Author: BlackMask Financial

NEW YORK (Reuters) – Oil prices on Tuesday climbed to their highest since 2014 as possible supply disruption after attacks in the Middle East added to an already tight supply outlook. Brent crude futures rose 35 cents, or 0.4%, to $86.83 a barrel by 1:36 p.m. EST (1836 GMT). U.S. West Texas Intermediate (WTI) crude futures rose 88 cents, or 1.1%, to $84.70 a barrel. During the session, both benchmarks touched their highest since October 2014 with Brent at $88.13 and WTI at $85.74. Supply concerns mounted this week after Yemen’s Houthi group attacked the United Arab Emirates, escalating hostilities between the Iran-aligned group and a Saudi Arabian-led coalition. After launching drone and missile strikes that set off explosions in fuel trucks and killed three people, the Houthi movement warned it could target more facilities, while the UAE said it reserved the right to “respond to these terrorist attacks.” The strike on a leading Gulf Arab ally of the United States takes the war between the Houthi group and a Saudi-led coalition to a new level, and may hinder efforts to contain regional tensions as Washington and Tehran work to rescue a nuclear deal. “The damage to the UAE oil facilities in Abu Dhabi is not significant in itself, but it raises the question of even more supply disruptions in the region in 2022,” said Rystad Energy’s senior oil markets analyst Louise Dickson. “The attack raises the geopolitical risk in the region and may signal the Iran-U.S. nuclear deal is off the table for the foreseeable future, meaning Iranian oil barrels are off the market, boosting demand for similar grade crude originating elsewhere,” Dickson added. UAE oil company ADNOC said it had activated business continuity plans to ensure uninterrupted supply of products to its local and international customers after an incident at its Mussafah fuel depot. Also adding to geopolitical price premiums are rising tensions between Ukraine and OPEC+ member Russia. Supply concerns have been brewing as some producers within the Organization of the Petroleum Exporting Countries are struggling to pump at their allowed capacities under the OPEC+ agreement with Russia and allies to add 400,000 barrels per day each month. OPEC on Tuesday stuck to its forecast for robust growth in world oil demand in 2022 despite the Omicron coronavirus variant and expected interest rate hikes, predicting the oil market would remain well supported through the year. Goldman Sachs analysts said they expect oil inventories in OECD countries to fall to their lowest since 2000 by the summer, with Brent oil prices rising to $100 later this year. NN: Insanity…… The oil market is way overdone on the upside. Its begging us to short it. And we will soon accommodate them.

Europe’s largest economy, Germany, is expected to become a net importer of electricity in 2023 for the first time since 2002 due to retiring coal plants and the nuclear phase-out, the International Energy Agency (IEA) said at the weekend.

Germany plans to switch off all its remaining nuclear power generators by the end of 2022, while it will also retire a large portion of its coal-fired capacity fleet between 2022 and 2024. Recently, the country has said it would aim to phase out coal by 2030 – eight years ahead of earlier plans. The coal exit for Germany could be more difficult than in other European economies, because the country plans to phase out nuclear power generation by the end of this year. The new coalition’s agreement in Germany includes, for example, the accelerated phase-out of coal—if possible by 2030—and the faster expansion of renewable energy, the IEA said in its Electricity Market Report – January 2022 published today. Germany’s remaining nuclear capacity, which provided about 12 percent of total generation in 2021, is due to be phased out by the end of 2022. At the same time, some coal capacity is due to be retired according to the approved coal phase-out plans. Coal capacity is set to decline from 35 GW at the end of 2020 to 30 GW in 2022 and less than 26 GW in 2024, the IEA noted. The timing of Germany’s nuclear phase-out and accelerated coal phase-out coincides with the ongoing energy crisis in Europe, where natural gas and power prices have jumped to record amid insufficient supply of gas and uneven wind power generation in northwest Europe, including in Germany.

The rebound in coal-fired generation in 2021 and the phase-out of nuclear capacity mean that electricity sector emissions increased last year for the first time since 2013 (up 17 percent) and might only fall below the 2020 level again in 2024, the IEA said.

Coal-fired generation in Germany is set to drop in 2023 and 2024 due to retiring coal plants, the nuclear phase-out, the net importer status of Germany, and expected higher gas-fired generation due to a continuing increase in the competitiveness of gas compared to coal, according to the IEA. NN: This shows you the danger of climate extremist. And proves they refuse to follow the data. Germany is shutting down super polluting coal fired electric generators. A good move. But in their insanity they are also shutting down non polluting nuclear. Net result they cannot meet their energy needs. So here is the back room deal they refuse to acknowledge. They will have to import energy from the Euro grid. In their case the power will come from coal fired plants in Poland…….. And if Putin cuts off their gas they are royally screwed…….

The US Centers for Disease Control and Prevention updated its mask information for the American public on Friday, including clarifying that certain types of masks and respirators offer more protection from the coronavirus than others and offering tips on what consumers should look for when shopping for them. “Masking is a critical public health tool to prevent the spread of COVID-19, and it is important to remember that any mask is better than no mask,” the CDC said in a statement. The updated guidelines recommends that Americans wear the most protective mask or respirator they can find that fits well and that they will wear consistently. “Some masks and respirators offer higher levels of protection than others, and some may be harder to tolerate or wear consistently than others,” the new guidelines say. “It is most important to wear a well-fitted mask or respirator correctly that is comfortable for you and that provides good protection.” The information was last updated in October. CDC Director Dr. Rochelle Walensky said Wednesday that the agency was planning to update the information to reflect the options that are available to people and the levels of protection different masks provide. “Loosely woven cloth products provide the least protection, layered finely woven products offer more protection, well-fitting disposable surgical masks and KN95s offer even more protection, and well-fitting (National Institute for Occupational Health and Safety)-approved respirators (including N95s) offer the highest level of protection,” the CDC says. The updated guidelines note that “a highly protective mask or respirator may be most important for certain higher risk situations, or by some people at increased risk for severe disease.” This includes:

Masks still aren’t recommended for children under 2, but the CDC “recommends universal indoor masking for all teachers, staff, students, and visitors to K-12 schools, regardless of their vaccination status or the area’s transmission rates.” The updated guidelines offer tips for getting a better fit and more protection, such as:

The CDC says consumers looking for masks that meet quality standards can look for certain labels like “meets ASTM F3502” or “meets workplace performance,” and they can go to a National Institute for Occupational Safety and Health website to get more information on personal protective equipment The agency also says certain respirators don’t meet international standards and has links to sites for more details. Specially labeled “surgical” N95s “should be reserved for use by healthcare personnel,” the CDC says.”These updates to our webpage reflect the science on masking, including what we have learned in the past two years,” the agency said in the statement. “We will continue to share the science of masking as it becomes available.” NN: As you know we have been raising hell about the bullshit coffee filter paper and toilet paper masks… The N95 has been PROVEN TO BE A JOKE. HOW ARE ALL THESE HOSPITAL WORKERS GETTING INFECTED… ITS THE PIECE OF SHIT MASKS. For a FACT to our knowledge NO ONE in a hospital setting that uses are UPLA mask has ever tested positive. As i lay in my bed at night i cannot help wondering how many lives could have been saved if the FUCKS would just tell the truth. N95 Mask no not work. You need a silicon rubber seal around your face and a UPLA filter like is used in biolabs. I could not find them so i made them. Medical personnel in a covid unit and operating room should have a power hooded power mask with UPLA cartridge filters. Click here if you want to get the most protective mask you can get.

Most protective mask you can get

NN: Even people with mild infections are getting brain damage. Now when you consider that most people we know are stupid to begin with, all this will do is make matters worse.

SEOUL: North Korea tested a railway-borne missile in its firing drills on Friday, state media KCNA said on Saturday, marking its third weapons test this month, which triggered a US push for fresh sanctions against the isolated state. South Korea’s Joint Chiefs of Staff said it had detected what it presumed were two short-range ballistic missiles launched eastward from North Pyongan Province on the northwest coast of North Korea. The official KCNA news agency said a firing drill was held to “check and judge the proficiency in the action procedures of the railway-borne regiment”, which the country tested for the first time last September, designed as a potential counter-strike to any threatening forces. It was the third time North Korea has launched ballistic missiles since New Year’s Day, an unusually rapid pace of weapons tests. The previous two launches involved what state media called “hypersonic missiles” capable of high speeds and manoeuvring after launch. The drill came just hours after Pyongyang slammed a US pursuit of new UN sanctions over a series of recent launches as a “provocation” and warned of a strong reaction. North Korean leader Kim Jong-un did not attend the drill. KCNA said it was held “at short notice” from the military’s general staff but the regiment precisely struck the target set in the east coast with “two tactical guided missiles”. The regiment “demonstrated high manoeuvrability and rate of hits”, and discussed ways to “set up proper railway-borne missile operating system across the country”, KCNA said. North Korea has defended the missile tests as its sovereign right to self-defence and accused the US of intentionally escalating the situation with new sanctions. Washington condemned the latest launch, saying it posed a threat to Pyongyang’s neighbors and the international community, while reiterating calls for a restart of stalled denuclearisation talks. NN:  Kin Yon NUM Chucks is making amazing strides. Obviously he does not give squat about sanctions. He will only be stopped by force…

Despite multiple signals from the U.S. oil industry that it will continue treating the oil price recovery cautiously, signs are emerging that production growth is accelerating in some key locations, notably the Permian.

Reuters reported this week, citing frac spread data from Tudor, Pickering, Holt and Co, that the rate of oil well completions in the Permian had risen by 5 percent in December.

Frac spreads, or the pumping of water and chemicals into the wells to release the oil—the actual hydraulic fracturing—are one of the last stages in a well completion, the report noted.

What this likely means is that consistently higher oil prices have finally proven too alluring to resist. Financial discipline and shareholder returns are all respectable priorities, but with global demand for oil seen strong despite the surge in new Covid-19 cases and with supply disruptions elsewhere, U.S. oil is gaining further prominence. And so is Permian oil. “Contrary to typical seasonal norms, U.S. frac spread count posted healthy month on month improvement during the month of December, driven near entirely by continued strength in the Permian,” said Tudor, Pickering, Holt and Co analyst Taylor Zurcher in a note, as quoted by Reuters. Indeed, according to the Energy Information Administration, the Permian will continue driving overall U.S. oil production growth. The shale play already accounts for the bulk of oil output in the Lower 48, which will this month exceed 5 million bpd, bringing the total Lower 48 output to 8.44 million bpd. This will, in turn, contribute to U.S. oil production reaching a record-high next year, again according to the Energy Information Administration. In its latest Short-Term Energy Outlook, the authority forecast that total U.S. oil output will reach an annual average of 12.4 million bpd in 2023, which will be the highest on record, after in 2019, the country booked an annual average of 12.3 million bpd. Last year, the annual average dropped to 11.2 million bpd because of the pandemic. Bank of America seems to concur with the Tudor, Pickering, Holt and Co data. The bank this week forecast a 22-percent increase in drilling and completions spend this year in the United States and a 25-percent increase globally. According to the bank, U.S. onshore oil production will rise by 900,000 bpd in 2022, all coming from the Lower 48. At some point, this growing U.S. oil production might begin to weigh on oil prices, but it will be a while before this happens, it seems. Right now, prices are getting a boost from production and export disruptions in Libya, the unrest in Kazakhstan, and worries about OPEC running out of spare production capacity. However, the EIA has forecast that the average annual prices this year will be lower than last year’s. In its STEO, the EIA forecast Brent crude averaging $75 per barrel this year and WTI trading at $71.32 per barrel. This will further decline to $68 per barrel for Brent and $63.50 per barrel in 2023. The agency cited rising global oil inventories and an expected slowdown in demand growth. According to the EIA, the gap between supply and demand this year will be 1.9 million barrels daily, with supply growing by 5.5 million bpd and demand by 3.6 million bpd. The agency did not provide the basis for this forecast. One of the biggest achievements of the shale oil industry was boosting production efficiency considerably between the last two cycles. Oil that wasn’t profitable ten years ago is profitable now. This means that more U.S. shale drillers will be comfortable with lower oil prices now than they were before. Still, the cautious approach is likely to continue: the memory of the demand destruction that the pandemic wrought on the global industry is still fresh. NN: OPEC is making the same mistake again. Contrary to popular spin banks are loaning money to frackers and they are gearing up… Most loan deals have a hedging production clause. So inverters are guaranteed a return even WHEN NOT IF prices collapse because of over production. We are getting close to starting shorting operations in oil.

(Bloomberg) — Henry Kaufman is one of the rare Wall Street veterans who can authoritatively draw parallels between the inflation scare of the 1970s and today’s alarming run-up in prices. And he has zero confidence Chair Jerome Powell’s Federal Reserve is ready for the battle it now faces. Kaufman decades ago was the celebrated chief economist at Salomon Brothers nicknamed “Dr. Doom.” He correctly anticipated the era’s crippling inflation and approved when then-Fed Chairman Paul Volcker delivered the so-called Saturday Night Special, a radical — and unexpected — tightening of monetary policy on an October weekend in 1979. To Kaufman, Powell is no Volcker. Not even close. “I don’t think this Federal Reserve and this leadership has the stamina to act decisively. They’ll act incrementally,” Kaufman, 94, said in a phone interview.

“In order to turn the market around to a more non-inflationary attitude, you have to shock the market. You can’t raise interest rates bit-by-bit.”

Powell this week told lawmakers in congressional testimony that there’s a “long road” toward getting Fed policy to a “normal” setting — suggesting more aggressive action isn’t needed to pull down inflation. Powell said the planned withdrawal of stimulus “should not have negative effects on the employment rate” — a big contrast with the Volcker-era tightening that contributed to a surge in joblessness. A more serious pledge to tame inflation would require the Fed going much further, Kaufman said. Volcker’s 1979 decision to restrict the supply of money drove short-term rates to excruciating levels but, eventually, also crushed inflation. Prices, rising at an annual 14.8% in March 1980, were ticking up at just 2.5% a year by July 1983. Volcker emerged a hero. “It requited a lot of fortitude in 1979 to do what the Fed did,” Kaufman said.

Now, inflation is again roaring back. From an average of 1.7% in the 10 years through 2020 — below the Fed’s 2% objective — it jumped to a four-decade high of 7% last month.

If he were advising Powell, Kaufman said he’d urge the Fed chair to be “draconian,” starting with an immediate 50-basis point increase in short-term rates and explicitly signaling more to come. Plus, the central bank would have to commit in writing to doing whatever is necessary to stop prices from spiraling higher. That’s a stark contrast with market and economist expectations for the Fed to wait until March to start boosting its key rate, and then only by a quarter point. Even with several doses of strong medicine, it would take at least a year for inflation to moderate to 3%, Kaufman said. The median forecast of economists surveyed by Bloomberg is for consumer prices to rise by less than 3% by year-end,

“The longer the Fed takes to tackle a high rate of inflation, the more inflationary psychology is embedded in the private sector — and the more it will have to shock the system,” Kaufman said.

Kaufman was born in Germany during the Weimar Republic and fled the Nazi regime in 1937. He earned a PhD in banking and finance at New York University, worked for the Fed as an economist and then, over a quarter century at Salomon, became Wall Street’s authority on the bond market and monetary policy. Others including former Treasury Secretary Lawrence Summers have said recently that the Fed is underestimating the challenge of bringing inflation under control. Kaufman’s perspective is distinguished by his being one of the few of the people who held senior roles on Wall Street in the late 1970s and is still closely studying the markets. Another such veteran is Byron Wien, Blackstone Inc.’s 88-year-old vice chairman of private wealth solutions. In his annual “Ten Surprises” note, posted this month, Wien and his colleague Joe Zidle predicted that “persistent inflation becomes the dominant theme,” the Fed is forced to raise rates four times in 2022 and the 10-year Treasury yield climbs to 2.75%. In Kaufman’s view, Powell made two key errors as Fed chief over the course of 2021. The first was attributing some inflation to direct and indirect effects of the Covid-19 pandemic, something he said is “impossible to measure” and thus unknowable with any precision. The second was calling it transitory.

“It’s dangerous to use the word transitory,” Kaufman said. “The minute you say transitory, it means you’re willing to tolerate some inflation.” That, he said, undermines the Fed’s role of maintaining economic and financial stability to achieve “reasonable non-inflationary growth.”

Powell told Congress in late November he would drop transitory from the Fed’s lexicon. By then, inflation had already reached 6.2% and some economists were scoffing at his continued use of the term. While Kaufman sees many reasons to draw lessons from the Fed’s experience in the 1970s, much is different now. For starters, the economy is booming, the unemployment rate is under 4% and stock indexes are close to records. In early 1980, even after Volcker’s policy move, prices were still rising so fast that Kaufman, at a bankers’ meeting in Los Angeles, called for the declaration of a national inflation emergency as well as temporary wage freezes and price controls. Today’s situation doesn’t warrant the same degree of alarm, he says. “That’s when prices reach levels where the average American realizes income is inadequate to cover inflation and that puts pressure on household spending and consumption,” he said. “It’s too early in the game.” NN: The Fed will soon panic. For over a year i have been screaming about the embedded inflation time bomb. Its over the biggest recession/depression will soon be upon us.

(Reuters) – Federal Reserve policymakers this week signaled they will start raising U.S. interest rates in March to battle inflation that’s eroding the value of workers’ recent wage gains and putting the policysetters under a political spotlight. In what were among the last public comments from U.S. central bankers before their next rate-setting meeting, Fed Governor Lael Brainard on Thursday became the latest and most senior U.S. central banker to signal the current era of near-zero interest rates will come to an end after two pandemic-shook years. The Fed “has projected several rate hikes over the course of the year,” Brainard told the Senate Banking Committee, which is considering her nomination by U.S. President Joe Biden to become the Fed’s vice chair. “We will be in a position to do that … as soon as our purchases are terminated,” she said, referring to a separate Fed asset purchase program that is due to end in March, opening the door to a possible rate increase at the Fed’s March 15-16 policy meeting. The Fed in December announced plans to buy its last tranche of government securities in February, sooner than it had projected just a month earlier.

With inflation rising 7% in December from a year earlier – the fastest pace in nearly 40 years – Fed policymakers are eager to do more, sooner, with rate increases expected in the coming months and plans to shrink the Fed’s nearly $9 trillion asset stash fast taking shape.

“We are clearly in a situation where the stance of monetary policy is wrong-footed” against inflation, Chicago Fed President Charles Evans said at an event hosted by the Milwaukee Business Journal on Thursday. He called the recent projection by policymakers for three quarter-percentage-point rate increases in 2022 “a good opening bid,” but added “it could be four if the data don’t improve quickly enough.” It was a common refrain this week as officials seemed to firm plans for an increase in borrowing costs in March and put the possibility of a fourth hike in 2022 into play. This week is the last before Fed officials enter a no-comment “blackout” period ahead of their Jan. 25-26 policy meeting. No policy change is expected then, as central bankers do not want to send confusing signals by raising rates while they are still buying assets, or risk market dislocations by abruptly ending the asset-buying program even earlier than projected. But Fed policymakers may use the session to lay further groundwork for a March “liftoff” from the near-zero policy rate maintained through the crisis triggered by the coronavirus pandemic “My forecast is that we’d have a 25-basis-point increase in March barring any changes in the data,” Philadelphia Fed President Patrick Harker said at a virtual event hosted by the Philadelphia Business Journal earlier on Thursday. “Lifting off in March… seems quite a reasonable thing,” San Francisco Fed President Mary Daly told Reuters on Thursday. Atlanta Fed President Raphael Bostic, St. Louis Fed President James Bullard and Cleveland Fed President Loretta Mester also flagged a March rate hike on Wednesday. In December, most Fed policymakers thought they would need to raise rates at least three times this year, but in recent weeks – with inflation remaining well above the central bank’s 2% goal and the labor market closing in on its full-employment goal – they’ve honed in on a March start. With that move now firmly on the table, several – including Brainard on Thursday – have also signaled they want to begin shrinking the Fed’s massive balance sheet this year. That would also remove policy accommodation and reduce downward pressure on long-term borrowing costs. Investors currently see an 86% probability that the Fed will raise its benchmark overnight lending rate at its March 15-16 policy meeting, according to CME Group’s FedWatch program. They are pricing in another three rate hikes this year. Earlier this week, Fed Chair Jerome Powell also threw his weight behind a firm tightening of monetary policy this year, arguing the strong economy no longer “needs or wants” as much stimulus despite the surge in COVID-19 cases due to the Omicron variant. Harker said on Thursday he sees the Fed beginning to reduce the size of its balance sheet in late 2022 or early 2023 and that its ultimate composition was still being debated. Harker said on CNBC Thursday afternoon that officials should start shrinking balance sheet runoff after interest rates are “sufficiently” above zero and that the glide path for reducing bond holdings should be “steeper” than it was the last time the Fed offloaded its assets. Governor Christopher Waller was way ahead of most of his colleagues in repeatedly calling last year for a March start to three rate hikes in 2022, and said Thursday a rapid-fire series of four or five rate hikes could be called for if inflation doesn’t recede. “Inflation has stayed higher for longer than any of us thought it was going to,” Waller told Bloomberg TV on Thursday. Once inflation gets down to 2.5% or so – which he expects by the end of this year — rapid rate hikes could no longer be needed, he said. Brainard, for her part, said the Fed will try to bring inflation down “as quickly as we can but consistent with a sustained and strong recovery.” NN: we have come a long way since transient. 40 years has taught me the FED always Always ALWAYS gets it wrong. The key take away is the FED always drives the economy into a recession when they raise rates. The housing boomis  reliant upon cheap money an the FED buying scrutinized mortgage paper. Debt market reliant upon free money and the fact the Fed has bought close to 10 trillion dollars in debt.  The stock market eats money. the rocket fuel of a stock market moon shot is money. No money no rally. Their is only one cure to inflation an that is higher interest rate and the selling off of the Fes balance sheet. And their is only one result of what is coming….. A recession and i mean a really ugly one.