Oil futures prices continued to tumble, with West Texas Intermediate (WTI) falling below $100 per barrel for the first time since May 11. Fears of a recession appear to indicate that demand for fossil fuels may be reduced further, while the European Union urged an agreement on the Joint Comprehensive Plan of Action (JCPOA) is reached soon. West Texas Intermediate (WTI) for settlements in August dropped by 10% at 11:40 am ET, to sell for $99.62 per barrel. A minute later, Brent for September settlements plummeted by 9.38% to go for $102.92 per barrel. NN: commodity prices are tumbling across the board. This will trigger a relief rally in stocks… Trickiest market i have ever seen. thats ok i do trickey
Saudis Unwilling To Upset Putin As Biden Begs For More Crude
- The United States is calling on Saudi Arabia to increase oil production.
- Saudi Arabia has maintained its OPEC+ output agreement, refusing to ramp up production.
- The Kingdom is still maintaining close ties with Russia despite its continued aggression in Ukraine.
The world’s largest crude oil exporter, Saudi Arabia, continues to keep close ties with Russia while the top oil consumer, the United States, pleads with major producers—including the Kingdom—to boost supply to the market and help ease consumers’ pain at the pump. While the U.S. and its Western allies are sanctioning Moscow and banning oil imports from Russia, U.S. President Joe Biden is also turning to Saudi Arabia to ask it to pump more oil as Americans pay on average $5 a gallon for gasoline. The Saudis prefer to keep close ties with Russia in oil policy as the OPEC+ pact and the control over a large portion of global oil supply has benefited both OPEC+ leaders—the Kingdom and Russia—over the past half a decade. Saudi Arabia, however, could use a little thaw in Saudi-U.S. relations under President Biden, who is no longer talking about the world’s top crude exporter as a “pariah” state. The Saudis are carefully maneuvering to keep Russia as an ally in the OPEC+ group and possibly improve relations with the United States. President Biden—desperate to see relief for American drivers ahead of the midterm elections—has made a U-turn on Saudi Arabia and is expected this month to visit the Kingdom, which he said on the campaign trail would be treated as a “pariah” state during his presidency. But U.S. gasoline prices at $5 a gallon and the loss of part of the Russian supply have made President Biden reconsider and meet with Crown Prince Mohammed bin Salman. Saudi Arabia has publicly reiterated its “warm” ties with Russia on several occasions since Putin invaded Ukraine, and considers keeping Russia in the OPEC+ alliance an important part of its oil policy. With Russia leading a dozen non-OPEC producers in the pact, Saudi Arabia has more sway over global oil markets with the larger OPEC+ group than with OPEC alone. Russian President Vladimir Putin and Saudi Crown Prince Mohammed bin Salman have discussed their countries’ cooperation in the OPEC+ oil production pact in a few telephone conversations since February, and have vowed to continue their cooperation. Last month, Russian Deputy Prime Minister Alexander Novak said that Russia could continue its participation in the OPEC+ agreement even after it officially expires at the end of this year. Novak was speaking after a meeting in St Petersburg with Saudi Arabia’s Energy Minister, Prince Abdulaziz bin Salman, who made a surprise appearance at a Russian economic forum. During that meeting, the Saudi minister said that Saudi-Russian relations were “as warm as the weather in Riyadh.” Two weeks before that meeting, Russia’s Foreign Minister Sergey Lavrov visited Riyadh and met with his Saudi counterpart Prince Faisal bin Farhan Al Saud. The two ministers said that the OPEC+ alliance is solid, with the level of cooperation within it strong. The recent OPEC+ decision to accelerate the production increase and roll back all cuts in August, a month earlier than initially planned, was pushed by Saudi Arabia amid U.S. pressure. But the Kingdom had to check with Russia first before proposing the redistribution of the September increase in July and August, sources with knowledge of the behind-the-scenes diplomacy told Reuters this week. Both the Saudis and Russia benefit from the OPEC+ deal, so Riyadh wants to keep Russia on board, the sources say. “The Saudis are enjoying high prices while the Russians need guaranteed support from OPEC+ in the current circumstances,” a source familiar with Russian thinking told Reuters. “No one is interested in a market collapse,” added the source. After the production cuts are completely rolled back next month, a more difficult decision for OPEC+ looms: what to do next as Russia is more than 1 million bpd behind target and could lose more supply as the EU embargo on its oil begins at the end of this year. Neither is OPEC+ as a group anywhere close to reaching its target production, nor has Saudi Arabia much spare capacity left to boost production further, as the U.S. and other major consumers want. Per the OPEC+ deal, the Saudi target (as well as Russia’s) is at 11.004 million bpd for August. The Kingdom has rarely reached this level, and not for a sustained period of time. So, it’s not certain that the Saudis have the ability to pump 11 million bpd or more on a sustainable basis. It’s even less certain that the Kingdom can quickly tap—if it wanted to—into the 12.2 million bpd production capacity it claims it has. NN: OPEC is in tall cotton. They are not going to change a winning play book.If the world is silly enough to create energy shortages thinking they are punishing Russia…. OPEC, the Saudis and Russia et all are more then willing to accommodate them
US: Now not the time for Russia-Ukraine talks
Now is not the right time for the resumption of peace negotiations between Russia and Ukraine, United States National Security Council’s Strategic Communications Coordinator John Kirby (pictured) told Fox News on Sunday. The US will “continue to make sure” that Ukrainian President Volodymyr Zelensky “can succeed on the battlefield so that he can succeed at the [negotiating] table,” Kirby noted, adding that the Russian government does not seem “interested” in peace talks. However, Kremlin spokesman Dmitry Peskov said earlier in the day that Moscow has “no doubt that sooner or later common sense will prevail” and that negotiations will restart even though “Western countries are betting on the continuation of the war.” NN: Gog Magog anyone?
US closes volatile session higher, Dow up 300 pts
Wall Street ended the final trading session of the week with gains after spending a part of the day below the flatline, possibly due to data reports demonstrating a significant slowdown in manufacturing activity and a decline in construction spending. In business news, Novavax said it expects to have the Omicron-targeting coronavirus vaccine in the fourth quarter, FTX will buy BlockFi, GM and Honda’s US subsidiary warned about supply problems, while activist investors reportedly requested an SEC investigation into Tesla. The Dow Jones Industrial Average index was up 1.05%, or 322 points, at the close with McDonald’s, its best performer, rising 2.46%. The Nasdaq 100 grew 0.71% at the end of the trading session as DocuSign jumped 6.69%. The S&P 500 closed with a 1.06% gain. Etsy pulled the index up, advancing 9.02%. The euro was 0.53% lower compared to the dollar to change hands for 1.04290 at 3:59 pm ET. NN: The CHOP SHOP…… it slices it dices… i fell like we are in side a Veg-O-matic juicer. Incredible swings on incredible volume.. Usually a sign of a TEMPORARY bottom. We are getting our asses kicked…… Now that we have our 2 part authentication set up i can provide detail streaming TV again. Hackers have been particularly active especially from Russia.
Biden admin to allow oil and gas leases in Gulf of Mexico
- The Biden administration released a five-year plan on Friday that would block all new offshore oil drilling in the Atlantic and Pacific oceans, while allowing some drilling in the Gulf of Mexico and the south coast of Alaska.
- The proposed plan, which has not been finalized, could allow up to 11 lease sales over the next five years. It also includes an option for the administration to conduct no sales.
- The Department of the Interior is inviting the public to comment on the program.
The Biden administration released a five-year offshore oil and gas drilling development plan on Friday that would block all new drilling in the Atlantic and Pacific Oceans within U.S. waters, but would allow some lease sales in the Gulf of Mexico and the south coast of Alaska. The proposed plan, which has not been finalized, could allow up to 11 lease sales over the next five years. It also includes an option for the administration to conduct no sales. The Department of the Interior is inviting the public to comment on the program.
Biden had vowed to suspend all new federal drilling on public lands and waters, but that position resulted in legal challenges from several Republican-led states and the oil sector.
As U.S. energy prices rise, the fossil fuel sector has urged the administration to increase offshore drilling in an effort to lower gas prices at the pump. But climate groups have argued that new lease sales would exacerbate climate change while doing nothing to bring down prices. A recent report published by Apogee Economics and Policy said that a temporary suspension in new offshore oil and gas sales would have minimal impact on gas prices for consumers — with prices edging up by less than 1 cent per gallon over the next nearly two decades. “From Day One, President Biden and I have made clear our commitment to transition to a clean energy economy,” Interior Secretary Deb Haaland said in a statement on Friday. “Today, we put forward an opportunity for the American people to consider and provide input on the future of offshore oil and gas leasing.” The Interior’s most recent offshore oil and gas auction was in November in the Gulf of Mexico. A court order later vacated the sale, arguing the administration didn’t adequately account for the harm to the environment and impact on climate change. Nearly 95% of U.S. offshore oil production and 71% of offshore natural gas production occurs in the Gulf of Mexico, according to the Natural Resources Defense Council. Roughly 15% of oil production in the U.S. comes from offshore drilling. Environmental groups on Friday condemned the administration for proposing limited new lease sales instead of announcing a ban on all new drilling. “The Biden administration had an opportunity to meet the moment on climate and end new offshore oil leasing in Interior’s five-year program,” said Drew Caputo, vice president of litigation at Earthjustice. “Instead, its proposal to serve up a bunch of new offshore oil lease sales is a failure of climate leadership and a breach of their climate promises.” Environmental groups have also argued that new leasing would impede the White House’s goal to slash carbon emissions by at least 50% by 2030 in an effort to keep global warming under 1.5 degrees Celsius. “This draft plan falls short of what we desperately need: an end to new oil and gas drilling in federal waters,” Food & Water Watch Executive Director Wenonah Hauter said in a statement. “President Biden has called the climate crisis the existential threat of our time, but the administration continues to pursue policies that will only make it worse.” NN; A global crises has been created because the politicians would not accept natural gas and nuclear energy as a bridge to a renewable future. And to add insult to injury they have allowed a cruel dictator to make Europe his energy bitch. In the middle of energy crises they embargo payments to and fuel from Russia. Not only enriching Russia but exasperating the energy crises they already had.
Dubai Is the Newest Hedge Fund Hotspot
After attracting crypto firms, property investors and Russian billionaires, Dubai is drawing a new crowd: hedge fund managers. Englander’s Millennium Management has grown its staff in the Dubai International Financial Centre to about 30 since securing a license in 2020. Michael Gelband’s ExodusPoint Capital Management, one of the largest multi-strategy hedge funds in the world, registered in the DIFC in June, according to a filing. All Blue Capital ditched its London headquarters to base itself in the city, where it now has almost half its global staff. Michael Platt’s private investment firm BlueCrest Capital Management is also expanding in the emirate, with former Citadel money manager Chris Wheeler among those hired. They are part of a growing clutch of firms choosing to expand in the sun-splashed business hub. Brexit has spurred many funds to seek new bases outside the City of London, while some traders have fled Hong Kong’s strict Covid restrictions. And with living costs soaring around the world, Dubai’s tax-free welcome mat has seldom looked so appealing. “We are in a unique situation where the classic financial centers are disintegrating,” said Tom Kirchmaier, professor at the Centre for Economic Performance at the London School of Economics. “Living in Dubai — that’s now come down to personal preferences with low taxes, good infrastructure and low regulation.” For fund managers making the move, the city offers a fertile ground of high net worth individuals and institutional investors. The United Arab Emirates is set to attract a net inflow of 4,000 millionaires this year, the most of any country globally, according to consultancy Henley & Partners. Higher oil prices are another draw. Crude above $100 a barrel is buoying Gulf economies and markets, prompting the region’s sovereign wealth funds to invest the windfall at home and abroad. “It’s not a coincidence that you have a lot of asset managers and hedge funds and other institutional investors that actually moved or set up offices in the region here,” Arshad Ghafur, Bank of America’s president for the Middle East and North Africa, said at DIFC Fintech Week. “That’s to really capitalize on what’s happening here.” The latest push includes a fresh slate of inducements. The Dubai International Financial Centre is offering reduced licensing fees and capital requirements for hedge funds domiciling a domestic fund. Firms within the center manage around $450 billion worth of assets, according to DIFC Authority CEO Arif Amiri. A team from the business hub recently completed a roadshow in San Francisco and New York to attract more firms. “In our recent US roadshow, we engaged with some of the largest hedge funds in the world,’’ Amiri said. “The pandemic broke the conceptual relationship between `what’ you do and `where’ you do it. Millennium, which has about $55 billion assets under management, is actively looking to further grow its presence in Dubai, according to people with knowledge of the matter. It has hired Dean Cooper from UBS Group AG, who will move to Dubai from London as the firm expands its emerging markets operations there, people familiar with the matter have said. BlueCrest, which runs Platt’s wealth and that of his partners, is expanding to have 10 people, including at least three portfolio managers, according to people with knowledge of the matter. The firm plans to open an office in the financial district and trade imminently, said the people, who asked not to be identified because the details are private. London-based Carrhae Capital, an equity hedge fund, is in the process of opening an office in Dubai and currently seeking regulatory approvals, according to a person with knowledge of the matter. The firm, which manages about $800 million, will be moving two investment professionals to the city and the decision is primarily driven by the time zone advantage the firm will get for its emerging markets focused research and trading, the person added. Dubai in recent months has been taking steps to attract foreign talent just as rigid Covid-19 rules and the increasing influence of mainland China lessens the appeal of Hong Kong, which has lost thousands of professionals to other centers. “It makes sense with lockdowns in Asia that financial centers like Dubai are becoming a destination for hedge funds,” said Whitney Baker, the New York-based founder of Totem Macro and former head of emerging markets at Bridgewater Associates. While favorable immigration policies and regulation makes it easy for firms to set up business in the city, they also come with risks. Dubai is coming under increasing international scrutiny for its struggles in combating money laundering. The global financial crimes watchdog, the Financial Action Task Force, in March placed the UAE on its gray list. The Gulf state has also emerged as a preferred destination for Russia’s wealthy even as other jurisdictions increasingly sanction and shun them. Matt Novak, managing partner of All Blue Capital, a global investment firm overseeing about $5.7 billion, moved his firm’s headquarters to Dubai from London in March and expects to have almost 30 members of its roughly 80-person team based in the city by the end of the year. “The Dubai government was very clever in its approach to Covid,” he said. “They made it easy for us to conduct business and bring over staff. It’s no wonder they attracted us and many of the industry’s juggernauts.”
US closes volatile session higher, Dow up 300 pts
Wall Street ended the final trading session of the week with gains after spending a part of the day below the flatline, possibly due to data reports demonstrating a significant slowdown in manufacturing activity and a decline in construction spending. In business news, Novavax said it expects to have the Omicron-targeting coronavirus vaccine in the fourth quarter, FTX will buy BlockFi, GM and Honda’s US subsidiary warned about supply problems, while activist investors reportedly requested an SEC investigation into Tesla.The Dow Jones Industrial Average index was up 1.05%, or 322 points, at the close with McDonald’s, its best performer, rising 2.46%. The Nasdaq 100 grew 0.71% at the end of the trading session as DocuSign jumped 6.69%. The S&P 500 closed with a 1.06% gain. Etsy pulled the index up, advancing 9.02%. The euro was 0.53% lower compared to the dollar to change hands for 1.04290 at 3:59 pm ET.
baha us tech 100
US Treasury yields fall after PCE report
United States Treasury yields fell on Thursday after the country’s Bureau of Economic Analysis revealed that the core personal consumption expenditures price index rose 4.7% in May, which was less than the analysts’ expected. The figure affects the Federal Reserve’s decisions on monetary policy, as the bank considers it as its main inflation indicator. After briefly falling under 3%, the lowest since June 10, the return on the 10-year Treasury note declined 8.9 basis points to 3.004% at 10:48 am ET. At the same time, the yield on the two-year note decreased 8.3 basis points to 2.97%, while the return on the 30-year bond contracted by 7.1 basis points to 3.141% at 10:48 am ET. NN: As we been reporting we expect a temporary reprieve as the rate of inflation decreases. One of the big problems is its really complicated for the FED with limited tools to engineer a soft landing. It as as difficult a market they you will ever see. Having said that we have confirmation…. The bond market has peeked for now and the yield cure is back.
Wall Street ends mixed with GDP data in focus
Indexes on Wall Street ended Wednesday’s session mixed after the US Bureau of Economic Analysis said that the American economy contracted by 1.6% in the first quarter of 2022. Investors also digested comments from Federal Reserve Chair Jerome Powell on inflation. The Dow Jones gained 0.26% with McDonald’s, up 2.02%, leading the games. The Nasdaq 100 added 0.18%. Monster Beverage Corp. was the best performer as its shares rose 2.80%. The S&P 500 lost 0.07%. The euro slid 0.74% against the dollar to sell for 1.04414 at 3:58 pm ET. NN: The PCE data tomorrow could put the FED on hold. Like a condemned mans stay of execution is not to be confused with a pardon….
Wild ride tomorrow on PCE Inflation Report
Tomorrow coulkd be a key day for the stock market. We get Initial Jobless Claims, PCE inflation, and Chicago PMI data. The short term tend of the markets could fall into sharper focus as a result. The Federal Reserve is known to look at the Michigan and Conference Board surveys for insights, but PCE inflation in particular is seen as the Fed’s favorite inflation metric—and investors and the Fed still want to know if inflation has reached a peak. The Conference Board said that in the past month, purchasing intentions for cars, homes, and major appliances held “relatively steady—but intentions have cooled since the start of the year.” The report’s morning release turned the market around on the dime, reversing all major indexes that were up at least 1% after the open. Other analysts speculated that market liquidity has been low for some time now, and many investors are simply not looking to take on risk until conditions become clearer. We also have S&P500 portfolio rebalancing wrapping up for June and the second quarter on Thursday, that may introduce another level of volatility tomorrow. NN: i sure as hell do not want to be short the market tomorrow. Portfolio rebalancing is the old trick. Where the popular indexes simply throw out the losers and put in a new crop of winners. That is the reason they can tell the suckers the market always comes back after a sell off. Unfortunately the poor bastard whose IRA, 10k and retirement funds can not do that. They have to book the loses. That is why retirement funds are down as much as 50%. But for traders rebalancing is usually a market positive event. Because index funds have to buy the share of stocks entering the indexes they are suppose to track. As far as the PCE index its the Feds favorite way to look at inflation. My sniff is it will moderate giving hope to the markets that the FED will not beat them up to badly with massive future rate hikes. And as far as the Michigan consumer index, i feel that report will indicate the spending happy American consumer will continue spending, traveling and eating themselves into oblivion. At least for now.