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Goldman Sachs Sees a $75 Floor for Brent Oil Prices

Goldman Sachs expects a $75 per barrel floor under Brent Crude prices that is unlikely to be breached due to the current macroeconomic fears of a U.S. recession. Oil prices slumped by 6% in the past few days, dragged down by weaker-than-expected jobs data in the U.S. on Friday, which sparked a massive selloff in equity markets globally and in risk assets, including crude oil. Early on Tuesday, Brent Crude prices were down by 0.43% on the day to $75.96 as of 8:37 a.m. EDT, following two consecutive daily declines on Friday and Monday. Recession fears triggered an exit and added to the perceived weak demand for Chinese oil to weigh on the petroleum futures.

However, Goldman Sachs says that the recession risk is still limited, demand in the West and India remains strong, and the speculative positioning of traders is very low. All these factors support the investment bank’s view that oil will find support in the coming weeks.

“While the increase in recession risk following the weak U.S. July employment report and the impact of volatile financial conditions on oil demand further skew the risks to our $75-90 range for Brent prices to the downside, especially in 2025, our base case remains that oil prices will find support in coming weeks,” Goldman Sachs analysts wrote in a note dated Monday. Goldman put out a $75-$90 range to its Brent forecast earlier this year. “Brent crude touched its USD 75 floor before bouncing back with focus on geopolitical developments and OPEC+ response to the latest drop,” Saxo Bank analysts wrote in a note early on Tuesday. According to ING commodities strategists Warren Patterson and Ewa Manthey, “Investors have been exiting commodities in recent weeks, highlighted in positioning data and this has continued in recent days.” “ICE data shows that aggregated open interest in ICE Brent has fallen by more than 8% since mid-June. This souring in speculative appetite comes despite oil fundamentals still looking supportive,” they wrote in a Tuesday note. NN: I could not be any clearer. I put out a very clear reco:  BUT THE SHIT OUT OF OIL

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Banks Sweeping Dead Property Loans Under the Persian Rug

 

Under the new system, in place at most large companies since 2020, lenders from day one are supposed to continuously estimate their credit losses over the life of a given instrument, be it a loan or bond. The threshold for recording losses is supposed to be much lower—when they are “expected,” rather than waiting until losses probably happened. This was supposed to lead to more aggressive, and more timely, loss recognition. The office-loan market is testing investors’ faith in the new expected-loss model. As with other commercial properties, loan payments on office buildings often are interest-only until maturity. When rates were ultralow, many lenders and borrowers went into these loans assuming they would be refinanced rather than paid off at the end. That would mean no defaults as long as they could keep rolling over the loans. The pandemic sent office values in many big cities tumbling as more people worked from home. Now, for many borrowers, refinancing isn’t an option because the buildings are worth less than the borrowers owe. That makes defaults inevitable. Until then, though, the owners still may be current on their payments. Hope springs eternal, until it doesn’t.

In a July 24 note, Pimco’s John Murray and François Trausch warned of a $1.5 trillion wall of maturities for commercial real-estate loans over the next two years. “Lenders and borrowers will be forced to ‘face the music,’” they wrote. If they are right, it would mean the expected-loss model hasn’t been working as billed. Lenders still have wide discretion to delay officially expecting red ink if they would prefer not to expect it.

At New York Community Bancorp NYCB , credit losses on commercial real-estate loans, including office loans, have surged in the past few quarters, raising questions about why management took so long to identify them. A bigger concern should be the losses at other lenders that aren’t yet visible to outsiders. Noted short seller Carson Block, in a report last December, predicted large credit losses would soon swamp  nonbank commercial real-estate lender. The company at the time called his report “self-interested and misleading” and said it was “well positioned to navigate this environment.” Then in July, it cut its dividend and posted its third consecutive quarterly net loss. Credit losses last quarter were so large that they exceeded the company’s net interest income.

Curiously, default rates have been higher for property loans backing widely held commercial-mortgage-backed securities than for the same types of loans on banks’ balance sheets. That underscores how traditional lenders have more flexibility to help borrowers work out their problems than do the vehicles that issue commercial-mortgage-backed securities, which can’t so easily “extend and pretend.” Banking regulators have said they are aware there is a problem, while also assuring the public that this won’t be another 2008. An interview that Federal Reserve Chair Jerome Powell gave to CBS’s “60 Minutes” in February is worth revisiting. Asked about banks’ office loans, he said, “There will be expected losses. It feels like a problem we’ll be working on for years. It’s a sizable problem.” The irony of that statement: If Powell was right about the losses then, under the expected-loss model, banks probably should have booked them already. NN: This will be the greatest real  estate wipe  out and banking failure of our time.

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Israel, Mideast Markets Fall on Iran Threat, Global Stock Plunge

Financial markets across the Middle East tumbled Monday, as concerns over a potential Iranian attack on Israel added to bearish sentiment spawned by the ongoing global equity rout. Israel’s equity benchmark, the TA-35 Index, slid as much as 3.1%, to trade at the lowest since February, extending last week’s 3.3% slide — the biggest weekly loss since last October. The shekel fell as much as 1% against the dollar to trade nearly at a nine-month low, while its $3 billion eurobond maturing 2023 was quoted lower.The latest losses were sparked in part by an Axios report that US Secretary of State Antony Blinken had told his G-7 counterparts that Iran and its ally Hezbollah could attack as early as Monday. Citing three unidentified sources briefed on the call, Axios said Blinken saw the attacks starting in the next 24 to 48 hours.  However, regional markets were also feeling the heat from a global selloff that’s been fueled by signs of a worse-than-expected US economic slowdown. The growth concerns also weighed on oil prices, sending crude futures to a seven-month low.  The Saudi Tadawul Index and Egypt’s Hermes benchmark shed as much as 3.7% and 5.8% respectively. Turkey’s Borsa Istanbul 100 Index was the hardest hit, sliding more than 7% at one point.  “There remains much greater risk to asset prices in Israel, Lebanon, and Iran, with the latter fully sanctioned for foreign investors anyway, than anywhere else in the region,” he added. But with the conflict threatening to escalate, markets will likely remain under pressure. The shekel was down for the sixth straight day, while the Egyptian pound slid as much as 1.6% against the dollar to trade at a five-month low. Yields on Egypt’s May 2050 dollar bonds exceeded 12%, advancing for the sixth day to their highest level since February, according to data compiled by Bloomberg.

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Gallant: Army should be ready for ‘quick transition to offense’

Israel’s Defense Minister Yoav Gallant said on Monday that the country’s military should be prepared for a “quick transition to offense” in case of an anticipated Iranian and Hezbollah attack on Israel, following last week’s Israeli strikes on Beirut and Tehran. “Our enemies are carefully considering their steps thanks to the abilities you have demonstrated in the last year. However, we must prepare for all possibilities, including a quick transition to offense,” Gallant stated during his visit to the Israel Defense Forces (IDF) headquarters in Tel Aviv. Previously, sources told Axios that the United States and Israeli officials expect Iran to carry out its retaliatory attack on Israel on Monday.

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Users report issues with online trading platforms

Numerous users reported issues with the online trading services of Fidelity Investments, The Charles Schwab Corporation, and The Vanguard Group Inc., Downdetector’s data showed on Monday. Most problems reported include mobile brokerage and online brokerage. Meanwhile, Fidelity acknowledged the issue in a post on X, formerly Twitter. The news came amid a drop in the prices of cryptocurrencies linked to a plunge in Wall Street.

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Iran says it does not want regional escalation but must ‘punish’ Israel

DUBAI, Aug 5 (Reuters) – Iran is not looking to escalate regional tensions but believes it needs to punish Israel to prevent further instability, the foreign ministry spokesperson said on Monday, following the killing of Hamas leader Ismail Haniyeh in Tehran last week.
“Iran seeks to establish stability in the region, but this will only come with punishing the aggressor and creating deterrence against the adventurism of the Zionist regime (Israel),” Nasser Kanaani said, adding that action from Tehran was inevitable. Kanaani called on the United States to stop supporting Israel, saying the international community had failed in its duty to safeguard stability in the region and should support the “punishment of the aggressor.” The Islamic Revolutionary Guards Corps’ top Commander Hossein Salami on Monday reiterated the elite group’s threat that Israel “will receive punishment in due time”. Tehran and Iran-aligned groups such as Hamas and Hezbollah have accused Israel of killing Haniyeh on 31st July. Israeli officials have not claimed responsibility. NN: Says the head of a murdering regime. Wakes up every day screaming death to Israel… Death to America. Who supplies weapons to murdering terrorist organizations the world over.
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Egypt to reportedly not back Israel if Iran attacks

The Egyptian government held a conversation with Israeli officials in which withdrew any military support to defend Israeli territory in case Iran decided to perform a retaliatory attack after the killing of Hamas political leader Ismail Haniyeh. According to The Times of Israel on Monday citing Qatari media sources, Egypt also informed Tehran that it would prohibit any military activities in its airspace that could jeopardize regional stability. Egyptian officials clarified to their Iranian counterparts that this decision should not be seen as an act of hostility towards Iran, but as a measure to protect Egypt’s sovereignty.  The discussions with both parties allegedly took place during a meeting in Cairo.

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Oil nears 8-month low on US recession fears….. Ignores coming war in the Middle East

Oil extended losses from the lowest close in seven months as a selloff in wider financial markets countered rising tensions in the Middle East, with traders watching for a potential retaliatory strike on Israel by Iran. Brent futures slipped below $76 a barrel — erasing this year’s gains — after closing at their lowest since early January on Friday. West Texas Intermediate dropped below $72. A rout in global equities worsened on Monday on concerns around the economic outlook. Still, the market is bracing for a possible attack from Iran and regional militias against Israel in retaliation for assassinations of Hezbollah and Hamas officials. The US has sent defensive reinforcements to the region.

Oil has notched four weeks of declines on signals of faltering demand in the US and China, with the Asian nation rolling out plans to spur domestic consumption over the weekend. OPEC+ supply cuts and concerns the conflict in the Middle East could impact production from the region had supported prices. “While there are growing demand concerns, geopolitical risks continue to hang over the oil market,” Warren Patterson, head of commodities strategy at ING Groep NV in Singapore, said in a note. He added that an escalation in the Middle East may lead to short-term volatility, but a disruption to crude supply is needed to see sustained price strength. US Secretary of State Antony Blinken told his G-7 counterparts on Sunday that an attack on Israel by Iran and Hezbollah could begin as early as Monday, Axios reported, citing three unidentified sources briefed on the call. The US doesn’t know the exact timing, Blinken said but sees the strikes starting in the next 24 to 48 hours, according to the report.

Saudi Arabia raised the price of its flagship crude to Asia for the first time in three months, a tentative sign that the kingdom remains confident about demand in the region. It made significant cuts for Europe and the US.

Libya’s internationally recognized government alleged “political blackmail” as production began to be cut at the OPEC nation’s largest oil field. Production at Sharara has dropped by at least 50,000 barrels a day to 210,000 since employees received orders to trim the southern field’s output on Saturday night, according to people familiar with the matter. They asked not to be identified as they aren’t authorized to speak to the media. The North African nation is split between dueling administrations in the capital in the west, Tripoli, and a rival in the east. It wasn’t immediately clear what prompted the decision or whether output would be further curtailed. NN: The great oil giveaway. Make sure you get some.

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Israeli military: 30 rockets launches from Lebanon overnight…….Biden ‘hopes’ Iran won’t launch revenge attack on Israel…… American Lefties NOW Selling Out Israel

 

The Israeli Defense Forces (IDF) shared on Sunday that 30 rockets were launched from the Lebanese territory at the Israeli border town of Beit Hillel. According to the Israeli military, most of the rockets were intercepted by air defenses, with one hitting the Beit Hillel and some falling in the open areas. The Israeli forces also launched retaliatory airstrikes targeting the positions used by Hezbollah militants in southern Lebanon. No casualties have been reported so far.

Biden ‘hopes’ Iran won’t launch revenge attack on Israel

United States President Joe Biden expressed hope that Iran will refrain from responding to Israel’s attack which killed Hamas political leader Ismail Haniyeh in Tehran. In response to a journalist’s question about whether Iran would stand down from seeking revenge for Haniyeh’s killing, Biden said, “I hope so. I don’t know.” Meanwhile, top officials from the United States and Israel have indicated that they expect Iran to launch a retaliatory attack on Israel as soon as Monday in response to the deaths of Hezbollah senior commander Fuad Shukr and the Hamas political leader. NN Audio file:

Lefty Liberals WOK, LGBT, fagots, HOMO, COMMIES, Selling OUT Israel and you

 

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US allegedly looking to send more fighter jets to Middle East……US The USS Abraham Lincoln Carrier Strike Group

The United States is planning to send more combat aircraft to the Middle East amid rising tensions, the New York Times reported on Friday citing American officials. One military official revealed that the country’s forces located in the aforementioned region are taking “necessary measures” to boost combat readiness and defend both the US and its partners from potential attacks Iran and its proxies might conduct. Another source shared that the number of additional planes is yet to be decided. Furthermore, Defense Secretary Lloyd Austin is yet to give his final blessing for the motion. Meanwhile, Department of Defense Deputy Press Secretary Sabrina Singh said that the US plans to bolster “force protection” in the Middle East.

USS Lincoln Carrier Strike Group to deploy to the Middle East

West Coast carrier USS Abraham Lincoln (CVN-72) is setting sail to the Middle East from the Pacific to relieve the carrier USS Theodore Roosevelt (CVN-71) and its strike group. Meanwhile, the Navy is sending additional ships to the region following threats from Iran, Pentagon officials announced on Friday evening. “To maintain a carrier strike group presence in the Middle East, the Secretary has ordered the Lincoln Carrier Strike Group to replace the Theodore Roosevelt Carrier Strike Group, currently on deployment in the Central Command area of responsibility,” reads the Pentagon statement. Secretary of Defense Lloyd Austin, “has ordered additional ballistic missile defense-capable cruisers and destroyers to the U.S. European Command and U.S. Central Command regions. The Department is also taking steps to increase our readiness to deploy additional land-based ballistic missile defense.” The U.S. moves to bolster military presence in the Eastern Mediterranean and the Middle East follows reports that Iranian military officials and proxy forces in Lebanon, Iraq and Yemen will meet to discuss options to retaliate against Israel following the killing of Hamas leader Ismail Haniyeh in Tehran. “Iran and the resistance members will conduct a thorough assessment after the meeting in Tehran to find the best and most effective way to retaliate against [Israel],” a senior Iranian official told newswire Reuters. The Pentagon also announced the deployment of unspecified fighter squadrons headed to the region.“The Secretary of Defense has reiterated that the United States will protect our personnel and interests in the region, including our ironclad commitment to the defense of Israel,” reads the statement from the Pentagon.