SHANGHAI/SINGAPORE, Aug 21 (Reuters) – China cut its one-year benchmark lending rate on Monday as authorities seek to ramp up efforts to stimulate credit demand, but surprised markets by keeping the five-year rate unchanged amid broader concerns about a rapidly weakening currency. The recovery in the world’s second-largest economy has lost steam due to a worsening property slump, weak consumer spending and tumbling credit growth, adding to the case for authorities to release more policy stimulus. However, downward pressure on the yuan means Beijing has limited room for deeper monetary easing, analysts say, as a further widening of China’s yield differentials with other major economies could trigger yuan selloffs and capital flight. The one-year loan prime rate (LPR) was lowered by 10 basis points to 3.45% from 3.55% previously, while the five-year LPR was left at 4.20%. In a Reuters poll of 35 market watchers, all participants predicted cuts to both rates. The 10 bp cut in the one-year rate was smaller than the 15 bp cut expected by most poll respondents. “Probably China limited the size and scope of rate cuts because they are concerned about downward pressure on the yuan,” said Masayuki Kichikawa, chief macro strategist at Sumitomo Mitsui DS Asset Management. “Chinese authorities care about currency market stability.” Most new and outstanding loans in China are based on the one-year LPR, while the five-year rate influences the pricing of mortgages. China cut both LPRs in June to boost the economy. The medium-term lending facility (MLF) rate serves as a guide to the LPR and is widely read by markets as a precursor to future changes to the lending benchmarks. China’s central bank has also pledged to keep liquidity reasonably ample and its policy “precise and forceful” to support the economic recovery, amid rising headwinds, according to its second-quarter monetary policy implementation report. But the steady five-year tenor caught many traders and analysts off the guard, with some expecting the troubled property sector and rising default risks at some developers would have led to deeper cuts to the benchmarks. “We interpret the status quo of five-year LPR was a signal that the Chinese banks are reluctant to cut rates at the expense of rate differential margin,” said Ken Cheung, chief Asian FX strategist at Mizuho Bank. “It flagged a problem on the effectiveness of PBOC’s policy guidance pass-through into the market, and the Chinese authorities may be lacking effective tools to stimulate the property sector and economy via monetary easing.” Cheung added that the unexpected rate outcome should be “negative to China growth outlook and the yuan exchange rate”. The central bank said it will optimise credit policies for the property sector, while co-ordinating financial support to resolve local government debt problems, it said in a statement on Sunday. NN: Bottom line the Chinese economy is in recovery mode. Look you need to understand its a big big BIG economy. People are still shell shocked. They are spending on consumer items. But are now willing to commit to a mortgage or a new car. It will take some time for them to get their legs back.
Global oil demand hit a record high in June… On track for another record in August
Global oil demand hit a record high in June and could be on track for another record in August, the International Energy Agency (IEA) said in its latest monthly report. The cuts from OPEC+ and Saudi Arabia, coupled with expected continued strength in demand, are set to result in inventory draws for the rest of the year, supporting oil prices, analysts and forecasting agencies say. Across the global market, record crude demand has driven up the premiums that traders pay to get cargoes. The differentials for spot cargoes from the Middle East have surged in the past several days as buyers in China snap up supplies. In the North Sea, a vital trading window has seen a spate of bidding, while Asian buyers have also bought millions of barrels of US crude. Those are all signs that the latest cycle is off to a strong start, even as crude prices hit six-month highs last week.Brent crude has climbed almost 20 percent since late June. Across the global market, record crude demand has driven up the premiums that traders pay to get cargoes. The differentials for spot cargoes from the Middle East have surged in the past several days as buyers in China snap up supplies. In the North Sea, a vital trading window has seen a spate of bidding, while Asian buyers have also bought millions of barrels of US crude. Those are all signs that the latest cycle is off to a strong start, even as crude prices hit six-month highs last week.
London’s Brent crude has climbed almost 20% since late June, as Saudi Arabia and Russia prolong their voluntary supply curbs and further tighten international oil markets.
“The driver of the tightness is the Saudi production cut, with refineries looking for alternative barrels,” said Giovanni Staunovo, an analyst at UBS Group AG. “Demand is solid in large parts of Asia as well as the US, mostly mixed in Europe.” Chinese mega-refiner Rongsheng Petrochemical Co. secured millions of barrels from the spot market last week. That’s in addition to the nation’s refiners having been given about 40% more crude from the Saudis month-on-month for September loading after asking for extra barrels. Across Asia, plants already snapped up about 40 million barrels from US crude for November arrival this month in what’s seen as a robust pace of purchasing following the previous month’s massive buying spree. In the Middle East, the premium of Abu Dhabi’s Murban crude also soared against the Middle Eastern Dubai benchmark despite Asian buyers picking up comparable-quality West Texas Intermediate crude from the US earlier in the month. The premium was near $3 a barrel on the ICE Futures Abu Dhabi exchange on Monday, about 30 cents higher than the start of the month, according to PVM Oil Associates data compiled by Bloomberg. The more sulfurous and dense Upper Zakum also surged in early-cycle trading. Production cuts from the Organization of Petroleum Exporting Countries and its allies and steady price increases from Saudi Arabia have been a major driver behind the move, forcing refiners to hunt out supplies in key pricing regions. There have also been low-level disruptions in major producing nations from Nigeria to Kazakhstan, further tightening balances The OPEC+ cuts and subsequent price hikes have made medium-sour barrels like Norway’s Johan Sverdrup more expensive. That has led to a slow pace of sales for Northern Europe’s largest crude stream, and also pushed some buyers to seek cheaper light alternatives instead. Even so, grades like Forties that is part of a basket of crudes that makes up the Dated Brent — the world’s most important benchmark — has strengthened. Forties last traded at a premium of 85 cents a barrel to Dated Brent on Thursday on a pricing window run by S&P Global Commodity Insights, better known as Platts. This compares with a discount of 35 cents on July 31. “Much of the strength in global physical markets this year has been driven by the medium and heavy, sour barrel,” RBC Capital Markets LLC analysts including Michael Tran wrote in a report. “That said, key global light, sweet marginal barrels have shown strong signs of tightening so far in August.” The current enthusiasm may be reduced in coming months, however, as US fuelmakers, the largest buyers of crude after China, prepare to halt refineries for the upcoming fall turnaround season at a time when drilling in the Permian grows. The restart of oil sands production in Canada, which is undergoing summer maintenance, should also help to beef up supplies. NN: it shows you the short term view the markets take. After short term maintenance and change over to winter time fuels they will open up again and suck inventories dry. Less we forget the fact that OPEC+ Russia and Saudis understand refinery change over season since it happens times a year. AND they are hell bent on $100 oil.
Latest Alex Jones Conspiracy COVID Theory…. CRAP
Alex Jones claims the Biden administration is throwing the country into another covid lockdown this fall to win the elections
That would mean they are planning to lock down the entire population for a year…. Really!! Get this that is so the elections would be a mail in ballet which they could easily manipulate…… Give me a break!!
Another lock down would really piss off the masses and guarantee him a loss.
It gets even better. The deep state conspiracy that wants to makes us all their slaves has signed off on this plan according the Alex and his well placed in many cases he says governemnt informants.
I though you would want your slaves slaving away as starving workers making smart phones, mining lithium and trafficking in small children to meet the elites material demands and satisfy their blood lust.
BlackMask Pod Cast:
Their have always been conspiracies SO! Most you hear about are not true
U.S. Gas Prices Hit Year High As Markets Tightens
U.S. gasoline prices have surged to their highest level this year, continuing their relentless climb. National average gas prices in the United States have inched up to $3.873 per gallon from $3.564 a month ago, while a gallon of diesel now averages $4.338 from $3.851 a month ago. In California and Washington, prices have surged above $5 a gallon. Strong demand and a series of refinery outages are largely to blame for the recent rise, while tightening markets have also been pushing crude prices up. Delta’s 185,000-barrel-per-day refinery in Trainer as well as Irving Oil’s 320,000-barrel-per-day oil refinery in New Brunswick, Canada will be down for much of September and part of October, affecting about 9% of the product supplied in their regions.
“It is fairly abnormal to see prices going up” at this time of the year. We tend to see prices declining going into the fall,” Patrick De Haan, head of petroleum analysis at price tracker GasBuddy.com, has told Reuters.
Unfortunately for the U.S. motorist, Goldman Sachs has predicted that retail gasoline prices will average as high as $3.90 a gallon this month and could remain high as supplies remain tight. Weekly U.S. gasoline stockpiles remain below the five-year average of inventories throughout this year, putting more pressure on gas prices. Total U.S. gasoline stocks in the current month fell to 216.4 million barrels, the fifth decline in six weeks. But high gas prices are just part of the energy challenges facing the U.S. consumer. A summer of record-breaking heat has dramatically increased electricity consumption for Americans with many now struggling to keep up with their skyrocketing electric bills. According to the U.S. Energy Information Administration(EIA), the average household spends about $262 a year on air conditioning, with costs going as high as $525 in the hot and humid Southeast. NN: energy and food inflation is back. This will become even more apparent as wintertime heating season approaches and the fall harvest sees yields plunge because of the long hot summer.
US Treasury yields rise as Fed hints at more hikes
United States Treasury yields increased following the release of the Federal Reserve’s July meeting minutes on Wednesday, which revealed that officials might consider further tightening measures beyond the point which saw their key interest rate reach highest level since 2001. During the two-day meeting, the Federal Reserve officials unanimously voted in favor of putting the main interest rate in the range of 5.25% and 5.50%, citing the persistent elevation of the inflation rate and tight labor market in the United States. The yield on the two-year note rose 3.2 basis points to 4.9860% at 3:17 pm ET. The return on the 10-year Treasury note climbed 5.3 basis points to 4.2740%, and the yield on 30-year bond jumped by 5.3 basis points to 4.3720%. NN: The greatest debt orgy ever. IT twill Not result in inflation…. Just the opposite a massive deflation. Because treasury rates will do a moon shot. And then plunge. We well know this mechanism and we have been in and out of our beloved Zeroes over and over again. BlackMask Pod Cast:c
Zeroes are Heating Up Again
Saudi Arabia’s Crude Oil Exports Slump To 21-Month Low In June
- Saudi Arabia’s crude oil exports fell to their lowest level in 21 months in June according to the latest data from JODI.
- Saudi Arabia’s oil exports fell by 124,000 barrels per day from May, totaling just 6.80 million barrels per day.
- Saudi Arabia’s oil production is set to average around 9 million bpd in July, August, and September.
Saudi Arabia’s crude oil exports dropped in June to the lowest level in 21 months, the latest data by the Joint Organizations Data Initiative (JODI) showed on Wednesday. The Kingdom, the world’s top crude oil exporter, shipped 6.80 million barrels per day (bpd) of crude in June, down by 124,000 bpd compared to May, according to JODI, which compiles self-reported data from many countries. In May, Saudi Arabia’s oil exports plunged below 7 million bpd for the first time this year as the Kingdom and several other large OPEC+ producers began a collective cut of 1.6 million bpd in May. Per the JODI data released today, Saudi Arabia’s product inventories fell by 1.64 million barrels in June, while crude inventories built by 1.45 million barrels. Direct use of crude in direct burn for power in Saudi Arabia rose by 65,000 bpd to 543,000 bpd in June, per the JODI data. In June, Saudi Arabia’s crude oil production inched down by 3,000 bpd to 9.96 million bpd, the JODI data showed today. This was the lowest level of Saudi crude output in 19 months. Saudi oil production is set to average around 9 million bpd in July, August, and September after the Kingdom started a unilateral voluntary cut of 1 million bpd in July, “to support the stability of the oil market.” The unilateral cut was initially set to last in July, but was extended two times, once into August, and later into September.
Oil supply from the OPEC+ group dipped in July by 1.2 million bpd to 50.7 million bpd, the lowest level in nearly two years as Saudi Arabia began its production cut of 1 million bpd, the International Energy Agency (IEA) said last week.
Due to Saudi Arabia’s cut, the Kingdom’s crude oil production has now fallen below the production of Russia, the key partner of OPEC in the OPEC+ alliance. NN: The Saudi’s are planning for the production cuts to last. Key intelligence i have clearly shows not only are they producing less oil. But they are in a orderly shut down of key production wells. Meaning these production cuts could last a year or more.
API reports US oil inventories plunged again Down by 6.19M barrels… EIA confirms the drop reports crude inventories down by 6 million barrels
Crude oil inventories in the United States saw a large draw this week of 6.195 million barrels, the American Petroleum Institute (API) data showed on Tuesday Reserves in Cushing, Oklahoma fell by 1 million barrels. Gasoline stockpiles rose by 700,000 barrels, inventories are roughly 7% less than the five-year average for this time of year. Distillate inventories slipped by 800,000 barrels, according to the reported data. This is on top of the 2.093 million barrel draw in the week prior. Distillate inventories are 17% below their five-year average for this time of year and shrinking. Refinery output is dropping world wide because of the heat wave. Add to that the fact this is the time of year when refineries shut down for maintenance and reconfiguring their stacks to produce winter time gasoline and more heating oil. Refineries operated at 94.7% of their operable capacity last week, while gasoline production slowed, averaging 9.6 million barrels per day. Imports of crude oil in the country averaged 7.2 million barrels per day last week, rising by 476,000 barrels per day. Total commercial petroleum inventories slumped by 7.4 million barrels.
WTI drops over 2% on China demand concerns
Crude prices for front-month deliveries slid on Tuesday after worse-than-expected industrial production print in China seemingly raised concerns about the commodity’s demand in in one of the world’s biggest oil importers. Markets are unsure if current government intervention is enough to rejuvenate the country’s economy. The middle of August usually sees the lowest level of crude oil trading, both on the physical and paper sides. This month is no exception, with very little in the way of strong pricing signals and the key benchmarks mostly trending sideways. China has provided some bearish sentiment, however, with a further slowdown in industrial output weighing on oil prices on Tuesday morning. The Chinese Central Bank’s cutting of corporate lending rates to 2.5% helped to offset some of that downward pressure, but both WTI and Brent had fallen by more than 1% on Tuesday morning. NN: Nothing has changed…. Best to go to the beach and ignore oil market stupidness. Do not not move aggressively. See BlackMask Market News dated today.
EIA Sees Lower Shale Oil Production In September
HOUSTON, Aug 14 (Reuters) – Oil and natural gas output from top U.S. shale-producing regions is set to fall in September for the second straight month to the lowest levels since May,
Energy Information Administration data showed on Monday. Shale oil output is expected to fall to 9.41 million barrels per day (bpd) in September, EIA data showed. It had touched 9.45 million bpd in July, its highest on record. Crude output in the Permian Basin in Texas and New Mexico, the biggest U.S. shale oil basin, is expected to fall by nearly 13,000 bpd to 5.8 million bpd, the lowest since February.
Crude oil production in the South Texas Eagle Ford region is due to fall by 11,000 bpd to 1.11 million bpd, the lowest since December. However, production in the Bakken region of North Dakota and Montana is due to rise 3,600 bpd to 1.21 million bpd, the highest since November 2020. Total natural gas output in the big shale basins will also fall for a second month in a row, by about 0.15 billion cubic feet per day (bcfd), to 98.3 bcfd in September, its lowest since May, the EIA projected. That compares with a monthly gas output record of 98.5 bcfd in July. In the biggest shale gas basin, Appalachia in Pennsylvania, Ohio and West Virginia, output will fall to 35.75 bcfd in September, the lowest since May, the EIA said. Gas output in the Permian will rise to record high of 23.67 bcfd in September, while that from the Haynesville in Texas, Louisiana and Arkansas will edge down to 16.3 bcfd. The EIA said it expects new Appalachia gas well production per rig to climb to 23.78 million cubic feet per day (mmcfd) in September, the highest since May. New gas well production per rig in Appalachia hit a record of 33.3 mmcfd in March 2021. BlackMask Pod Cast:
Supply shortages are coming this fall
Five Americans for $6 Billion Ransom Payment So Iran Can Build Nukes
Five Americans who the U.S. says have been unjustly imprisoned in Iran for years may soon be freed under terms of a Biden administration deal worked out through Swiss intermediaries that would release several jailed Iranians and unfreeze Iranian oil revenues held by South Korea. The five, of which only three have been identified, are now under house arrest in a hotel in Tehran, but U.S. officials say the deal is not yet finalized. “My belief is that this is the beginning of the end of their nightmare,” said Secretary of State Antony Blinken. “It’s a positive step that they were released from prison and sent to home detention. But this is just the beginning of a process.” The office of Israeli Prime Minister Benjamin Netanyahu issued a statement on Saturday criticizing the deal between the United States and Iran made earlier this week. Iran agreed to release five imprisoned US nationals, while the US will unfreeze $6 billion in Iranian funds held in South Korea. Netanyahu’s office said the agreement “does not end Iran’s nuclear program and will only help to fund Iranian terror proxies.” It insisted that it could only support a deal that results in the dismantling of Iran’s nuclear program. BlackMask Pod Cast: