workers, businesses and consumers,” he said. French said U.S. retailers have been diversifying their supply chains for years but finding alternate supply bases is a “costly and lengthy process that can take years.”

Earlier, President Donald Trump said he has ordered American companies to exit China after Beijing unveiled retaliatory tariffs on $75 billion in U.S. goods.

Nick Bit: remember Trump declared himself the CHOSEN ONE.If you have any brains that should scare the shit out of you!

China places first-time tariff on U.S. crude

NEW YORK (Bloomberg) – Crude plunged to a two-week low after China announced tariffs on U.S. crude oil for the first time as the trade war between the world’s biggest economies escalated. Futures fell as much as 3.5% in New York on Friday, erasing this week’s gain. China will impose additional levies on $75 billion of U.S. goods, with tariffs of 5% on American crude. China was the ninth-largest buyer of U.S. crude during the first five months of this year. Last year, Beijing removed crude from a list of goods targeted for tariffs, signaling the importance of American oil in the global market. The decision to include it now shows how the trade spat has intensified, forcing it to use duties on the strategic commodity as ammunition. “It’s a direct strike on U.S. crude exports, which is why you are seeing this sort of out-sized reaction,” said John Kilduff, partner at New York-based Again Capital LLC. “China had been an aggressive U.S. crude buyer.” China’s announcement comes as leaders from the Group of Seven nations prepare to meet in France and central bankers gather in Jackson Hole, Wyoming, to discuss issues including fears of a global economic slowdown. New York-traded crude futures have dropped more than 7% this month as the protracted trade dispute fanned fears about stunted demand. U.S. fuel stockpiles have also increased, aggravating concerns about a potential glut. West Texas Intermediate crude for October delivery declined $1.46 to $53.89/bbl at 9:46 a.m. on the New York Mercantile Exchange, after falling to as low as $53.40/bbl. Brent for October delivery dropped $1.01 to $58.91 on the ICE Futures Europe Exchange. Its premium to WTI for the same month traded at $5.02/bbl. The Chinese tariffs will take effect in stages between Sept. 1 and mid-December, according to the announcement from the Ministry of Commerce. The tariff on U.S. crude will begin next month. This mirrors the timetable the U.S. has laid out for 10% tariffs on nearly $300 billion of Chinese shipments. While the U.S. isn’t among the biggest crude suppliers to China, America’s shale boom has made it one of the top producers in the world along with Saudi Arabia and Russia. At a time of OPEC output cuts, sanctions that are strangling supplies from Iran and Venezuela, and rising geopolitical tensions in the Middle East, the import-dependent Asian nation needs reliable crude imports to sustain economic growth. “Escalating trade tension increases the risk of the world moving into recession,” said Giovanni Staunovo, an analyst at UBS Group AG in Zurich. “That could result in even lower oil demand next year, and an even more oversupplied oil market next year.” Nick Bit: The market has got it all wrong! As reported to you earlier the Chinese starting in July have stopped loading US crude. Think of oil supply as a great big lake. It makes little difference where the oil is sucked from. China has to buy oil. If it buys it from the US or Saudis it still coming put of the total oil supply. This is a great big nothing burger! Trump is out of control and the China trade war will cost him the election.

US crude oil stocks resume draw as refiner demand surges

US crude stocks fall 2.73 million barrels to 437.78 million barrels

Refinery utilization up 1.1 points at 95.9% of capacity

Products show surprise build as demand dips

New York — US crude oil inventories resumed a seasonal draw last week amid a surge in refinery demand and rising exports, US Energy Information Administration data showed Wednesday. Commercial crude stocks fell 2.73 million barrels to 437.78 million barrels in the week that ended August 16, according to the EIA’s weekly stocks report. The draw-down snapped two consecutive weeks of counter-seasonal builds and narrowed the nationwide supply overhang to 3.25% above the five-year average, from 3.5% the week prior. Strong refinery crude demand contributed to the draw. Net crude inputs were up 400,000 b/d on the week at 17.70 million b/d and nationwide refinery utilization was up 1.1 percentage points at 95.9% of capacity.

Midwest run rates were especially strong at 99.9% of capacity and regional net crude inputs were 9.6% above the five year average at 4.12 million b/d. US Gulf Coast utilization rate was up 1.1 percentage point at 97.1% of capacity, the strongest since early January. The crude draw-down was concentrated at Cushing, Oklahoma, the delivery point of the NYMEX crude contract. Stocks there were 2.49 million barrels lower last week to 42.34 million barrels, the lowest since mid-January. The Cushing draw comprised the bulk an overall Midwest inventory decline of 2.64 million barrels to 129.99 million barrels. USGC crude inventories, in contrast, were up 690,000 barrels at 225.15 million barrels last week, due in part to an uptick in crude output as well as the startup of new Permian Basin takeaway capacity. Notably, the USGC draw came despite a 120,000 b/d uptick in exports to 2.80 million b/d. Last week marked the start of flows on Plains All American’s 670,000 b/d Cactus II pipeline, which stretches from West Texas production areas to coastal export hubs. The line is the first of three new pipelines slated to launch this year, along with the 400,000 b/d EPIC interim crude line, which started this week, and the 900,000 b/d Gray Oak pipeline expected to start service later this year. Regional crude flows are likely to shift as the pipelines ramp up to nameplate capacity. Previously, Permian output slated for export mainly flowed north to Cushing, where it was then routed back south to USGC ports. The new capacity allows exporters to bypass Cushing entirely, keeping barrels in the USGC region until they are waterborne. In terms of the EIA inventory report, this would likely contribute to a sustained downward pressure on stocks at Cushing while supporting Gulf coast inventories. The de-bottlenecking of Permian production is also likely to contribute to increased marginal production in the basin as inland discounts fade. Last week the discount for WTI at Midland, Texas compared with Houston fell to about $1.70/b, in sharply from a July average of around $5/b, Platts data showed. While nationwide crude production was flat at 12.3 million b/d last week, according to EIA data, output in the Lower 48 edged up 100,000 b/d to 12 million b/d, an all-time high. Refined product stocks showed unexpected increases last week. Total US distillate stocks increased 2.61 million barrels to 138.12 million barrels, the EIA data showed, while gasoline inventories rose 310,000 barrels to 234.07 million barrels. Analysts had been expecting 200,000 barrel and 1.6 million barrel draw-downs in distillate and gasoline stocks, respectively, when surveyed Monday by Platts. While the builds were due in part to strong refinery runs, a 1.09 million b/d decline in total product demand to 20.99 million b/d contributed to rising inventories. Gasoline demand fell back 310,000 b/d to 9.63 million b/d and distillate demand was down 100,000 b/d at 3.76 million b/d, a five-week low. US Atlantic Coast gasoline stocks were higher for a third straight week, swelling 780,000 barrels to 62.37 million barrels. The build put regional inventories just 0.5% under the five-year average for this time of year, nearly eliminating a deficit that was as wide as 9.7% in early June.

‘No pay, we stay’: Kentucky miners block $1m coal shipment saying they will not budge until they get their final pay check

The shipment of coal is said to be worth in excess of $1 million. Blackjewel has promised the miners proceeds from its sale will go to them, but the miners have said they won't budge till they get their final pay check
Train cars loaded with coal sit on the tracks at a Blackjewel mining operation as the miners head into day 26 of their blockade of its shipment
  • It is day 26 of the blockade on the tracks near the Cloverlick No. 3 mine 
  • More than 300 miners were out of jobs after Blackjewel declared bankruptcy
  • It’s estimated the miners are each owed about $4,202.91 

Hundreds of Kentucky miners are blocking a $1 million shipment of coal from leaving a Harlan County mine until they receive their final pay checks.  More than 300 miners were unexpectedly sacked after their employer, two-year-old company, Blackjewel, declared bankruptcy and shut down its operations on July 1.  The company did so without filing the mandatory 60-day advance warning and without posting a bond – which is a requirement by Kentucky law – to cover payroll.  As a result the miners’ final paychecks bounced leaving many out of pocket. The New York Times reported lawyers representing the miners in bankruptcy proceedings estimated the employees were each owed about $4,202.91.  About a month after the company went under, a final load of coal with an estimated worth in excess of $1 million was due to be shipped out. The miners found their bargaining chip. A small tent city has been set up by the railroad in Harlan County with hundreds of miners and their supporters refusing to budge till their demands are met. The blockade of the valuable shipment began on the afternoon of July 29, with a handful of miners and their families, camped on the tracks near the Cloverlick No. 3 mine. Twenty-six days later the once-small blockade has grown into a small tent city.  The miners and their supporters at the railway camp are refusing to allow the shipment’s passage until they receive the wages they are due.   One of the miners, Chris Rowe, a spokesman for the group of miners, said they were angry and frustrated they had done all the working digging the coal, but were not paid. ‘We’re doing without money, food and everything else before our kids are starting back to school,’ he told CNN affiliate WYMT. ‘We can’t even get clothes or nothing else for them, so it was like a kick in the face.’

Such bankruptcies and layoffs have become common place in an industry which is said to be in decline, but its the first protest of its size in recent years.

The miners’ plea has not gone unheard, the Department of Labor intervened, asking the bankruptcy judge to block shipment of the coal and deeming it ‘hot goods. And the mining company Blackjewel has promised proceeds from the coal’s sale would go towards the miners. The company said it would leave the coal where it was until an agreement on the final payment could be made.  However, the protesters said they planned to keep up their blockade until they have their final pay check in hand. Nick Bit: I was wrong i found someone dumber then a farmer… COAL MINER. I seem to remember presidentie asshole was going to HA HA HA make coal great again…….. People actually believe that bullshit?  Sometimes in life its better to take your ass kicking and move on. These Trump loyalist have been setting in the rail yard for over a month waiting for a $4000 check. Shit get a job, start a business, learn coding at night off the internet instead of watching Netflicks stupidness. But no they spend their day with a bunch of other losers drinking beer talking shit feeling sorry for themselves!.  GUARANTEED they are collecting unemployment benefits, food stamps and welfare.

EIA: 2018 OPEC net export revenues highest since 2013, but likely to decline

WASHINGTON – The U.S. Energy Information Administration estimates that OPEC members earned almost $711 billion in net oil export revenues in 2018. The estimate is up 29% from 2017, but about 40% lower than the record high of almost $1,200 billion in 2012. The 2018 earnings increase is mainly a result of higher crude oil prices. The Brent spot price rose from an annual average of $54/bbl in 2017 to $71/bbl in 2018. However, EIA forecasts annual OPEC net oil export revenues will decline to $593 billion in 2019 and to $556 billion in 2020. Decreasing OPEC revenues are primarily a result of decreasing production among a number of OPEC producers. Short-Term Energy Outlook (STEO). EIA’s net oil export revenues estimate assumes that exports are sold at prevailing spot prices and adjusts the prices for benchmark crude oils forecast in STEO (Brent, West Texas Intermediate, and the average imported refiner crude oil acquisition cost) with historical price differentials among spot prices for the different OPEC crude oil types. For countries that export several different varieties of oil, EIA assumes that the proportion of total net oil exports represented by each variety is the same as the proportion of the total domestic production represented by that variety. For example, if Arab Medium represents 20% of total oil production in Saudi Arabia, the estimate assumes that Arab Medium also represents 20% of total net oil exports from Saudi Arabia. Although OPEC net export earnings include estimated Iranian revenues, they are not adjusted for possible price discounts that trade press reports indicated Iran may have offered its customers after the United States announced its withdrawal from the Joint Comprehensive Plan of Action in May 2018. The United States reinstated sanctions targeting Iranian oil exports in November 2018. Similarly, EIA does not adjust for Venezuelan crude oil exports to China or India for volumes that are sent for debt repayments to China and Russian energy company Rosneft, respectively, and thus do not generate cash revenue for Venezuela. If the $711 billion in net oil export revenues by all of OPEC is divided by total population of its member countries and adjusted for inflation, then per capita net oil export revenues across OPEC totaled $1,416 in 2018, up 26% from 2017. The increase in per capita revenues likely benefited member countries that rely heavily on oil sales to import goods, fund social programs, and otherwise support public services.

Source: U.S. Energy Information Administration

Source: U.S. Energy Information Administration

In addition to benefiting from higher prices, some OPEC member countries have increased export revenues by reducing domestic consumption and consequently exporting more. For example, Saudi Arabia has significantly reduced the amount of crude oil burned for power generation. Limiting crude oil burn allowed Saudi Arabia to export more crude oil and to maximize revenues. Others have been able to charge higher premiums based on the quality of their crude oil streams. As the global slate of crude oil has changed with more light crude oil production (with higher API gravity), OPEC members have benefited from a narrowing price discount for their heavy crude oils, which are typically priced lower than lighter crude oils because of quality differences. Smaller discounts for OPEC members’ heavier crude streams contributed to higher spot prices for the OPEC crude oil basket price, which incorporates spot prices for the major crude oil streams from all OPEC members.

Source: U.S. Energy Information Administration

Source: U.S. Energy Information Administration

Despite the increase in annual average crude oil prices in 2018, OPEC revenues fell during the second half of 2018, mainly because of lower production and export volumes from Iran and Venezuela (Figure 4). EIA estimates that OPEC total petroleum liquids production decreased slightly in 2018 when increased production in Saudi Arabia, Iraq, and Libya could not offset significant declines in Iranian and Venezuelan production. Combined crude oil production in Iran and Venezuela fell by almost 800,000 bpd, or 14%, in 2018 and again by over 1.0 MMbpd in the first seven months of 2019. Although Iranian net oil export revenues increased by 18% from 2017 to 2018, a year-to-date comparison indicates a significant decrease in revenues in 2019. EIA estimates that from January to July 2018, Iran received about $40 billion in export revenues, compared with an estimated $17 billion from January to July 2019. Further decreases in OPEC members’ production beyond current EIA assumptions would further reduce EIA’s OPEC revenue estimates for 2019 and 2020.


OPEC’s market share sinks – and no sign of wavering on supply cuts

LONDON (Reuters) – OPEC’s share of the global oil market has sunk to 30%, the lowest in years, as a result of supply restraint and involuntary losses in Iran and Venezuela, and there is little sign yet producers are wavering on their output-cut strategy. Crude oil from the Organization of the Petroleum Exporting Countries made up 30% of world oil supply in July 2019, down from more than 34% a decade ago and a peak of 35% in 2012, according to OPEC data. Despite OPEC-led supply cuts, oil LCOc1 has tumbled from April’s 2019 peak above $75 a barrel to $60, pressured by slowing economic activity amid concerns about the U.S.-China trade dispute and Brexit. The decline in prices, should it persist, and erosion of market share could raise the question of whether continued supply restraint is serving producers’ best interests. OPEC and its allies have a deal to limit supply until March 2020. The group tried to defend its market share under the previous Saudi oil minister, Ali al Naimi, who sharply ramped up production in a pump war campaign in 2014. Naimi was hoping to win the battle, arguing that OPEC’s output was the world’s cheapest and would allow the group to outdo other producers such as the United States. As a result of his strategy OPEC’s market share rose, while oil prices crashed to below $30 a barrel, triggering many bankruptcies of U.S. oil firms and over-stretching the Saudi budget. Riyadh and OPEC were forced to return to output cuts in 2017 to support prices, and sources within OPEC say there is no sign of any willingness to return to a pump war at the moment. “Saudi Arabia is committed to do whatever it takes to keep the market balanced next year,” a Saudi official said on Aug. 8. “We believe, based on close communication with key OPEC+ countries, that they will do the same.” OPEC, Russia and other producers have been restraining supply for most of the period since Jan. 1, 2017. The alliance, known as OPEC+, in July renewed the pact until March 2020. While helping to boost prices, OPEC’s market share has fallen steeply in the last two years. World supply has expanded by 2.7% to 98.7 million barrels per day, while OPEC crude output has fallen 8.4% to 29.6 million bpd. While OPEC agreements apply to production, OPEC’s exports are also falling as a percentage of world shipments, according to data from Kpler, which tracks oil flows. Iran has led the decrease in recent months. Nonetheless, Swedish bank SEB said that for now OPEC+ still has room to act, as the countries making most of the voluntary curbs – Russia, Saudi Arabia, Kuwait, UAE and Iraq – are still pumping at relatively high rates. Venezuela and Iran, under U.S. sanctions and being forced to curb shipments, have delivered the bulk of the cuts. Venezuelan supply was already in long-term decline before Washington tightened sanctions this year. “The active cutters are not very stretched at all,” SEB analyst Bjarne Schieldrop wrote in the report. “They have not lost market share to U.S. shale. Venezuela and Iran are the big losers.” While Saudi Arabia holds the biggest sway in OPEC as its largest producer, some in the group are not convinced further OPEC+ action to support prices will happen or would work. “I really doubt there will be further action,” an OPEC delegate said. “If it did happen, it will have a temporary impact because the driver is trade an

Farmer’s threat prompts U.S. Agriculture Department to pull staff from crop tour

FILE PHOTO: Flooded farm and farm equipment are seen in this aerial photo of the historic flooding conditions in portions of northeast Nebraska, U.S., March 15, 2019. Courtesy Jamie Titus/U.S. Air Force/Handout via REUTERS/File Photo

CORALVILLE, Iowa/CHICAGO (Reuters) – The U.S. Agriculture Department said on Wednesday it had pulled all staff from an annual crop tour after an employee was threatened, and three sources said the threat of violence was made during a phone call from an angry farmer.  U.S. farmers have complained this month that a government crop report did not reflect damage from historic flooding this spring. They are also frustrated about unsold crops due to the trade war with China, falling farm income and tighter credit conditions. Lance Honig, crops chief at the USDA’s National Agricultural Statistics Service, was among the USDA staffers who had to leave the privately-run Pro Farmer tour, three sources with knowledge of the situation said. Police will be present at stops for the rest of the trip, which ends on Thursday, they said. A local police officer was present at an event in Coralville, Iowa, on Wednesday evening, a Reuters witness said. “A USDA National Agricultural Statistics Service employee received a threat while on the Pro Farmer Crop Tour from someone not involved with the tour,” Hubert Hamer, administrator of the statistics service, said in a statement. “As a precaution, we immediately pulled all our staff out of the event.” The Federal Protective Service, part of the Department of Homeland Security, is investigating, USDA said. It declined to elaborate on the nature of the threat. Tour organizers said in a statement the threat was taken “very seriously.” “(We) have taken all steps possible to ensure the safety of everyone involved in the tour,” said Andy Weber, Chief Executive Officer of Farm Journal, the parent company of Pro Farmer. “It’s clearly a stressful time right now.” Honig had been scheduled to attend the meeting of around 600 people in Coralville and speak at the tour’s final event in Rochester, Minnesota, on Thursday to answer questions about the government’s crop forecast, according to tour organizers. Instead, Honig appeared in a video interview on Wednesday to defend the USDA’s work. He said that the agency’s forecast methodology included surveys of some 21,000 farmers, which “is what we hung our hats on.” Farmers at stops throughout the eastern and western legs of the normally tranquil crop tour have expressed frustration with USDA – though less so with President Donald Trump, who they largely voted for and continue to support. Corn future prices posted their biggest drop in three years after the USDA estimated a bigger-than-expected crop on Aug. 12, despite floods that slowed planting. USDA’s reports have long been a key reference for global commodities markets. Honig acknowledged that the season has been “horrific” for farmers, but emphasized that USDA’s statistics service has no bias or political slant in its research. He did not mention the threat. James McCune, a farmer from Mineral, Illinois, who was not on the tour, said he understood the anger. “Any farmer who talked to the USDA guy who made the crop report would probably say something derogatory to him,” McCune said. “I don’t know anybody that agreed with that stuff.” Farmers have been suffering from low commodity prices for years, and Washington’s trade war with Beijing has taken China, the top buyer of U.S. soybeans, out of the market. Floods and the trade war have contributed to falling farm incomes and tighter credit conditions as farmers struggle to repay loans. The Trump administration has also been scrambling to stem rising anger over its decision this month to allow numerous oil refiners to mix less corn-based ethanol into their gasoline. Nebraska City Police Captain Lonnie Neeman said security was requested at an event in Arbor Day Farm on Tuesday after an event at a previous stop in Grand Island, Nebraska, “got heated.” “Somebody called and said they were concerned there may be issues last night so we just walked through on occasion,” Neeman said. Farmers at the Grand Island event demanded details on the Pro Farmer tour’s methodology, attendees told Reuters. Still, most farmers, like Bill Baylis of Ohio who was on the eastern leg of the tour, condemned the threats. “Yes, these are challenging times. But this, threatening harm like this? It is not acceptable,” he said. Richard W. Guse, a grain farmer from Waseca, Minnesota, who was also on the tour, worried about the potential damage to farmers’ reputation. “It’s a very emotional year, and this now reflects horribly on farmers,” he said.

Cracks are appearing in the Mideast’s most important alliance. That’s bad news for Trump

Saudi Crown Prince Mohammed bin Salman (R) with UAE Crown Prince Mohammed bin Zayed in Jeddah on June 6, 2018.
Saudi Crown Prince Mohammed bin Salman (R) with UAE Crown Prince Mohammed bin Zayed in Jeddah on June 6, 2018.

(CNN)The partnership of Saudi Arabia and the United Arab Emirates is the closest anywhere in the Middle East. It goes back decades, fashioned by antipathy towards Iran and support for Sunni causes across the Muslim world. So when Mohammed bin Salman, now Crown Prince of Saudi Arabia, launched a military campaign against the Houthi rebels in Yemen four years ago, it was no surprise the UAE joined the offensive. The two states have also spearheaded an embargo against Qatar and have been vociferous supporters of the Trump administration’s sanctions against Iran. They have both supported, financially and rhetorically, President Abdel Fattah el-Sisi in Egypt. And there is a close personal relationship between Mohammed bin Salman and the effective leader of the UAE, Crown Prince Mohammed bin Zayed. But cracks have begun to appear in the region’s most important alliance, as the Yemen campaign staggers toward stalemate and tactics differ over confronting Iran’s behavior in the Gulf. And that may become a headache for the Trump administration, already frustrated by the Saudi-UAE spat with Qatar. The original purpose of the Yemen offensive was to blunt Iranian influence wielded there through the Houthi rebels. But ‘Operation Decisive Storm’ has turned out to be far from decisive. It became a quagmire — and a PR disaster because of the huge civilian suffering. The UAE seems to have concluded that the war is unwinnable and too costly to pursue and began drawing down its forces in Yemen in July — though it remains committed to counter-terrorism strikes against the Yemeni affiliates of al Qaeda and ISIS. While its military presence in Yemen was modest, the UAE punched above its weight, exerting great influence with factions in the south while the Saudis mainly worked with the internationally-recognized government, which is in effect based in Riyadh. Michael Knights at the Washington Institute for Near East Policy spent time embedded with UAE forces in Yemen and says: “Only the UAE had the military potency and local allied forces to credibly threaten defeat for the Houthis.” The drawdown of the Emirati presence in the port of Aden unleashed a confrontation between the southern separatists, backed and armed by the UAE, and the remnants of the Saudi-backed government in the city. The UAE’s allies attacked government facilities and took control of much of the city, including the port. Yemeni ministers publicly blamed the UAE for the separatists’ success. Last month, a senior Emirati official described the drawdown as a “strategic redeployment” and said the UAE had trained about 90,000 troops in Yemen. “Our commitment in Yemen remains. We are part of the coalition. Our discussion over our current redeployment has been ongoing for over a year,” the official told CNN. But analysts see the UAE’s move as a signal to the Saudi Crown Prince: it’s time to wind down this war. Ayham Kamal at the Eurasia Group says the UAE may be “trying to incentivize the Saudis to give more serious consideration to disengagement” with no military victory on the horizon. Kristin Diwan of the Arab Gulf States Institute agrees that Saudi Arabia is now more isolated in Yemen and “needs a settlement with the Houthis to secure its border in the north. The UAE drawdown may bring more urgency to this task, but it doesn’t strengthen the Saudi position in the negotiations.”  While the Saudi/UAE coalition reversed some Houthi gains, the rebels still control the capital and much of the north. They are capable of weekly missile and drone attacks against Saudi targets — from airports to pipelines. The latest attack was against the Shaybah gas facility last weekend. There are substantial Saudi ground forces — about 10,000 according to two sources familiar with Saudi deployments — inside Yemen. But much of the Saudi campaign against the Houthis has been waged from the air, with mixed results and heavy civilian casualties. In turn that has galvanized opposition in the US Congress to supplying weapons and assistance to the coalition. Last month, President Trump vetoed legislation to block $8.1 billion in arms sales to the kingdom. A ground offensive would inevitably worsen what is already the gravest humanitarian crisis in the world. But investing in the UN-led peace process would involve making concessions to the Houthis, a humiliating climbdown for the Saudi crown prince after four years of conflict. For now, the Saudis and the UAE are trying to get the various anti-Houthi parties to settle their differences. Last week bin Zayed met Saudi King Salman Bin Abdul Aziz and the Crown Prince in Jeddah and said both governments called on “rival Yemeni parties to cease fire and favor the language of dialogue and reason.” While the talks were full of fraternal solidarity, the fact remains that the war in Yemen is even more intractable since the UAE drawdown. The likely beneficiaries are the Houthis, Exhibit A in the Trump Administration’s case against Iran’s regional expansionism. Knights says: “No one in Washington or at the UN should presume that the current battle lines are fixed. They could easily move in the Houthis’ favor, with disastrous effects for the UN peace process.” Despite divergent approaches in Yemen, the Saudi-UAE alliance remains intact. Last week, the Emirates’ Minister of State for Foreign Affairs, Anwar Gargash, declared that ties “will continue to be strong as they are based on robust foundations and shared values.” The alliance has supplanted the role of the Gulf Cooperation Council, which is weakened by the ongoing dispute between the Saudis, the Emirates and Bahrain on the one hand and Qatar on the other. Saudi Arabia and the United Arab Emirates remain united in opposing Iranian expansionism: both support sweeping US sanctions against Tehran and their militaries co-ordinate closely. But the UAE may be adopting different tactics.  Ayham Kamal says its focus is avoiding escalation in the Gulf. At the beginning of this month, an Emirati delegation went to Tehran to discuss maritime security. The two sides signed what the Iranians called a “memorandum of understanding” to enhance cooperation at sea. After the sabotage of four tankers off Fujairah in May, the UAE was careful not to blame Iran directly for the attack. Crown Prince Mohammed was more forthright, saying in an interview: “We see how the Iranian regime and its proxies have carried out sabotage operations against four oil tankers near Fujairah port.” Some observers also detect a growing wariness among the Emiratis about the Trump administration. The euphoria of May 2017, when the US President visited Riyadh on his first overseas trip and openly backed Saudi-UAE pressure against Qatar, has long worn off. Hussein Ibish, who is with the Arab Gulf States Institute, writes in the Carnegie Endowment’s Diwan newsletter that “while Emirati officials have welcomed the U.S. administration’s campaign of ‘maximum pressure’ against Iran, they have been quietly warning for almost a year that there has to be a political track to translate the pressure into improved Iranian conduct.”

The Emirates’ economy — and especially that of Dubai — would be hard hit by any conflict in the Gulf. While Saudi Arabia can export oil and gas to its Red Sea coast, the diversified UAE economy is more vulnerable to external shocks.
Joe Macaron, a fellow at the Arab Center in Washington, believes the UAE’s opening to Iran “is tactical rather than strategic and is primarily a message to the Trump administration as their relationship has recently turned sour on several issues, including the U.S. rapprochement with Qatar.” Kamal, at the Eurasia Group, contends that the Trump administration’s mixed signals on confronting Iranian actions in the Gulf have “left its allies in the Gulf to face alone the brunt of Tehran’s retaliation efforts” against the imposition of US sanctions. That has led to some reappraisal, says Kamal. Over the long term, the Gulf states anticipate that the US will become a less reliable partner and gradually disengage from the Middle East. And over the long term that will likely underpin the Saudi-UAE axis as a counterweight to Iran. But right now, in the words of one western diplomat familiar with the region, “it’s a marriage that has issues.”

US Military MQ-9 Drone Downed Over Yemen – Reports

Earlier today, Yemeni Houthis reported that their air defence had downed a US multipurpose MQ-9 drone over the province of Dhamar in the central part of the country. A US military MQ-9 drone has been shot down over Yemen, Reuters reported citing two unnamed US officials. According to the sources, the incident occurred in the Dhamar governorate southeast of the Houthi-controlled capital Sanaa late on Tuesday. The report comes as the movement’s spokesperson told the Al Masirah broadcaster that the rocket which downed the drone was modernised on the spot and would soon be presented at a press conference. He warned the Saudi-led Arab coalition to think ‘a thousand times before invading Yemen’s airspace’. Yemen, located on the southern tip of the Arabian peninsula, has been mired in strife as the government forces, led by President Abdrabuh Mansour Hadi, and the rebel Houthi movement, have been locked in an armed conflict for several years. The Saudi-led coalition has been carrying out airstrikes against the Houthis at Hadi’s request since March 2015, with the rebels retaliating against the attacks. US drones are often used in Yemen to destroy suspected terrorists.

Glencore, BP stuck with tainted Russian crude

MOSCOW (Reuters) – BP and Glencore are struggling to sell around 600,000 tonnes (( little over 4 million barrels) of tainted Russian oil more than three months after the contamination was discovered, according to six trading sources. Russia’s oil industry was plunged into a crisis in April after about 5 million tonnes of oil ( a little over 35 million barrels) for export was found to be contaminated with organic chloride, a chemical used to help boost oil extraction but which can damage refining equipment. Exports through the Druzhba pipeline that transports oil to Germany, Poland, Hungary, Slovakia, the Czech Republic, Ukraine and Belarus were halted. The Baltic port of Ust Luga loaded some 15 cargoes or 1.5 million tonnes of the contaminated oil for Western buyers. At least 6 cargoes that sailed from Ust Luga remain unsold, according the trading sources. Glencore is stuck with 500,000 tonnes in one very large crude carrier (VLCC) Amyntas and two smaller tankers – Searanger and Searuby, according to the sources and Refinitiv Eikon vessel tracking system. BP has tried to sell its cargo Fsl Shanghai at a tender earlier this month but failed, according to the same traders. BP and Glencore both bought the oil from Russian state oil major Rosneft. BP and Glencore declined to comment. Rosneft did not respond to a Reuters request to comment. Oil firms have to blend one barrel of tainted oil with as much as 10 barrels of clean oil to reach required quality standards and avoid damaging equipment, sources said. Total, for example, offloaded its two tankers with dirty oil in Rotterdam and Lithuania for storage and blending and further refining. Russian oil supplies along the Druzhba pipeline to Germany, Poland, Hungary, Slovakia and the Czech Republic have resumed in July after weeks of severely reduced flows. Russia exported 24% less oil to Germany in the first six months of 2019, year-on-year, due to contamination although it still remained Germany’s top crude supplier. Some refiners like Total’s Leuna and Poland’s PKN Plock are blending tainted oil with cleaner barrels and are refining it. Rosneft’s Germany’s refinery Schwedt has refused to take dirty oil, according to traders. Rosneft declined to comment. Belarus has finished full clean-up of its system after Transneft pumped some 2 million tonnes of dirty oil back to Russia, Transneft and traders said. Transneft now needs to dilute the oil with cleaner supplies to domestic refineries and export destinations. The pipeline monopoly has also yet to sign final compensation documents with Kazakh producers to start repaying fees of $15 per barrel, traders said.

Kudlow: ‘No Recession In Sight’ YAH RIGHT!

larry kudlow smiles while president donald trump speaks in foreground
Preseident Donald Trump and Director of the National Economic Council  Larry Kudlow (Alex Edelman/Pool/Getty)

President Donald Trump’s top economic adviser insisted Sunday there’s “no recession in sight,” and that after looking at consumer activity, it’s fair to ask, “What’s wrong with a little optimism?” Nick Bit: its called a lick and a prayer! In an interview on “Fox News Sunday,” Larry Kudlow, director of the National Economic Council under Trump pointed to bright signs from consumers amid the tumult of Wall Street. “Consumers are working,” he said. “The wages are rising. They are spending and they’re saving. A lot of Wall Street firms looked at the numbers last week and they raised their forecast. So no, there is no recession in sight.” That’s about as good as it gets,” he added. “I think we are in pretty good shape and I want to just say we should not be afraid of optimism. I don’t know what it is — everybody wants to talk about pessimism, recession. What’s wrong with a little optimism?”  Kudlow also said tax cuts for the middle class — an issue promised after Trump’s tax cuts to businesses — are still on the table, and suggests it may be a good idea to use tariffs on China to fund them. “Tax cuts 2.0. We are looking at all that,” he said. “By the way, [GOP] Sen. Rick Scott of Florida, very smart guy, made an interesting proposal on another network last week. He said, ‘look, why don’t we take the tariffs from the China trade and turn those back to the taxpayers in the form of tax cuts?’ That’s an idea.” Nick Bit: i like the crud better when he had a little drinkie pooh every few hours. I understand he is very ill. Its eating at him having sold his soul to the Trump devil. He knows this will end in disaster. And no olives in his 3 martini lunch!

U.S. Oil Exports Become Victim Of Their Own Success

US oil Exports ARE dropping… how do you like that shit….Inventories are droppng.. production peeking… demand climbing!
U.S. oil exports surged to record levels earlier this year as more oil flows to the Gulf Coast, but the recent narrowing of WTI to Brent could slow shipments, unless and until the discount widens again. WTI has often traded at a discount to Brent in recent years, owing to surging shale production and a limited ability to move product. As exports increased, it acted as a pressure relief valve, moving more oil out of the U.S. and pushing the two benchmarks together. More recently, the startup of the Cactus II pipeline, which will ramp up to a capacity of 670,000 bpd, has connected more Permian oil to the Gulf Coast. In the third quarter, a total of three pipelines are expected to commence operations, including Cactus II. In addition, the 900,000-bpd Gray Oak pipeline is expected to come online in the fourth quarter.
The industry is at risk of overbuilding, as the sudden onset of multiple new pipelines adds more midstream capacity than is justified by the increase in Permian production.


Nevertheless, the new pipeline additions have pushed up Midland prices to the point where oil in Midland has actually traded at a premium to WTI in Cushing. “Now, the entire Midland-Cushing forward curve is in positive, due to expectations of excess pipeline capacity and a slowdown in E&P development activity in the basin,” Bank of America Merrill Lynch wrote in a note. More oil escaping the continent has pushed WTI and Brent closer together as differences in the U.S. market and the international market become smoothed out. But a narrow differential, in turn, challenges the economics of exporting oil from the U.S., putting a kind of cap on shipments. “In order to ensure USGC barrels continue to clear in the export market, we think Brent-MEH spreads will likely need to widen from here. Europe has recently imported upwards of 700k b/d of US crude oil exports,” Bank of America said. MEH refers to the price of WTI at the Magellan East Houston terminal – or more simply, the price of oil in Houston. In other words, Bank of America is arguing that the price that oil fetches along the U.S. Gulf Coast may have to fall relative to Brent in order for exports to increase. U.S. oil exports have declined a bit in recent weeks as WTI has moved closer to Brent. On the other hand, a smaller differential is another way of saying that Permian oil producers are fetching a higher price for their oil. The health of shale drillers in West Texas is now the subject of intense scrutiny. Shale E&Ps are decidedly out of favor with Wall Street, and financial stress is apparent at a large number of companies. Drilling has slowed, the rig count is down, and spending cuts are proliferating. However, Bank of America was more upbeat regarding the productivity of shale. Among the myriad issues with shale drilling, one of the more recent subjects of debate was the fact that E&Ps were suffering from operational problems. For instance, Concho Resources revealed that its densely-packed 23-well project performed much worse than expected, raising questions about shale drilling reaching its limits.

Bank of America is not convinced this spells the end of productivity gains. “Recent E&P performance results and commentary from industry experts have caused concern over the end of productivity gains in the US shale basins,” the investment bank wrote in its report. “We are of the opposite view and think that service efficiency and well level productivity continue to improve.” BofA said that drilling efficiencies wrote 14 percent so far this year, with frac efficiencies up 11 percent. Even with those gains, however, drilling is slowing down. “As drilling activity has slowed, so too has growth in completion activity. The slowdown in completion activity in 4Q18 and 1Q19 has led to meaningfully slower growth in the shale basins,” Bank of America said. “At an aggregate level, US crude oil production has flat-lined in recent months, however we forecast faster growth in the shale basins in 2H19 versus 1H, helping to re-establish the upward trajectory of US supply.” Slower production growth acts to push WTI closer to Brent, but the economic limits of exports when the two benchmarks are close together works in the other direction. One other wrinkle to consider is the U.S.-China trade war, which could put U.S. oil exports under pressure. Some analysts think that China may directly target U.S. oil for tariffs, although the damage from that move could be mitigated by shipping oil elsewhere. “All things considered, the U.S. crude-export machine may struggle to maintain its record-breaking run,” Stephen Brennock, oil analyst at PVM Oil Associates, told CNBC. In the long run, exports are likely to continue to rise. Billions of dollars of capital continue to flow into the Gulf Coast, and the number of export projects continues to grow as developers race to bring their terminals online before their competitors. But because of the complicated dynamics between exports, price differentials, pipelines and upstream shale stress, the precise levels of exports will continue to be choppy.

Iranian oil exports fell below 100,000 b/d in July: US

Washington — Iranian oil shipments have been ‘zeroed out’
Pompeo pushing maritime security partnership

US sanctions caused Iranian crude exports to fall to about 100,000 b/d in July, down from roughly 2.5 million b/d a year earlier, Brian Hook, the US Department of State’s special representative for Iran, said Tuesday. “We have effectively zeroed out Iran’s export of oil,” Hook said during a press briefing in New York. “I can’t overstate the significance of this accomplishment.” In July, Hook told S&P Global Platts that Iran’s oil exports likely fell below 300,000 b/d in June. Hook said Tuesday that by zeroing out oil exports, the US is disrupting about $50 billion in annual revenue to the Iranian regime. Hook’s export estimates, however, are below those of most of the private sector, possibly due to the administration’s opaque definition of exports. According to data from S&P Global Platts’ trade flow software, cFlow, shipments of Iranian oil fell to about 449,000 b/d in June from about 901,000 b/d in May. Initial data show Iranian oil exports averaged about 450,000 b/d in July. At the same time, the country’s floating storage inventories have doubled since May, climbing from about 20 million barrels to 40 million barrels in just two months, according to estimates. Getting an accurate estimate of Iran’s crude and condensate exports is proving tricky as a number of Iran’s state-owned oil tankers have recently turned off their satellite tracking systems, muddying the waters on where its oil is flowing. Hook on Tuesday cautioned against assisting Iran in moving Iranian crude, which he said is being shipped to Syria, in violation of both US and EU sanctions. “It you are a crew member or a captain on a vessel moving Iranian oil … then you are subject to criminal and immigration consequences,” Hook said. “As long as Iran is moving illicit oil around the world to fund its terrorist operations, it’s important that we do something about it.” On Sunday, the tanker Grace 1, which has been renamed Adrian Darya-1, was released by Gibraltar, more than a month after it had been seized on suspicion of carry oil to Syria. A US request to seize the tanker was rejected by Gibraltar. “It’s unfortunate that that happened,” Secretary of State Mike Pompeo said in an interview with FOX News Monday. “These are oil profits that, when this is ultimately sold somewhere into the market, that will run back to the – Qasem Soleimani and the Iranian Qods Force, their elite forces that have sown terror and destruction and killed Americans all around the world.” Hook said the US continues to track the movement of the Adrian Darya-1. The US has announced a maritime security partnership, aimed at improving security in the straits of Hormuz and Bab al-Mandeb. The UK and Bahrain have publicly joined that partnership. “The world has a joint interest in promoting freedom of navigation,” Hook said. Pompeo is expected to discuss the partnership  in a speech before the United Nations Security Council. Pompeo will likely try to boost international support for the partnership, said Henry Rome, an Iran analyst with the Eurasia Group. “The US effort to get allies on board has been hampered by deep suspicions in Europe about US intentions and concern among Gulf states about getting in the way of a US-Iran shooting war,” Rome said. “Moreover, the US is intentionally committing very few naval resources to the initiative, giving potential partner countries little incentive to join.”

U.S. removed almost 2.7 million barrels of Iranian oil from market – Pompeo

FILE PHOTO: U.S. Secretary of State Mike Pompeo speaks to the media at the State Department in Washington, U.S., August 7, 2019. REUTERS/Yuri Gripa

WASHINGTON (Reuters) – The United States has removed nearly 2.7 million barrels of Iranian oil from global markets as a result of Washington’s decision to reimpose sanctions on all purchases of Iran’s crude, U.S. Secretary of State Mike Pompeo said on Tuesday. In an interview with MSNBC, Pompeo said the U.S. government was confident it could continue with its strategy. The United States reimposed sanctions on Iran in November after pulling out of a 2015 nuclear accord between Tehran and six world powers. In May, Washington ended sanction waivers given to importers of Iranian oil, aiming to cut Tehran’s exports to zero. Iran exported about 100,000 bpd of crude in July, according to an industry source who tracks such flows and data from Refinitiv Eikon. If condensate, a light oil, is included, shipments were about 120,000 bpd a day. “We have managed to take almost 2.7 million barrels of crude oil off of the market, denying Iran the wealth to create their terror campaign around the world, and we have managed to keep the oil markets fully supplied,” Pompeo said. “I am confident we can continue to do that,” he added.

The Organization of the Petroleum Exporting Countries (OPEC), Russia and other producers have been cutting 1.2 million bpd since Jan. 1 to reduce global supply. OPEC in July renewed the pact until March 2020 to avoid a build-up of inventories as worldwide demand is seen weakening.


Despite OPEC’s actions along with U.S. sanctions on Iran and Venezuela, Brent crude international oil prices have been relatively weak, falling on Tuesday to $59 a barrel from a 2019 high of $75, pressured by concerns about slowing demand. The exact level of Iranian exports has become harder to assess since U.S. sanctions returned in November, meaning estimates fall into a range rather than a definitive figure.

OPEC+ decreases output by 159% in July – report

OPEC+ decreases output by 159% in July - report

Members of OPEC+ decreased their oil production output by 159% in July, Russian TASS reported, citing sources familiar with the matter. The decrease encompasses a decline in production from OPEC states of 156% and a deduction in non-OPEC production of 166%. The figures mean that oil production in July was reduced by 1.9 million barrels per day compared to October 2018 which is 700,000 barrels per day more than the planned reduction of 1.2 million barrels per day. Last week, OPEC raised its oil demand outlook for 2019 by 0.1 million barrels per day to 30.7 million barrels per day. Nick Note: So if some asshole wants to play ARMATURE analyst and blow smoke up your ass that Russia increased output OR SOME OTHER SIMILAR bullshit!  your a ASSHOLE if you listen to him. Everyone should know their JOB AND STICK WITH WHAT THEY KNOW!!!! . So don’t let dtrade, Shcubbie DO do,  google searches or what ever asshole broker your cursed with shit you.  OPEC production is PLUNGING. Oil inventories on a macro BASES are Plunging. AND oil production is peeking in the US and will soon enter a multi year decline. OIL WILL BE AT $100 a barrel. AND a WAR in the gulf will occur. So tell youR amateur asshole to stick with his ledgerS and tell your asshole broker to stick with what he knows.. and that is churning and burning (panicking them and bouncing them out on the bottom)  his clients and screwing pensioners out of their meager savings in dog shit junk bond funds that will soon default in mass… AND AND AND OPEC WILL GET $100 OIL BECAUSE OPEC WILL CUT WHAT EVER OIL SUPPLIES NECESSARY AND THE SAUDI’S ARE ABOUT TO SCREW THE WORLD WITH A TRILLION DOLLAR SOVEREIGN DEBT OFFERING ON THE ARMECO IPO AND THEY HAVE INVITED ALL THE INVESTMENT BANKERS TO FEAST ON THE SAVINGS OF 3 GENERATIONS!!!  by the way have a nice day!!!! We are ALL born stupid. The great sin is to stay stupid!!

Rising defaults in high-yield bonds puts this year on track for postcrisis record, warns Goldman Sachs

Defaults reach above 5%, from 1.3% bottom in November 2018
This chart shows the dollar amount of defaulted U.S. high-yield bonds thus far in 2019, which is approaching levels not seen since 2016, after Brent crude oil prices plunged below $35 per barrel and put significant pressure on the financial conditions of oil companies and exporters.

Defaults on bonds issued by debt-laden U.S. companies with speculative-grade ratings are on pace to reach a new high this year for the post 2008 crisis era, according to Goldman Sachs analysts. The bank has tracked more than $36 billion of defaulted so-called “junk bonds” already in 2019, and there are likely to be more, particularly in the energy sector, to eclipse the prior post crisis default record of $43 billion in 2016, wrote Goldman analysts led by Lotfi Karoui in a Thursday note to clients. “Thus far, defaults have been highly concentrated among energy issuers, a trend that reflects structural as opposed to cyclical challenges,” the Goldman analysts wrote. “The lingering weakness in oil prices coupled with weak growth sentiment may push issuers in other structurally-challenged sectors toward defaults.” Oil field servicing company Weatherford International Ltd WFTIQ, -0.11%, which filed for bankruptcy with $7.4 billion of high-yield debt, is the year’s second-largest default, after the massive default of California’s Pacific Gas and Electric Company PCG, -5.46% on $18.3 billion of debt in January, according to Moody’s Investors Service. In the case of Weatherford, Moody’s said it expects to see bond recoveries of 35%-65% on roughly $5.85 billion of debt that the company hopes to slash through its restructuring. PG&E was considered an investment-grade credit, until it filed for bankruptcy following devastating California wildfires in 2017 and 2018 left it facing billions in potential liabilities. Moody’s said this week in a separate report that junk-bonds issued by companies in July came with the worst protections yet for investors. Investors have plenty of high-risk and so-called grey swan events to watch for, as the third quarter draws closer. In high-yield, a big focus will be corporate earnings through year-end. Companies can end up in default when earnings slump, making it harder for borrowers to keep up on debt payments. Nick Bit: In October i Begged you to buy the 30 year strip. It would have cost you $3,562.78 for a $10,000 face amount bond at the worst would have tripled your money.. Last week i told you to TAKE PROFITS my 2 most favorite words in the English language. That strip would have bought you $5,685.58 .  A profit of  $2122.80 of over 60% in 10 months. So tell me how much did that IRA, Etrade, Fidelity asshole make you? They try to put you into one of their super duper high yield junk bond funds that yield MAYBE 6% before they default and you LOSE your money. Are you not tired of them making a asshole out of you?

OPEC Oil Production Continues To Slide As Saudis Cut Deeper

OPEC’s crude oil production fell by another 246,000 bpd in July compared to June, as Saudi Arabia deepened its cuts, as U.S. sanctions further trimmed output in Iran and Venezuela, and as an outage restricted production in Libya.   According to secondary sources in OPEC’s closely watched Monthly Oil Market Report published on Friday, total OPEC crude oil production averaged 29.61 million bpd in July, down by nearly 250,000 bpd from June, and driven by lower output in Saudi Arabia, Iran, Libya, Venezuela, and Nigeria. Iraq and Algeria recorded the largest production increases, OPEC’s secondary sources estimates showed.  The July crude production of the cartel members is a multi-year low, and close to the 29.42 million bpd production estimate in the monthly Reuters survey, which noted that OPEC’s production was at an eight-year low last month.   Saudi Arabia, keen to restrain oil price slides amid a markedly bearish market sentiment, deepened its already deep cuts, slashing another 134,000 bpd to have its July production average 9.698 million bpd, OPEC’s report showed. The Saudis have vowed to keep production well below 10 million bpd—although their quota is 10.3 million bpd—and exports at below 7 million bpd, aiming to tighten the market as demand growth weakens with gloomy macroeconomic prospects. Iran and Venezuela, both under U.S. sanctions, also saw their production down. Iranian production declined by 47,000 bpd from June to 2.213 million bpd in July, and Venezuela’s output dropped by 32,000 bpd to 742,000 bpd. Crude oil production in Libya, one of the wildest cards in OPEC in terms of production consistency amid security concerns, fell by 42,000 bpd to 1.078 million bpd last month, after its largest oil field experienced two outages in two weeks. In the last week of July, Libya’s production dropped to a five-month low below 1 million bpd, after a fresh outage at the Sharara oil field.   Even with OPEC’s falling oil production, the cartel sees demand for OPEC crude next year even lower than the July production—at 29.4 million bpd, or 1.3 million bpd lower than the 2018 level. Commenting on the oil market and macroeconomic developments, OPEC said in its report:   “While the outlook for market fundamentals seems somewhat bearish for the rest of the year, given softening economic growth, ongoing global trade issues and slowing oil demand growth, it remains critical to closely monitor the supply/demand balance and assist market stability in the months ahead.” Nick Bit: Absolutely positively OPEC+ led by the Saudis will do what ever it takes to get oil to $100 a barrel.

Signs of recession worry Trump ahead of 2020

President Donald Trump reacts at the end of his speech at a campaign rally, Thursday, Aug. 15, 2019, in Manchester, N.H. (AP Photo/Patrick Semansky)

WASHINGTON (AP) — President Donald Trump is warning of an economic crash if he loses reelection, arguing that even voters who personally dislike him should base their ballots on the nation’s strong growth and low unemployment rate.

But privately, Trump is growing increasingly worried the economy won’t look so good come Election Day.

The financial markets signaled the possibility of a U.S. recession this week, sending a jolt of anxiety to investors, companies and consumers. That’s on top of concerns over Trump’s plans to impose punishing tariffs on goods from China and word from the United Kingdom and Germany that their economies are shrinking. Though a pre-election recession here is far from certain, a downturn would be a devastating blow to the president, who has made a strong economy his central argument for a second term. Trump advisers fear a weakened economy would hurt him with moderate Republican and independent voters who have been willing to give him a pass on some his incendiary policies and rhetoric. And White House economic advisers see few options for reversing course should the economy start to slip. Trump has taken to blaming others for the recession fears, mostly the Federal Reserve, which he is pushing for further interest rate cuts. Yet much of the uncertainty in the markets stems from his own escalation of a trade war with China, as well as weakened economies in key countries around the world. Some of Trump’s closest advisers have urged him to lower the temperature of the trade dispute, fearing that further tariffs would only hurt American consumers and rattle the markets further. The president blinked once this week, delaying a set of tariffs in an effort to save Christmas sales. Aides acknowledge it is unclear what steps the White House could take to stop a downturn. Trump’s 2017 tax cut proved so politically unpopular that many Republicans ran away from it during last year’s midterms. And a new stimulus spending program could spark intraparty fighting over big deficits. The hope among administration officials is that a mix of wage gains and consumer spending will power growth through 2020. Yet Trump knows his own survival hinges on voters believing that he alone can prolong the economy’s decade-plus expansion. Trump has spent much of the week at his New Jersey golf club, many of his mornings on the links, his afternoons watching cable television and his evenings calling confidants and business executives to get their take on the market’s volatility. Though he has expressed private worries about Wall Street, he is also skeptical about some of the weaker economic indicators, wondering if the media and establishment figures are manipulating the data to make him look bad, according to two Republicans close to the White House, not authorized to discuss private conversations.His skepticism has been reinforced by White House officials who have long been inclined to only show Trump rosier economic assessments. Amid the market turmoil this week, the president tweeted out defenses of his economic record. He blasted the Fed for not cutting interest rates deeper, under the belief that sharper cuts would lead to more lending activity and make the U.S. dollar more competitive against foreign currencies. The president also highlighted the strength of consumer spending — as retail sales have jumped 3.4% from a year ago. One sector already suffering this year is manufacturing, the very industry that Trump pledged to revive and fortify with his tariffs. Factory output has fallen 0.5% during the past 12 months, the Fed said Thursday. Most economists — including Fed officials — still expect the economy to grow this year, just at a slower pace than last year’s 2.9%. “I think we’re heading down that road to recession — we’re on that steady march toward that inevitable conclusion,” Anderson said. “It’s just that drip, drip, drip of trade war anxiety that is hanging over market sentiment.”

Corn Industry Battered By Shocking Ethanol Decision

Corn Ethanol

The Trump administration has tried to thread the needle between the corn ethanol and oil refining industries, as the two battle it out over federal policy. The EPA may have thought it came up with a balanced approach when it issued a series of recent decisions, but judging by market reactions, the agency seems to have decidedly come down on the side of oil over ethanol. Federal policy requires a certain volume of biofuels to be blended into the nation’s fuel mix. Each year, the EPA decides on the exact levels, and it is a bit of a zero-sum game between ethanol producers and oil refiners. The ethanol industry wants higher blending levels because that expands sales, while refiners want less in order to defray costs. While perennially at odds, the two industries were at a bit of standstill for much of the Obama administration because while both sides surely had their gripes, there at least was some predictability about government policy. That all changed under the Trump administration, and specifically, under the stewardship of Scott Pruitt, former administrator at EPA. Under his tenure, EPA ramped up the number of waivers that it granted to the refining industry, absolving some smaller refiners of the requirement to buy ethanol who claim the obligation would inflict economic hardship.   The move upset a fragile balance between the two industries, infuriating farmers and ethanol producers. The market for renewable identification numbers (RINs), which are the credits refiners can buy to offset their blending obligations, went haywire after the increase of waivers from EPA. The lack of policy clarity led higher volatility and lower prices for RINs, and politicians from farm states – allies of President Trump – demanded EPA stop issuing so many waivers. Trump tried to stay above the fray, fearing angering one side over the other, and told his lieutenants to hash out a compromise.  Trump even proposed allowing the year-round sale of E15 – a higher concentration of ethanol that was off limits during summer months over air pollution concerns – as a way of making amends with corn and ethanol producers. But the administration just issued a shocking decision to the corn and ethanol industries. On August 9, the EPA announced its decision on 2018 waiver requests, approving 31 of them while denying six. The decision appears to be an attempt to offer something to both sides, but the biofuels industry was incensed. “The Trump Administration’s approval of 31 refinery exemptions from the Renewable Fuel Standard is just devasting news for our industry,” said Iowa Renewable Fuels Association (IRFA) Executive Director Monte Shaw in a press release. “With this action, President Trump has destroyed over a billion gallons of biofuel demand and broken his promise to Iowa voters to protect the [Renewable Fuels Standard].” Ahead of the announcement, prices for RINs plunged to 11 cents, down from 20 cents a day earlier, according to Argus. “At a time when ethanol plants in the Heartland are being mothballed and jobs are being lost, it is unfathomable and utterly reprehensible that the Trump Administration would dole out more unwarranted waivers to prosperous petroleum refiners,” Geoff Cooper, CEO of Renewable Fuels Association, said in a statement, calling the EPA decision a “total shock.” Refiners, on the other hand, welcomed the decision. “Capital planning is difficult without knowing whether your refinery needs to set aside millions of dollars for RIN purchases,” the Small Refiners Coalition said. “The decision to grant small refinery hardship is a legal decision, not a political one.” For farmers, the hits keep on coming, and EPA’s decision is merely the latest in a series of blows from Washington. The U.S.-China trade war has battered the U.S. Midwest, as farmers have all but lost access to the Chinese market. China has turned to Brazil for ethanol and for soybeans. Prices for U.S. soybeans, corn and other agricultural commodities have plunged. More recently, corn prices rebounded, but only because the Midwest was soaked in record-breaking floods that threatened corn plantings. However, the latest data from the U.S. Department of Agriculture shows that yields are not expected to be as hard hit as previously expected – normally good news, but higher-than-expected supply sent corn prices tumbling all over again. On Monday, corn futures fell by the “limit down,” or the maximum allowed before trading is cut off. Futures prices for corn-based ethanol plunged to a five-year low for the time of year, falling to $1.27 per gallon on Wednesday, down roughly 25 percent since June. “The Trump administration has totally annihilated the margins for ethanol producers,” Charlie Sernatinger, head of global grains futures with ED&F Man Capital Markets, told the Wall Street Journal.

U.S. issues warrant to seize Iranian tanker off Gibraltar

GIBRALTAR (Reuters) – The United States has issued a warrant to seize an Iranian oil tanker caught in the standoff between Tehran and the West in a last ditch effort to prevent the vessel from leaving Gibraltar. The name of Iranian oil tanker Grace 1 is seen removed as it sits anchored after the Supreme Court of the British territory lifted its detention order, in the Strait of Gibraltar, southern Spain. The Grace 1 was seized by British Royal Marines at the western mouth of the Mediterranean on July 4 on suspicion of violating European Union sanctions by taking oil to Syria. Gibraltar lifted the detention order on Thursday after the British territory’s chief minister said he had secured written assurances from Tehran that the cargo would not go to Syria. But with the vessel and its 2.1 million barrels of oil free to leave, the United States launched a separate legal appeal to impound the ship on the grounds that it had links to Iran’s Islamic Revolutionary Guard Corps (IRGC), which it designates as a terrorist organization. A federal court in Washington issued a warrant to seize the tanker, the oil it carries and nearly $1 million. “A network of front companies allegedly laundered millions of dollars in support of such shipments,” the U.S. attorney for the District of Columbia, Jessie Liu, said in a news release. “The scheme involves multiple parties affiliated with the IRGC and furthered by the deceptive voyages of the Grace 1.” The U.S. State Department did not immediately respond to a request for comment on how the warrant, which was addressed to “the United States Marshal’s Service and/or any other duly authorized law enforcement officer,” may be enforced. The Pentagon declined to comment, as did Britain’s Foreign Office. Asked on Friday about the U.S. intervention, Gibraltar’s chief minister, Fabian Picardo, said that would be subject to the jurisdiction of Gibraltar’s Supreme Court. “It could go back to the court absolutely.” The Gibraltar Chronicle newspaper reported that the vessel was unlikely to sail before Sunday, citing an unnamed source who added that it was waiting for six new crew members including a captain to arrive. The Grace 1 had its name erased and it was no longer flying a Panama flag. Iranian state television had quoted Jalil Eslami, deputy head of the country’s Ports and Maritime Organisation, as saying the tanker would depart for the Mediterranean after being reflagged under the Iranian flag and renamed Adrian Darya

Oil rises alongside equities, but weak OPEC outlook caps gains

NEW YORK (Reuters) – Oil prices on Friday rebounded from a two-day drop, alongside equities as expectations of further stimulus by central banks helped to ease recession concerns. But oil’s gains were capped after the Organization of the Petroleum Exporting Countries trimmed its global oil demand forecast in a downbeat outlook for the rest of 2019 as economic growth slows. The cartel also highlighted challenges in 2020 as rivals pump more, building a case to keep up an OPEC-led pact to restrain supplies. “OPEC killed the golden goose,” said Bob Yawger, director of futures at Mizuho in New York. “We’ve had some little rallies back into the green, as market tries to follow equities higher, but the fundamentals in the report are so bearish that it caps the rallies.” Brent crude LCOc1 was up 24 cents, or 0.41%, at $58.64 a barrel at the close of NY trading, after falling 2.1% on Thursday and 3% the previous day. U.S. crude CLc1 rose 24 cents to $54.94 a barrel, having dropped 1.4% in the previous session and 3.3% on Wednesday. For the week, the oil benchmarks were unchanged even as Wall Street’s three main indexes were on track to rack up their third consecutive week of losses, as investors worried about the risk of recession and U.S.-China trade tensions. [BNP Paribas cut its forecast for 2019 for U.S. crude by $8 to $55 per barrel and for Brent by $9 to $62 per barrel, citing slowing economy amid the trade dispute. The price of Brent is still up nearly 10% this year helped by supply cuts led by OPEC and its allies such as Russia, a group known as OPEC+. In July, OPEC+ agreed to extend oil output cuts until March 2020 to prop up prices. “At what point will further output cuts be needed at the back end of this year from OPEC and Russia to keep things going the way they are?” said Phin Ziebell, senior economist at National Australia Bank. A Saudi official indicated this month that more steps may be coming, saying Saudi Arabia was committed to do “whatever it takes” to keep the market balanced next year. OPEC’s efforts have been undermined by worries about the economy , as well as rising U.S. stockpiles of crude and higher output of U.S. shale oil.

Trump held conference call with big bank CEOs amid market turmoil: source

WASHINGTON (Reuters) – President Donald Trump held a conference call Wednesday with the heads of three large Wall Street banks as financial markets were in turmoil, one source with direct knowledge said on Friday. Following a previously scheduled meeting at the Treasury Department, JPMorgan Chase & Co.’s Jamie Dimon, Bank of America Corp.’s Brian Moynihan and Citigroup Inc.’s Michael Corbat discussed the economy and financial markets with Trump, who was at his resort in Bedminster, New Jersey. The conversation came on a day that saw all three major U.S. indexes close down roughly 3 percent amid ongoing concerns about the global economy.

API: Total U.S. petroleum demand in July highest since 2005

  • Sustained world-leading crude oil production at a record pace of 12 MMbpd year-to-date;
  • Total U.S. petroleum demand of 20.8 MMbpd was highest for July since 2005; and,
  • Jet fuel demand for the month of July reached a new record of 1.8 MMbpd.

WASHINGTON – Total U.S. petroleum demand averaged 20.8 MMbpd in July 2019, which represented a 0.9% year-over-year increase and the highest demand for the month since 2005, according to the latest Monthly Statistical Report released today by the American Petroleum Institute. The increase in demand came as the U.S. continued to sustain world-leading production, which continues to meet virtually all global oil demand growth. Highlights from the July 2019 Monthly Statistical Report include: “The continued ability of U.S. production to meet the world’s increasing energy needs is a testament to the shale revolution,” said API Chief Economist Dean Foreman. “With sustained production at a record pace of 12 MMbpd year-to-date, and U.S. Energy Information Administration analyses predicting that natural gas and oil will provide more than half the world’s power for decades to come, the U.S. is increasingly well-positioned to cushion global oil markets and insulate consumers from external shocks and price volatility.”

SIXTH weapons test in just a month amid US tensions


It comes amid anger in Pyongyang at ongoing US-led military exercises with South Korea – which the North views as a rehearsal for invasion. A rocket launched by North Korea last Tuesday. Tonight another two missiles were launched by Kim Jong-un’s regime . North Korean leader Kim Jong-un celebrates a rocket test last week. The regime has now carried out another testCredit: AP:Associated Press And there is growing frustration in Kim Jong-un’s regime at stalled talks between the US and North Korea over his weapons programme. The unidentified projectiles smashed into waters off North Korea’s eastern coast on Friday morning local time, South Korea’s military said. They are likely to be the same short range rockets used in recent launches – which despot Kim had said would cause “inescapable distress to a fat target.” North Korean state media previously described the weapon as a “new-type large-calibre multiple launch guided rocket system” – but no specific details were given. The launch came after the North issued a statement berating South Korea – saying it’s “senseless” to resume peace talks while the joint-US military drills continue. It extends a recent streak of rocket tests believed to be aimed at pressuring Washington and Seoul over slow nuclear diplomacy. The US is trying to get North Korea to rein in its nuclear weapons arsenal and curb long-range missile tests. South Korea says North Korea’s missile launch is contrary to military agreement

Strong U.S. retail sales ease gloom over economy

Walmart Soars 8% On Strongest Sales In 10 Years

WASHINGTON (Reuters) – U.S. retail sales surged in July as consumers bought a range of goods even as they cut back on motor vehicle purchases, helping to assuage financial market fears that the economy was heading into recession. The upbeat report from the Commerce Department on Thursday, however, will likely not change expectations that the Federal Reserve will cut interest rates again next month as news from the manufacturing sector remains dour, underscoring the darkening outlook for the economy against the backdrop of trade tensions and slowing growth overseas. President Donald Trump cheered the strong retail sales data, which came a day after a key part of the U.S. Treasury yield curve inverted for the first time since June 2007 and triggered a stock market sell-off. An inverted Treasury yield curve is historically a reliable predictor of looming recessions. Trump’s “America First” policies, which have led the United States into a bitter trade war with China, have been blamed for threatening to derail the longest U.S. economic expansion in history and unleash a global recession. “The United States is now, by far, the Biggest, Strongest and Most Powerful Economy in the World, it is not even close!” Trump wrote on Twitter. “As others falter, we will only get stronger. Consumers are in the best shape ever, plenty of cash.” Financial markets have fully priced in a 25-basis-point rate cut at the U.S. central bank’s Sept. 17-18 policy meeting. The Fed lowered its short-term interest rate by a quarter of a percentage point last month, citing the acrimonious U.S.-China trade fight and slowing global economies. Retail sales increased 0.7% last month after gaining 0.3% in June, the government said. Economists polled by Reuters had forecast retail sales would rise 0.3% in July. Compared to July last year, retail sales increased 3.4%. Excluding automobiles, gasoline, building materials and food services, retail sales jumped 1.0% last month after advancing by 0.7% in June. These so-called core retail sales correspond most closely with the consumer spending component of gross domestic product. Solid retail sales were reinforced by strong second-quarter results from Walmart Inc (WMT.N). The world’s largest retailer posted a 20-quarter, or five-year, streak of U.S. growth, unmatched by any other retail chain, and raised its earnings forecasts for the year. July’s gain in core retail sales suggested strong consumer spending early in the third quarter, though the pace will likely slow from the April-June quarter’s robust 4.3% annualized rate. Consumer spending, which accounts for more than two-thirds of the economy, is being underpinned by the lowest unemployment rate in nearly half a century. The economy grew at a 2.1% rate in the second quarter, decelerating from the first quarter’s 3.1% pace. Growth estimates for the third quarter range from a 1.5% pace to a 2.1% rate.  Online and mail-order retail sales jumped 2.8%, the most in six months, after rising 1.9% in June. They were likely boosted by Inc’s (AMZN.O) Prime Day event. There were increases in sales at clothing, furniture and building material stores. Sales at restaurants and bars accelerated 1.1%. Nick Bit: So much for the myth that the US economy is slipping into a recession. First we get the bubble……. Then the bust

GE shares fall on report that its finances are worse than disclosed

Scaramucci accuses Trump of ‘mentally declining,’ which the White House says is ‘ridiculous.’

Trump’s decision to tie his performance to the markets isn’t looking so smart
Anthony Scaramucci wearing a suit and tie standing in front of a building: Anthony Scaramucci, former director of communications for the White House, speaks during a Bloomberg Television interview in New York, earlier this month.
© Christopher Goodney/Bloomberg Anthony Scaramucci, former director of communications for the Trump administration
Stephanie Grisham, in her first television interview since becoming White House press secretary, was forced to defend President Trump on Wednesday against scathing comments made by Anthony Scaramucci, who appeared moments before her segment. Grisham dismissed Scaramucci, who held her job in the Trump administration for 11 days in 2017, as just someone with hurt feelings after he was fired. Scaramucci has had a dramatic about-face when it comes to Trump. In less than half the time he served in the White House, Scaramucci went from Trump ally to nemesis. On HBO’s “Real Time With Bill Maher” on Friday, he was still calling Trump a friend. By Monday, Scaramucci suggested Republicans look for another nominee to replace Trump at the top of the ticket. Scaramucci unleashed on his former boss over an eight-minute interview on Sinclair Broadcast’s “America This Week” with Eric Bolling.

“He’s mentally declining,” Scaramucci said. “He’s losing his step here in terms of how he’s thinking about human beings, and he’s creating a corrosive, socially-dividing cancer in the country that’s not worth the economics.”

Grisham later said questioning Trump’s mental state was “ridiculous.” Bolling repeatedly asked Scaramucci to explain why he stood by Trump for so long and was turning on him now. Scaramucci said the president’s comments suggesting four congresswomen of color “go back” to the places they’re from; the “send her back” chant at his rally about Somali-born Rep. Ilhan Omar (D-Minn.); and his tweets denigrating the city of Baltimore convinced him that Trump’s objective was to divide the country. Scaramucci said the president is not a “racist” because he’s too much of a “narcissist” to see people as anything by “an object in the room.” Democrats, including many running for president, have called Trump a racist and a white supremacist following a mass shooting in El Paso where the gunman mirrored some of Trump’s language about immigrants. “The president as he has said, he’s not racist in any way,” Grisham said. “It’s just what people like to throw out there when they have nothing else to say.” Scaramucci had been criticizing Trump’s policies and comments — but not him personally — for days, but it wasn’t until Trump tweeted negatively about him on Monday that Scaramucci said he decided any kinship between the two was over.  Asked about Trump’s tweet about Scaramucci fueling this feud, Grisham said: “The president is going to counterpunch when someone goes at him, that’s how he is.” She added, “The things Anthony are saying are incorrect.” She also said the public explanation of Scaramucci’s firing, which came after he gave a profanity-filled interview to a reporter, isn’t the whole story, but she declined to say more. Scaramucci also had choice words for Grisham’s other predecessor, Sean Spicer, calling him “Liar Spice from the Spice Girls.” “There’s never been a bigger liar than him. Trump’s up there,” he said. Scaramucci also made a bold prediction that Trump would not run in 2020, but provided no evidence or explanation to back that up that claim.

No concessions from China as Trump postpones some tariffs: U.S. officials

the art of a bullshitter gone stark raving mad

WASHINGTON (Reuters) – China made no concessions to the United States after President Donald Trump postponed threatened tariffs on some Chinese imports until mid-December, senior U.S. officials said on Wednesday, adding that talks aimed at resolving the trade fight would continue and markets should be patient. “This was not a quid pro quo,” U.S. Commerce Secretary Wilbur Ross told CNBC television in an interview, using a Latin phrase meaning a favor exchanged for a favor. Trump on Tuesday backed off his Sept. 1 deadline for imposing 10% tariffs on thousands of Chinese imports, including technology products, clothing and footwear, pushing it to Dec. 15 for certain items. U.S. and Chinese officials also announced renewed trade discussions. Both developments drew cautious relief from retailers and technology groups as the world’s two largest economies enter the second year of their trade dispute. Trump’s tariff delay comes amid growing concerns about a global economic slowdown. U.S. stocks fell sharply on Wednesday as bond markets issued a possible recession signal with the U.S. Treasury yield curve inverting for the first time since 2007. [.N][US/] White House trade adviser Peter Navarro, in a separate interview on Fox Business Network, said the decision to delay the additional tariffs was made to limit the pain on U.S. businesses, which already had contracts to buy Chinese goods for the holiday selling season and had no way to avoid passing costs on to consumers. Trump on Tuesday said he delayed the tariffs to shield Christmas sales from the tariffs. Looking for concessions from China in exchange for the delayed tariffs is the “totally wrong way to look at it,” Navarro said. “The whole premise of what we’re trying to do is pain on them, not pain on us,” Navarro said. “And so … if we simply put the tariffs on Sept. 1 that would be more pain on us, rather than pain on them. That’s just silly.” Navarro declined to say what U.S. negotiators would seek to achieve in the talks with Chinese officials before the tariffs take effect. Another phone call is scheduled between the two sides later this month. “These negotiations will happen behind closed doors,” Navarro said. “People just need to be patient.” Ross said on CNBC that it was too early to assess where U.S.-China trade talks stand, adding that a date has not been set for another round of face-to-face discussions. “Until something is really formally announced and mutually agreed, it’s a little premature to say where anybody is,” Ross said. China’s economy stumbled more sharply than expected in July, with industrial output growth cooling to a more than 17-year low, according to data released on Wednesday, as the intensifying U.S. trade dispute took a heavier toll on businesses and consumers.

China Oil Refinery Throughput Jumps 4% In July

China oil port

Refinery throughput in China went up by 4 percent last month, to a total 52.6 million tons, or about 12.44 million bpd, Reuters reports, citing data from the National Bureau of Statistics. That’s down from a record-high processing rate of 12.68 million bpd, recorded first in January and February this year and then again in April. It is still pretty strong going thanks to higher demand for crude from independent refiners who are building new refining capacity. Independent refiners currently account for about 30 percent of China’s oil processing capacity, which stands at 15 million barrels daily and rising. According to an analysis from Bloomberg released in March, this year will see refining capacity additions of as much as 890,000 bpd. With higher processing rates imports of crude also jumped in July. These averaged 9.66 million bpd, up by 14 percent on the year. The trend could soon reverse, however, as the country prepares for its National Day in October. The preparations involve reducing industrial activity to cut pollution levels. These reductions are seen affecting both imports and refinery processing rates during the third quarter of the year. The rebound in refining rates is somewhat surprising as it comes amid a persistent glut of fuels, the result of increased independent refiner activity. This glut has led to a squeeze in refining margins both in China and in neighboring countries as the excess fuel spills into the rest of Asia. Yet the government once again granted generous crude import and fuel export quotas to refiners this year. The July increase in imports also indicates strong oil demand, but U.S.-Chinese trade tensions have had some analysts worrying that U.S. oil could fall victim to the tariff war. Even the risk of tariffs is reason enough for Chinese refiners to choose another source of oil as they did last year when trade tensions spiked.

U.S. 30-Year Yield Falls to Record Low

look at the chart and take profits

U.S. 30-year yields fell to their lowest level ever as investors sought shelter amid a fraught geopolitical backdrop and concern increased about the impact of the escalating global trade war on economic growth. Meanwhile, the stream of investors into the safest parts of the market has triggered yet another recession warning, driving the 10-year Treasury yield below the two-year one.

The 30-year yield tumbled as much as nine basis points to 2.0738%, below the previous record low of 2.0882% from July 2016.

The gap between 5-year and 30-year debt, a widely watched yield curve, flattened to 54 basis points, while the equivalent gap between 2-year and 10-year debt inverted for the first time since 2007.

Chinese oil traders shun US crude as trade row deepens

New Caesar

London — Chinese crude oil traders said this week they are shying away from US crude as trade dispute uncertainties mean that government backing for purchase commitments could evaporate overnight, leaving them exposed to undelivered seaborne cargoes. The situation became particularly dire in the past month and a half when the US-China trade relationship was a geopolitical roller coaster of tariffs and countermeasures. In late June, the reopening of negotiations between the US and China was accompanied by Beijing’s promise to buy more US-origin commodities, mainly agricultural products, but also energy products like crude oil and LNG. But by early August, the White House imposed 10% tariffs on Chinese goods and a massive devaluation in the Yuantook the trade row into new territory, raising fears of a currency battle. This was followed by a surprise easing of tariffs Tuesday after a phone call between negotiators in Beijing and Washington. All of this happened while the Greece-flagged VLCC Sophia was still on its 50-day voyage from the offshore Galveston lightering area in the US to China’s Shuidong and Yangpu ports, highlighting how much the trading and geopolitical landscape can change in the space of a single voyage. Chinese buyers were unsure if Beijing would still back purchase commitments amid this fracas. A Shanghai-based trader with a US crude supplier said its customers in China are decidedly averse to US spot cargoes, let alone the signing of long-term supply contracts. “They won’t buy unless the US ceases tariffs and withdraws the statement saying that China was a currency manipulator,” the trader added. Traders with China’s state-owned oil giants said this week that they will not touch US barrels amid policy uncertainties. A trader for commodity trading house Mercuria echoed the same sentiment, despite the fact that US crudes remain attractive due to good economics and high yield of light ends. China currently does not impose any tariffs on US crude imports, but data shows that US-China crude flows have collapsed regardless, and demand from China has eroded significantly. State-run Unipec, the trading arm of China’s largest refiner Sinopec, has long-term contracts to purchase about3-4 VLCCs of US crude each month, but actual deliveries in China have been much fewer as most cargoes were sold midway on the global market. The national oil company would rather divert the cargoes than bring them back to China due to the unpredictability of tariffs. The US exported 4.25 million barrels of crude to China in the week ended July 5, 2.7 million barrels in the week ended July 19, and around 550,000 barrels each in the weeks ended August 2 and August 9, respectively, according  Platts trade flow software. But a ship’s destination data can be misleading and there is a strong likelihood of the cargoes being diverted elsewhere. US crude arrivals in China hit an eight-month high of 799,318 mt (189,000 b/d) in May, and slipped marginally to 769,095 mt crude in June, according to customs data. The VLCC New Caesar was the most recent ship to load US crude for China on August 7, having picked up 556,000 barrels of crude at Galveston for delivery at Ningbo port in eastern China, shipping data showed.  China’s independent refiners have been indirectly importing US-origin crude from storage terminals in north Asia, an alternative route for US barrels into the Chinese market. Independent refiner Tianhong Chemical in July imported two 42,000-mt cargoes of Alaska North Slope crude from Gwangyang port in South Korea. It received three such cargoes in June, loaded at Yeosu, and one cargo of US Eagle Ford crude from China’s bonded storage in May.

Ex-Fed boss Greenspan says ‘there is no barrier’ to Treasury yields falling below zero

‘There is no barrier for U.S. Treasury yields going below zero. Zero has no meaning, beside being a certain level.’
Getty Former Federal Reserve Board Chairman Alan Greenspan.

There is some $15 trillion in government debt that now yields less than zero, and former Federal Reserve Chairman Alan Greenspan believes there’s no reason why U.S. government bond yields couldn’t join much of the developed world in the subzero world. Greenspan, during a phone interview with Bloomberg News on Tuesday, said “zero” has no real meaning for the U.S. bond market and that a slide below that psychological level, already traversed by many others countries, wouldn’t be inconceivable for U.S. paper. The 93-year-old economist’s comments come as more Wall Street participants contemplate the very real possibility of negative Treasury rates. In a blog post dated Aug. 6, Joachim Fels, a global economic adviser for Pimco, said escalating trade tensions between the U.S. and China could be a spark for U.S. Treasurys slipping to rates that are less than zero. Current estimates hold that some $15 trillion in debt bears a negative yield, which means that investors get back less than their original investments for the privilege and perceived safety of owning government-backed debt. The negative-yield dynamic in the market has proliferated after more than a decade of monetary-policy unorthodoxy intended to juice stubbornly low inflation and anemic growth in Europe and parts of Asia. Deutsche Bank Securities’ Chief Economist Torsten Sløk on Tuesday noted that some 42% of negative-yielding debt is from Japan, known as JGBs TMBMKJP-10Y, +6.42% :

All maturities of German government debt are yielding negative, headlined by near-record lows for 10-year German benchmark bonds TMBMKDE-10Y, -2.73% , known as bunds, which yield minus 0.605% (see chart attached):

Greenspan said he agreed with one theory espoused by Fels, which says that investors are more willing to hold on to negative-yielding debt because they have much longer time horizons. “Why people continue to buy long-term Treasuries at such low yields may be also due to forces having altered people’s time preferences,” Greenspan told Bloomberg. “But there is hundreds of years of history showing the long-term stability in time preference, so these changes won’t be forever.” As of late Tuesday, 10-year U.S. benchmark debt TMUBMUSD10Y, -3.06%   was yielding 1.678%, not far from its lowest levels since 2016, with Wall Street anticipating nearly a 100% chance of a 25-basis-point cut in September, following a rate reduction of a similar amount on July 31 by the rate-setting Federal Open Market Committee, based on federal-funds futures, according to CME Group data. Stocks, meanwhile, have been rallying on the prospect of cheap debt that is being proffered by global central banks, though the Dow Jones Industrial Average DJIA, +1.44%  , the S&P 500 SPX, +1.48%   and Nasdaq Composite indexes COMP, +1.95%   have seen volatile trade on the back of fears about international trade disputes between Beijing and Washington and the impact of that tiff on the global economy.

Oil rises most in 7 months as tariff delay brightens outlook

NEW YORK (Bloomberg) – Crude oil jumped the most since early January as the trade deadlock between the world’s biggest economies showed signs of easing, calming fears that global economic growth would be endangered. Futures surged as much as 5% in London on Tuesday, topping $61/bbl for the first time in more than a week. Optimism swept across financial markets after the U.S. postponed tariffs on some Chinese goods and the Asian powerhouse said the two sides will hold new talks in two weeks. New York-traded crude climbed 4.6%. “Some of the pessimism about oil demand and the trade war is being washed out of the market by these announcements,” said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts. While Brent has gained the last three days, it’s still down about 6% this month. Saudi Arabia’s pledge to curb exports in a matter of weeks hasn’t been sufficient to offset booming production from American shale fields and lingering fears about demand growth. “We still have an undecided oil market,” said Ole Sloth Hansen, head of commodity strategy at Saxo Bank A/S in Copenhagen. “That may be surprising, given the renewed verbal intervention from oil producers increasingly frustrated to see that their medicine — production cuts — isn’t having the desired effect.” In the U.S., West Texas Intermediate crude for September delivery rose $2.05 to $56.98/bbl at 1:45 p.m. on the New York Mercantile Exchange. Brent for October settlement rose $2.58 to $61.15 on the ICE Futures Europe Exchange, after earlier rising the most since Jan. 9. The global benchmark crude traded Tuesday at a $4.30 premium to WTI for the same month, a rebound after it had shrunk to the narrowest since March 2018. The U.S. will postpone until mid-December a 10% tariff on Chinese products on many holiday-shopping lists, including mobile phones and toys, President Donald Trump said. China said top officials from the countries spoke by telephone on Tuesday and will resume discussions in two weeks. Expectations of declining U.S. crude supplies are also driving bullish sentiment. Inventories probably dropped by about 2.5 MMbbl last week, according to the median estimate in a Bloomberg survey before Energy Information Administration data due Wednesday

Oil soars over 3% on easing U.S.-China trade tensions

They are coming back chuck full of cell phone and toys for the kiddies….just in time for Christmas

NEW YORK (Reuters) – Oil prices rose over 3% on Tuesday after the United States said it will delay imposing a 10% tariff on certain Chinese products, easing concerns over a global trade war that has pummelled the market in recent months. Those Chinese products include laptops and cell phones. The tariffs had been scheduled to start next month. Brent LCOc1 futures were up $2.08, or 3.6%, to $60.65 a barrel by 11:07 a.m. EDT (1507 GMT), while U.S. West Texas Intermediate crude CLc1 was up $1.86, or 3.4%, to $56.79. Prior to Tuesday’s gain, Brent was trading down more than 20% since hitting its 2019 high in April. Earlier Tuesday, the premium of Brent over WTI WTCLc1-LCOc1 fell to its lowest since March 2018. The U.S. dollar index .DXY jumped and bond yields also turned higher after the U.S. Trade Representative said the Trump administration would delay imposing the tariffs on certain Chinese products. Oil prices see-sawed earlier in the day, caught between demand worries and rising global supplies and expectations for deeper production cuts from leading producers. U.S. oil output from seven major shale formations was expected to rise by 85,000 barrels per day (bpd) in September to a record 8.77 million bpd, the Energy Information Administration forecast in a report. “The big test now is whether the shale producers can keep growing production at these lower price levels,” said Callum Macpherson, head of commodities at Investec. “This could be the start of a re-adjustment process from the artificially high prices OPEC is implicitly trying to maintain down to something more in line with the marginal shale production costs,” Macpherson said. Saudi Arabia, the de-facto leader of the Organization of the Petroleum Exporting Countries, last week said it planned to keep its crude exports below 7 million bpd in August and September to help to drain global oil inventories. The kingdom’s plan to float its national oil company Saudi Aramco in what could be the world’s largest initial public offering (IPO) gives it further impetus to boost prices. “With Saudi Aramco reportedly eyeing an IPO once again, there is some support to the idea that Saudi Arabia has a heightened interest in strong crude prices and will cut its own output accordingly,” Vienna-based consultancy JBC Energy said. OPEC and its allies, known as OPEC+, have agreed to cut 1.2 million bpd of production since Jan. 1. In the United States, analysts forecast crude stockpiles dropped by 2.8 million barrels last week, according to a Reuters poll. The American Petroleum Institute (API), an industry group, is due to release its inventory report at 4:30 p.m. EDT (2030 GMT) on Tuesday, followed by U.S. government data on Wednesday morning. [EIA/S]

‘Trump is ruining our markets’: Struggling farmers are losing a huge customer to the trade war — China

U.S. farmers lost their fourth largest export market after China officially cancelled all purchases of U.S. agricultural products, a retaliatory move following President Donald Trump’s pledge to slap 10% tariffs on $300 billion of Chinese imports “It’s really, really getting bad out here,” Bob Kuylen, a farmer of 35 years in North Dakota, told CNBC. “There’s no incentive to keep farming, except that I’ve invested everything I have in farming, and it’s hard to walk away.” Three numbers show how US farmers have already been hit by the trade war U.S. farmers lost one of their biggest customers after China officially cancelled all purchases of U.S. agricultural products, a retaliatory move following President Donald Trump’s pledge to slap 10% tariffs on $300 billion of Chinese imports. China’s exit piles on to a devastating year for farmers, who have struggled through record flooding and an extreme heat wave that destroyed crop yields, and trade war escalations that have lowered prices and profits this year. “It’s really, really getting bad out here,” said Bob Kuylen, who’s farmed for 35 years in North Dakota

“Trump is ruining our markets. No one is buying our product no more, and we have no markets no more.”

Agriculture exports to China dropped by more than half last year. In 2017, China imported $19.5 billion in agricultural goods, making it the second-largest buyer overall for American farmers. In 2018, that dropped to $9.2 billion as the trade war escalated, according to the United States Department of Agriculture. This year, China’s agricultural imports from the U.S are down roughly 20%, and U.S. grain, dairy and livestock farmers have seen their revenue evaporate as a result. Over the last 6 years, farm income has dropped 45% from $123.4 billion in 2013 to $63 billion last year, according to the USDA. Zippy Duvall, president of the American Farm Bureau Federation, said China’s exit is a “body blow to thousands of farmers and ranchers who are already struggling to get by.” China’s exit will most impact U.S. grain farmers. China is the world’s top buyer of American soybeans, buying about 60% of U.S. soybean exports last year. Analysts estimate that soybean prices have dropped 9% since the beginning of the trade war. Soybean exports to China have dropped by 75% from September 2018 to May 2019, compared to the same nine-month period in 2017 and 2018, according to data from the USDA. “It’s killing us,” said Mark Watne, a wheat and soybean farmer who is president of the North Dakota Farmers Union. Watne said he lost $3 per bushel of soybeans he planted this year. In May, the Trump administration rolled out a $16 billion federal aid package for farmers. On Tuesday, a day after China announced its exit from U.S. agriculture, Trump promised farmers that China’s mounting attacks on the U.S. farm sector won’t hurt them, and promised more aid in 2020 if necessary. More than 2,300 counties that voted for Trump in 2016 have received money from the bailout program, and counties that flipped from voting for Barack Obama in 2012 to Trump in 2016 were more likely to get money than counties that were red during both elections, according to Environmental Working Group data obtained by the Washington Post.

Some farmers say the billions in bailouts and rounds of subsidies they’ve received thus far have failed to cover enough of their profit losses. Many say they’d rather make a profit in the marketplace than through a government program.

“I’m happy for the $16 billion, but I’d much rather get it from the marketplace,” Watne said. “The reality is I can’t. It’s going to be too little, too late for some farmers.” “They [the White House] should start thinking about another major bailout,” he added. “Either you let a bunch of farmers go broke or you do another payout.” Farmers are an important voting base for Trump, who is running for reelection next year. While he’s given no indication of backing off in the trade war, struggling farmers appear to remain loyal. Nick Bit: Want proof farmers are stupid. Well the first clue is they get their harvest and bring it to the grain elevator at the same time everyone else is and ask the Agriculture conglomerate how much will you give me. Then they get back into their Pick en Up Truck and scratch their ass through their bib overalls and wonder why they aren’t making any money!  The second proof they are stupid s Trump starts a trade war he can’t win that is wiping out the farmer(farm bankruptcies are up 20%) and the idiots still vote for him.

Anthony Scaramucci says Trump is in nuclear meltdown mode — and he couldn’t keep quiet any longer

Take it from the Mooch: Trump is in meltdown mode — and it’s too much for even a friend to take
Anthony Scaramucci says Trump is in nuclear meltdown mode — and he couldn’t keep quiet any longer
Anthony Scaramucci, the former White House Communications Director

Onetime Trump-whisperer Anthony Scaramucci said Monday that he kept his lips sealed for years about the president’s erratic behavior but “his increasingly divisive rhetoric…outweighs any short-term economic gain.

Scaramucci was explaining his observation in a Sunday night interview that Trump is imploding in front of the country’s eyes and Republicans will have to think about replacing him on the top of the 2020 ticket.

“A couple more weeks like this and ‘country over party’ is going to require the Republicans to replace the top of the ticket in 2020,” Scaramucci told Axios. Ramping up his war of words, the Mooch compared Trump’s damage to the GOP to the Chernobyl nuclear disaster. He suggested that even former cronies like himself, who once shamelessly curried favor with Trump. “The reactor is melting down and the apparatchiks are trying to figure out whether to cover it up or start the clean-up process,” Scaramucci added. Scaramucci’s interview amounts to a fairly remarkable verbal shot across his ex-boss’s bow. Although he lasted just 11 days before being dumped as White House communications chief in 2017, the Mooch has remained on decent terms with Trump since then. Most advisers try to stay on the good side of Trump because they know the famously fickle leader might bring them back into his inner circle at some point. That changed when Scaramucci called out Trump for his incendiary white nationalist rhetoric. After the recent mass shootings in El Paso and Dayton, Scaramucci slammed Trump’s visits to the wounded cities as “catastrophic.” Trump responded by slamming Scaramucci as “unqualified” and for cashing in on the fame that Trump bestowed upon him. Now, it’s open war. Scaramucci predicted GOP mandarins would now open their eyes to the damage Trump is inflicting on the party, although it’s not clear what is different about this latest episode. “If he keeps it up, it will no longer be unspeakable,” he said. “The minute they start speaking of it, it will circulate and be socialized. We can’t afford a full nuclear contamination site post 2020.”

U.S. turning Gulf region into ‘tinderbox’ – Iran’s Zarif


DUBAI (Reuters) – Iranian Foreign Minister Mohammad Javad Zarif accused the United States on Monday of turning the Gulf region into a “matchbox ready to ignite”, according to Al Jazeera television. Oil tanker traffic passing through the Gulf via the Strait of Hormuz has become the focus of a U.S.-Iranian standoff since Washington pulled out of an international nuclear deal with Iran and reimposed sanctions to strangle Tehran’s oil exports. After explosions that damaged six tankers in May and June and Iran’s seizure of a British-flagged tanker in July, the United States launched a maritime security mission in the Gulf, joined by Britain, to protect merchant vessels. Zarif, in interview remarks cited by Qatar-based Al Jazeera, said the Strait “is narrow, it will become less safe as foreign (navy) vessels increase their presence in it”.

“The region has become a matchbox ready to ignite because America and its allies are flooding it with weapons,” he said.

Zarif, who arrived on Sunday in Doha, met on Monday with Qatari Emir Tamim bin Hamad Al-Thani for talks to convey that message, Iranian state-run media reported. Qatar, which hosts one of the biggest U.S. military bases in the Middle East, is trying not to be drawn into the escalating conflict between Washington and Tehran. Iraq, which maintains good relations with both Washington and Tehran, cautioned on Monday that the deployment of Western forces was fueling regional tension. “The states of the Gulf can together secure the transit of ships,” Iraqi Foreign Minister Mohammed al-Hakim said on Twitter. “Iraq is seeking to reduce tension in our region through calm negotiations…The presence of Western forces in the region will increase tension,” he said. Last month, Iran’s Revolutionary Guards seized the British tanker, Stena Impero near the Strait for alleged marine violations, two weeks after Britain seized an Iranian oil tanker near Gibraltar, accusing it of violating sanctions on Syria. The tanker dispute has tangled Britain in the diplomatic dispute between the EU’s big powers – which want to preserve the Iran nuclear deal – and the United States which has pushed for a tougher policy on Iran.

Fed Considers New Tool for a Downturn

The countercyclical capital buffer would require banks to hold more capital should the economy show signs of overheating

Fed Gov. Lael Brainard, right, favors turning on the buffer now and raising capital requirements for big banks, while Fed Chairman Jerome Powell says capital levels are already high enough. Photo: shawn thew/European Pressphoto Agenc

WASHINGTON—Federal Reserve officials are weighing whether to use a tool that could reduce the risk of a credit crunch in a downturn. The tool is known as the countercyclical capital buffer. It allows the Fed to require banks to hold more loss-absorbing capital should the economy show signs of overheating, or to keep less of it during bad economic times. The buffer applies generally to banks with more than $250 billion in assets, including firms such as JPMorgan Chase & Co., Bank of America Corp. and Citigroup Inc. The Fed’s board of governors so far hasn’t used the tool, approved in 2016. Its rule on the buffer says it should turn it up when economic risks are “meaningfully above normal” and reduced when they “abate or lessen.” Now, some Fed officials are debating whether it is time to use the tool, which could provide banks with additional lending firepower in a subsequent downturn. It isn’t clear when they might make a decision. “The idea of putting it in place so you can cut it, that’s something some other jurisdictions have done, and it’s worth considering,” Fed Chairman Jerome Powell said at a late July press conference. Fed officials have been debating about whether to use the tool since last year. Now, they are raising another question: how it should be used. Fed Gov. Lael Brainard, an Obama appointee, favors turning on the buffer now and raising capital requirements for big banks. She dissented from a March Fed vote to leave the buffer dormant. “Turning on the [buffer] would build an extra layer of resilience and signal restraint, helping to damp the rising vulnerability of the overall system,” she said in a May speech. The countercyclical capital buffer was created in 2010 by international regulators through the Basel Committee on Banking Supervision. It is being used in other parts of the world, including Sweden and Hong Kong.

U.S. oil drillers cut rigs for sixth week in a row: Baker Hughes

(Reuters) – U.S. energy firms this week reduced the number of oil rigs operating for a sixth week in a row as producers cut spending on new drilling and completions leading to lower production growth forecasts. Drillers cut six oil rigs in the week to Aug. 9, bringing the total count down to 764, the lowest since February 2018, General Electric Co’s (GE.N) Baker Hughes energy services firm said in its closely followed report on Friday. RIG-OL-USA-BHI That is the most weekly declines in a row since March when drillers also cut rigs for six consecutive weeks. In the same week a year ago, there were 869 active rigs. The oil rig count, an early indicator of future output, has declined over the past eight months as independent exploration and production companies cut spending on new drilling as they focus more on earnings growth instead of increased output. Pioneer Natural Resources (PXD.N), one of the largest U.S. independent oil producers, on Wednesday warned that the shale boom could end by 2025 in all but one area of the Permian Basin, the country’s largest shale field, as oil prices remain low and many producers pull back on drilling. [nL2N2530RI]

The U.S. Energy Information Administration (EIA) this month lowered its projected total U.S. crude output to 12.27 million barrels per day this year.

U.S. crude futures CLc1 traded above $54 per barrel on Friday, putting the contract on track to fall about 2% for the week on a report from the International Energy Agency that projected demand would grow by its least since the financial crisis of 2008. [O/R]. U.S. financial services firm Cowen & Co this week said that projections from the exploration and production (E&P) companies it tracks point to a 5% decline in capital expenditures for drilling and completions in 2019 versus 2018. Year-to-date, the total number of oil and gas rigs active in the United States has averaged 1,004. Most rigs produce both oil and gas. Analysts at Simmons & Co, energy specialists at U.S. investment bank Piper Jaffray, have forecast the average combined oil and gas rig count will slide from a four-year high of 1,032 in 2018 to 970 in 2019 and 955 in 2020 before rising to 997 in 2021.

Strong OPEC Cuts Slightly Tightening Oil Market In The Short Term

Oil tanker

OPEC’s crude oil production dropped by 200,000 bpd in July from June, and helped by additional cuts of 100,000 bpd from the non-OPEC part of the production cut coalition, the market balance in the short term has tightened slightly, the International Energy Agency (IEA) said on Friday, but warned that the slightly tighter market is a “temporary phenomenon.” According to IEA’s estimate reported by TASS, OPEC’s compliance with the production cuts that were extended into 2020 in early July was 119 percent last month, while the non-OPEC countries part of the deal showed overall compliance of 107 percent with their share of the cuts.  “Robust compliance with OPEC+ supply cuts and losses from Venezuela and Iran saw OPEC oil production fall by 2 mb/d versus July 2018,” the IEA said in its Oil Market Report. Saudi Arabia’s production in July was 700,000 bpd below its quota under the OPEC+ deal, “in a clear sign of its determination to support market re-balancing,” the IEA said. On Thursday, reports emerged that Saudi Arabia had approached other members of OPEC to discuss possible steps they can take to arrest a slide in oil prices that have brought them to the lowest in seven months. Deeper production cuts at leading producer Saudi Arabia, lower output at sanctions-hit Iran, and outages in Libya and Venezuela sent OPEC’s crude oil production in July falling to its lowest level since 2011, the monthly Reuters survey found last week.    The IEA estimates that OPEC’s crude oil production was 29.7 million bpd in July. Should the cartel keep that output level through the rest of the year, this would imply a draw in global stocks of 700,000 bpd in the second half of 2019, also assisted by slowing growth pace of non-OPEC production, the Paris-based agency said.   The slight market tightening, however, will be shattered again next year, as the IEA expects “very strong” non-OPEC production growth at 2.2 million bpd, which, under the current assumptions, will mean that “the oil market will be well supplied.”

Lack of G7, IMF support seen dimming impact of U.S. move on China’s yuan

Munchin Trumps Lap Dog declares China a currency manipulator……. Their not! Trump got the sound bite and little else

WASHINGTON (Reuters) – China is unlikely to face serious consequences from the Trump administration’s decision to label it a currency manipulator given the apparent lack of G7 and IMF support for the move, former and current U.S. and G7 officials said. The U.S. Treasury last week put the designation on Beijing for the first time since 1994, roiling financial markets and escalating a bitter tit-for-tat tariff war between the world’s two largest economies. An accord agreed by the Group of Seven of the world’s most advanced economies in 2013 says that members should consult each other before taking major currency actions. But former and current officials said the Treasury failed to make those consultations, contradicting White House economic adviser Larry Kudlow’s claim that G7 members were on board. European countries were astonished by the lack of coordination, one senior official of a European G7 country told Reuters, asking not to be named because they were not authorized to speak to the media. The day after the announcement, German Finance Minister Olaf Scholz warned against stoking tensions at a time when trade conflicts were already hindering growth. “A further escalation will only do damage,” Scholz said in a statement, adding, “Everyone should keep a level head and tone down the rhetoric a bit.” Monday’s designation came just hours after President Donald Trump tweeted that China was manipulating its currency following a drop in the yuan below 7 to the dollar, which itself occurred a few days after Trump said he would impose a 10% tariff on an additional $300 billion worth of Chinese goods. A weaker yuan makes Chinese imports cheaper. The announcement came as a surprise to many at the White House, especially since Treasury did not classify China as a manipulator in its latest semi-annual currency report in May, a person familiar with the matter said. The International Monetary Fund has been reluctant to comment on the U.S. move. The United States is the IMF’s largest shareholder and has strong sway over who will be its new leader after Christine Lagarde resigned last month. A U.S. Treasury official said Secretary Steven Mnuchin spoke with IMF Acting Managing Director David Lipton this week by telephone about currency consultations and also about the leadership succession. The official offered no further details. On Friday, the head of the IMF’s China department, James Daniel, stood by the fund’s assessment last month in a report on currencies and trade balances that the value of China’s yuan was broadly in line with economic fundamentals. He provided no clues to the path forward on the IMF’s engagement with Treasury. Prominent economists, including former IMF chief economist Maurice Obstfeld and former Treasury Secretary Larry Summers, say there is no evidence to support the move.

Saudi-led coalition moves against separatists who seized Aden in blow to alliance

Saudi-led coalition moves against separatists in Yemen – Reuters

ADEN (Reuters) – The Saudi-led coalition intervened in Aden on Sunday in support of the Yemeni government after southern separatists effectively took over the port city, fracturing the alliance that had been focussed on battling the Iran-aligned Houthi movement. The Sunni Muslim coalition said it attacked an area that posed a “direct threat” to the Saudi-backed government of Abd-Rabbu Mansour Hadi, which is temporarily based in Aden. It did not specify the site, but a local official told Reuters it had targeted separatist forces surrounding the nearly empty presidential palace in the Crater district. Hadi is based in Riyadh. “This is only the first operation and will be followed by others … the Southern Transitional Council (STC) still has a chance to withdraw,” Saudi state TV quoted it as saying. The alliance had threatened military action if the separatists did not quit government military camps they seized in the city on Saturday, after four days of clashes that killed at least nine civilians, and halt fighting. As many as 40 killed and 260 injured in Yemen’s Aden – U.N. statement STC Vice-President Hani Ali Brik, writing in a Twitter post marking a Muslim holiday that began on Sunday, said that while the Council remained committed to the coalition it would “not negotiate under duress”. It had earlier agreed to a truce. The United Arab Emirates-backed separatists have a rival agenda to Hadi’s government over the future of Yemen, but they have been a key part of the coalition that intervened in the Arabian Peninsula nation in 2015 against the Houthis after the group ousted Hadi from power in the capital Sanaa in late 2014. The violence complicates United Nations’ efforts to end the war that has killed tens of thousands and pushed the long-impoverished country to the brink of famine. The fighting trapped civilians in their homes with limited water supplies in Aden, the port of which handles some commercial and aid imports. Residents said clashes had ceased on Saturday night. Coalition member the UAE, which has armed and trained thousands of southern separatists, urged calm. Riyadh said it would host an emergency meeting aimed at restoring order. Hadi’s government has asked Abu Dhabi to stop backing southern forces. The infighting is a serious setback for the coalition in its more than four-year campaign to break the grip of the Houthis, who control Sanaa and most urban centres. The Aden clashes began on Wednesday after the separatists accused an Islamist party allied to Hadi of complicity in a missile attack on a southern forces military parade in Aden. Analysts said that Abu Dhabi and Riyadh, Sunni Muslim allies united against Shi’ite foe Iran, would work together to contain the crisis even though the UAE in June scaled down its military presence in Yemen as Western pressure mounted to end the war. “The UAE and Saudi Arabia have allied with distinct Yemeni partners … Yet to this point in the conflict, Abu Dhabi and Riyadh have worked to maintain a relative detente between competing interests in the south,” Elizabeth Dickinson, senior analyst at International Crisis Group, told Reuters. “That is the approach again today,” she said, but added that there was real concern that the situation could deteriorate into “a civil war within a civil war”. The war has revived old strains between north and south Yemen, formerly separate countries that united into a single state in 1990 under slain former President Ali Abdullah Saleh. The Houthis’ deputy foreign minister on Saturday said that the Aden events proved Hadi’s government was unfit to rule and called for a dialogue with other main powers in Yemen to establish a federation under a “unified national framework”. The U.N. is trying to salvage a stalled peace deal in the main port city of Hodeidah, north of Aden, to pave the way for peace talks at a time of heightened tensions after the Houthis stepped up missile and drone attacks on Saudi cities.  The Yemen conflict is widely seen in the region as a proxy war between Saudi Arabia and Iran. The Houthis deny being puppets of Iran and say their revolution is against corruption.

Israel is Seeking to Ignite a Conflict or Even War Between the Gulf States, Iranian Scholar Believes

Iran has warned Israel and the US about the formation of a US-led flotilla in the Persian Gulf. On Thursday, Iranian Defence Minister Amir Hatami said that it would have “disastrous consequences” for the region. Hatami held telephone talks with his counterparts in Kuwait, Oman, and Qatar urging them to resist US efforts to expand its presence in the Gulf. Amid rising tensions, the US has been seeking to form a coalition known as Operation Sentinel in order to protect shipping in the Strait of Hormuz. Earlier this week, Israeli Foreign Minister Israel Katz said that Tel Aviv would join the US-led naval security mission. According to Israeli media reports, Katz said that the goal is to protect trade routes in the Persian Gulf, help counter Iran, and strengthen relations with Gulf countries. Israel is said to be assisting the mission with intelligence cooperation. Seyed Hadi Borhani, an instructor at the University of Tehran, an expert on Middle Eastern countries, gave his take on Israel’s participation in this mission: “Israel does not have any interests in the energy sector or any other field in this region, therefore, it has nothing to protect here. Rather, Israel has other goals. I think that it’s seeking to ignite a conflict or even war between the Gulf countries such as Iran and Saudi Arabia”. Talking about Iranian authorities possible reaction to Israel’s actions, Borhani noted that Tehran sees this as a serious threat: “For Iran, Israel is the main enemy, and if it comes close to the Iranian border or threatens the interests of Iran, the actions of the Iranian authorities will be swift and consequential, as a result of which significant pressure will be exerted on Israel. In the end, the Iranian authorities will determine the political course towards Israel, and they will do everything in their power to prevent it from entering the region”, the Iranian scholar stressed.

Farm equipment maker Deere’s dealers reel from trade war, bad weather

Nothing runs like a deer being shot at in Trumps mindless trade war

CHICAGO (Reuters) – When China announced this week that it had stopped buying U.S. agricultural products and might impose additional tariffs on farm shipments from America, Dave Schmidt braced for another blow to his business. The Salem, Wisconsin-based dealer of Deere & Co’s (DE.N) tractors, planters and combines is grappling with declining sales and higher levels of inventory as farmers have put off equipment purchases in the wake of rain-delayed planting in the Midwest and the yearlong Sino-U.S. trade standoff. Schmidt says sales at his dealership, in general, declined by as much as 15% in the first half of the year, led by a fall in the demand for large equipment. In a sign of things to come, early orders for planting equipment for next season’s soybean and corn crops are down up to 25%. He is not alone. Half a dozen dealers of Deere’s agriculture equipment across the Midwest shared similar accounts in interviews with Reuters. One of those dealers, in Geneseo, Illinois, said sales at his dealership were down 50% so far this year from the same period last year. This is a worrying sign for Deere, which gets nearly 60% of its sales from the United States and Canada. The Moline, Illinois-based company is expected to report lower sales at its agriculture & turf segment when it reports its third-quarter earnings on Aug. 16. The segment, which accounts for the bulk of the company’s sales, is expected to report quarterly sales of $6.24 billion, compared with $6.29 billion a year ago, according to Refinitiv IBES’ average analyst estimate. Overall, Deere is expected to report quarterly earnings of $2.88 per share, compared with $2.78 a share in the corresponding period last year. Revenue for the July quarter is forecast to come in at $9.40 billion, up from $9.29 billion last year. In May, Deere slashed its full-year profit and sales outlook, blaming the U.S. trade war with China for weak demand for its farm machines. The company’s shares, however, have gained a little over 14% since its last earnings report on hopes that a rally in corn prices would encourage farmers to buy new equipment. But dealers are not so sanguine. “We are not expecting demand for planting equipment to come back up this year,” Schmidt said. “We might see more repair and upgrading of the existing equipment.” Deere has downgraded the estimates for U.S. principal crop cash receipts this year, an important indicator for equipment demand, citing China’s retaliatory tariffs on American imports, which have slashed exports earnings of American farmers. China imported $9.1 billion of U.S. farm produce in 2018, down from $19.5 billion in 2017, according to the American Farm Bureau, the largest farm industry group in the country. U.S. shipments to China of soybeans, the country’s most valuable farm export, sank to a 16-year low last year as the Asian nation mostly shifted purchases to Brazil, leaving American farmers with surplus stocks. U.S. soy prices are down 18% since March 2018, when President Donald Trump launched a tariff war on China and other countries. Deere rival CNH Industrial (CNHI.N) last week said the shift has driven up its order book for tractors and combines in South America, particularly in Brazil. A record-wet spring has devastated a wide swath of the U.S. farm belt and inflicted more economic pain on soybean and corn producers, particularly those whose fields were too wet to ever plant, dampening hopes of an improvement in farm income and equipment sales. To compensate farmers for the market loss due to the trade war, the Trump administration has committed as much as $28 billion in federal aid. The latest tranche of the aid will likely begin to be paid out later this month. The bailout money, however, is not expected to lift equipment sales. “We are yet to feel most of the effects of too much water and the lower prices,” said Paul Gilsinger, a Deere dealer in Knox, Indiana. “In the second half of the year, demand could slow down further.” To prevent a supply glut, U.S. agricultural machine maker AGCO Corp (AGCO.N) and CNH have slashed production to keep inventory in line with retail demand. A similar concern prompted Deere to cut production by 20% at two of its large factories in North America. Yet, Gilsinger expects to be saddled with this year’s inventory next year. To move used machinery, he is offering waivers on interest on equipment financing. Schmidt’s dealership has been running a similar incentive program. Yet, the inventory turnover ratio for used tractors has doubled, he said. Adding to the worry, dealers are also encountering an increase in payment delays. “When you get into a slowdown, it takes a while for demand to build back up,” Schmidt said. “These things don’t change on a dime.”