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Oil slides 2% as glut forecast, China virus overshadow Libya disruption

NEW YORK (Reuters) – Oil prices fell about 2% on Wednesday as a market surplus forecast by the International Energy Agency (IEA) and demand worries amid the outbreak of a virus in China outweighed concern over disruptions to Libya’s crude output. Brent crude LCOc1 was down $1.24, or 1.9%, at $63.35 a barrel by 1:49 p.m. ET (1849 GMT). West Texas Intermediate CLc1 fell $1.40, or 2.4%, to $56.98. The head of the IEA, Fatih Birol, said he expects the market to be in surplus by 1 million barrels per day (bpd) in the first half of this year. “Oil prices remain heavy on oversupply concerns and after the Saudi Energy Minister Price Abdulaziz did not offer any hints of optimism that the OPEC+ production cuts would be extended beyond March,” said Edward Moya, senior market analyst at OANDA in New York. “China’s coronavirus will likely see travel restrictions that could end up hurting demand for crude during a peak travel time in China.” Markets are also focusing on the emergence from China of a new coronavirus just ahead of the Lunar New Year holidays this weekend and the possible impact a pandemic might have on global economic growth. MKTS/GLOB] Deaths from the new flu-like virus in China rose to 17 with more than 540 cases confirmed, with cases now detected as far away as the United States. [Should the virus develop dramatically and hit travel and growth, demand for oil could fall by 260,000 bpd, Goldman Sachs said in a note. “Demand concerns over a potential epidemic will counter concerns around supply disruptions in Libya, Iran and Iraq, driving spot price volatility in coming weeks,” Goldman said, though the “impact on oil fundamentals remains limited so far”. Oil prices have been marginally supported after Libya’s National Oil Corp on Monday declared force majeure on the loading of oil from two major oilfields after the latest development in a long-running military conflict. Unless oil facilities return to operation quickly, OPEC member Libya’s crude output will be reduced to about 72,000 bpd from about 1.2 million bpd. “The Libyan pipeline blockade continued to have a muted impact on sentiment … There is a consensus that the disruption will prove short-lived,” said Stephen Brennock of oil broker PVM. Meanwhile, Kazakhstan has suspended its oil exports to China after contamination was found in crude supplied by a Kazakh producer less than a year after a ‘dirty oil’ crisis broke in neighboring Russia. Overall though, global supplies are likely to continue to rise, with U.S. crude production in large shale deposits expected to rise to record highs in February, though the pace of increase is likely to be the lowest in about year, the U.S. Energy Information Administration (EIA) said on Tuesday. U.S. crude inventories were likely to have fallen last week, a Reuters poll showed, but gasoline stocks are expected to have risen for an 11th week in a row. [EIA/S] Weekly U.S. energy reports have been delayed a day in observance of the Martin Luther King Jr. Day holiday on Monday. The American Petroleum Institute is scheduled to release its report at 4:30 p.m. on Wednesday, followed by official data at 11 a.m. on Thursday.

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Pandemic fears grow as China virus toll rises to nine

* Infections in China hit 440, with nine dead

* WHO says more cases expected

* China to restrict gatherings in Hubei

* Officials urged not to conceal information

* Travel warnings, North Korea bans foreign tourists

* Olympic boxing qualifying bouts cancelled in Wuhan

BEIJING/SHANGHAI, Jan 22 (Reuters) – Authorities in China and beyond stepped up efforts to control an outbreak of a new flu-like coronavirus on Wednesday as the death toll rose to nine with 440 confirmed cases, while suspicion grew that the virus crossed to humans from animals. China discouraged public gatherings in Hubei province, where the virus emerged last month, and tightened containment measures in hospitals, while the World Health Organization (WHO) was due to hold an emergency meeting to determine whether the outbreak constituted a global health emergency. The virus has spread from the central Chinese city of Wuhan, in Hubei, to Beijing, Shanghai, Macau, Hong Kong, and beyond to the United States, Thailand, South Korea, Japan and Taiwan. The Chinese government has provided updates on the number of cases in a bid to head off panic, as hundreds of millions of people prepare to travel at home and abroad for Lunar New Year celebrations starting this week. “The rise in the mobility of the public has objectively increased the risk of the epidemic spreading and the difficulty of prevention and control,” National Health Commission vice-minister Li Bin told reporters. There was evidence that the virus was being spread through “respiratory transmission”, Li said. And, the director-general of China’s Center for Disease Control and Prevention, Gao Fu, said virus was adapting and mutating, underscoring the challenges for health authorities. Some 2,197 people who came into contact with infected people were being kept in isolation, while 765 have been released from observation.”There has been a big change in the number of cases, which is related to our deepening understanding of the disease, improving diagnostic methods and optimising the distribution of diagnostic kits,” Li said.Symptoms of the virus, which can cause pneumonia, include fever, coughing and difficulty breathing. There is no vaccine for the virus, which can be passed from person to person. Fifteen medical personnel are among those infected in China. Fears of a pandemic similar to an outbreak of Severe Acute Respiratory Syndrome (SARS) that started in China and killed nearly 800 people in 2002-2003 have roiled global markets, with aviation and luxury goods stocks hit particularly hard and the Chinese yuan tumbling. Companies across China, from Foxconn to Huawei Technologies and HSBC Holdings, were warning staff to avoid Wuhan and handing out masks. Terry Gou, the billionaire founder of Apple supplier Foxconn, said he was advising company employees not to visit China over the holiday. WHO spokesman Tarik Jasarevic said new cases of the coronavirus would appear as China stepped up monitoring. Li said there was no evidence of “super-spreaders” capable of disseminating the virus more widely, as happened during the SARS outbreak. Health authorities are still trying to determine the origin of the virus, which officials say came from a market in Wuhan where wildlife was traded illegally. SARS was believed to have crossed to humans from civet cats sold for food in China. The WHO says an animal source appears most likely to be the primary source of this outbreak. Taiwan on Tuesday confirmed its first case of the coronavirus, a woman returning from Wuhan. The island’s president, Tsai Ing-wen, called on China to share “correct” information about the virus and for the WHO not to exclude Taiwan from collaboration on the outbreak for political reasons. Taiwan is not a member of the WHO due to the objection of China, which considers the island a Chinese province with no right to participate in international organisations unless it accepts it is part of China. Like Australia, Taiwan warned citizens to avoid Wuhan, while banning tour groups from the city. Airports around the world have stepped up screening of travellers from China. The Chinese-ruled gambling hub of Macau confirmed its first case of pneumonia linked to the coronavirus and tightened body-temperature screening measures in casinos and around the city. A first case of the virus emerged in nearby Hong Kong on Wednesday, media reported. The patient arrived in Hong Kong via high-speed railway from the mainland and had been quarantined, media said. The city’s commerce secretary, Edward Yau, said earlier authorities were on high alert. “The whole world is watching,” Yau told Reuters at the annual meeting of the World Economic Forum in Davos. Several foreign tour operators said North Korea banned foreign tourists from Wednesday due to the virus, losing one of its main sources of foreign currency. Some qualifying boxing matches for the 2020 Olympics set to take place in Wuhan in February had been cancelled, Japan’s Kyodo news agency said.

Hong Kong’s Cathay Pacific Airways Ltd said it would allow flight attendants to wear surgical masks while on mainland China flights. Cathay said rebooking, rerouting and refund charges would be waived for all tickets to or from Wuhan through Feb. 15. China’s aviation regulator has told mainland carriers to refund or change flights to Wuhan without charge.

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Why one stock-market bull says he’s taking the ‘offense off the field’

Some of the biggest names in the hedge-fund industry have been making the case in recent days that it is no time to pull back on stocks. David Tepper said he “loves riding a horse that’s running,” and Stanley Druckenmiller followed up to say he too is riding the proverbial horse. Even Paul Tudor Jones, who has embraced the analogies to the frothy stock market of 1999, says the current rally has a way to go. But not everyone wants to stay on the racecourse. Tony Dwyer, a longtime bull and strategist at brokerage Canaccord Genuity, is getting a little nervous and said it is time “to take offense temporarily off the field.” The market—and the information technology sector in particular—“have reached a point that warrants a change in view.” The S&P 500 IT sector SP500.45, -0.08%  has reached what he calls a “historically extreme level” for only the fifth time since 1990.

 “This really isn’t that complicated a call—info tech has led the market to a position that is excessive and has generated temporary pullbacks in the past,” he said in the call of the day.

Dwyer added the firm’s bullish case last year—more or less, to ignore the trade war because of the Federal Reserve’s dovish pivot, low inflation and solid U.S. economic growth—is now consensus. “These positive influences remain in place but are now considered likely by most, and have already been discounted over the near term given the upside. We will look to rotate more offensively again on any meaningful pullback in the market as long as our positive fundamental core thesis remains in place,” he said. Among companies that reported after the close on Tuesday, IBM IBM, +4.10%  topped forecasts on cloud and cognitive software revenue growth, and Netflix NFLX, -2.37%  reported strong international subscriber growth. Johnson & Johnson JNJ, -0.89%, the health care giant that edged past expectations with fourth-quarter earnings, headlines the 12 S&P 500 components reporting results. Tesla TSLA, +3.56%  rose in premarket trade. Wedbush analyst Dan Ives boosted his price target by nearly 50% , and Bloomberg reported, citing people familiar with the matter, that the electric vehicle maker has settled with Michigan over a lawsuit challenging a state ban on direct-to-consumer. A United Nations report is expected to say the phone of Amazon AMZN, -0.15%  chief Jeff Bezos was hacked after Saudi Crown Prince Mohammed bin Salman sent him a video message on WhatsApp. President Donald Trump made the rounds at Davos, telling CNBC that the Fed should cut interest-rates further because of dollar DXY, -0.06%  strength. After the 152-point retreat in the Dow Jones Industrial Average DJIA, +0.33%  on Tuesday, U.S. stock futures ES00, +0.34% YM00, +0.15%  were higher on Wednesday. Asian stocks ADOW, +0.62%  had a better day after heavy losses on Tuesday from the coronavirus spreading concerns. China reported the death toll at nine, with 440 confirmed cases. European stocks SXXP, +0.09%,  meanwhile, had little movement. Nick Note: SHORT THE SHIT OUT OF THIS CRAZINESS. Their comes a time when the bubble becomes so big it does not need a pin. Have you ever popped a balloon with a pin. Then you know how fast a bubble can burst. Sometimes you can burst a balloon with out a pin. How?  by simple blowing so much air in it that it bursts. This market looks like just such a situation…. It will be the main thrust of our trading efforts!

 

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Standoff: U.S. troops block Russian forces from capturing Syrian oil field

The Washington Times – Tuesday, January 21, 2020

U.S. troops last weekend reportedly found themselves in a standoff with Russian forces trying to gain access to key oil fields in northeastern Syria. The Saturday standoff — first reported by Turkish media outlets, citing unnamed local officials in the Turkey-Syria border region — seems to have ended without any shots being fired or any real risk of violence between the two sides. American military personnel reportedly stopped a Russian convoy near the town of Rmelan, and the Russian forces then apparently turned back and returned to their home base. Still, the near-clash serves as a reminder of the high stakes in Syria, where the U.S. military’s mission involves guarding oil fields and preventing them from falling into the hands of the Islamic State, Russian forces and other actors.Pentagon officials did not directly address the reported confrontation with Russian forces last weekend but said there is a focus on avoiding conflict with other “regional forces” in the area. “In Syria, the Coalition deconflicts military operations with other regional forces, in order to keep our troops safe,” Col. Myles B. Caggins III, spokesperson for the U.S.-led Operation Inherent Resolve, told The Washington Times on Tuesday. “We seek to deconflict our movements through pre-existing communication channels and interlocutors, in order to prevent unnecessary and unplanned military interactions, and de-escalate between forces when necessary.” Operation Inherent Resolve is the American mission to defeat the Islamic State in Syria and Iraq. The core U.S. mission in Syria remains the defeat of the Islamic State, along with the training of U.S.-backed regional forces also battling the Islamic State. But last year the Trump administration adjusted that mission. President Trump directed the Pentagon to assign U.S. troops to guard oil fields from the Islamic State, which used Syrian fuel as a key income source during its rise to power. The president suggested that U.S. energy companies eventually could take control of those oil fields and turn them into an American revenue source, though there’s no evidence that such a plan is coming to fruition. Pentagon officials have been well aware that the revamped mission in Syria could put the U.S. on a collision course with Russia. At a Pentagon news conference last October, Defense Secretary Mark T. Esper was pressed on whether the American mission includes preventing any Russian forces from taking control of Syrian oil. “The short answer is yes, it presently does,” Mr. Esper said in October. “We want to make sure the (U.S.-backed Syrian Democratic Forces) has access to the resources in order to guard the prisons; in order to arm their own troops; in order to assist us with the defeat of ISIS.” Mr. Trump has repeatedly tried to fully withdraw U.S. forces from Syria over the past 14 months but several hundred U.S. troops remain in the country.

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Oil slips on concerns new virus may curtail demand

SINGAPORE (Bloomberg) – Oil declined on concerns that a coronavirus outbreak in Asia could spread and curtail demand in a market that’s already contending with plentiful supplies. Futures slipped 0.8% to trade near $58 a barrel in New York. Goldman Sachs Group Inc. said prices could slip about $3 a barrel if an outbreak plays out in the same way as the SARS epidemic in 2003. Prices have so far shown only a limited response to the halt of exports from OPEC member Libya, as U.S. inventories are forecast to expand from already-comfortable levels.  “After the demand optimism we saw regained at the end of last year, we believe that much more aggressive demand worries are about to enter the market, at least in the short term,” said Helge Andre Martinsen, senior oil market analyst at DNB Bank ASA. Oil prices are slightly lower compared with the end of last year as crises threatening supplies in OPEC nations Libya, Iran and Iraq — as well as the signing of a preliminary trade deal between the U.S. and China — fail to provide lasting support. With the U.S. shale oil boom continuing, and being supplemented by offshore projects from the North Sea to Guyana, the world is “awash with oil,” according to the International Energy Agency. West Texas Intermediate futures fell 45 cents to $57.93 a barrel on the New York Mercantile Exchange as of 10:45 a.m. London time. Brent for March settlement lost 44 cents to $64.15 a barrel on the London-based ICE Futures Europe exchange.Oil demand may be curbed by 260,000 barrels a day on average if the outbreak spreads, Goldman said in a note, referencing the SARS impact in 2003 and translating that into a 2020 scenario. The peak travel season around Chinese New Year — which officially begins on Jan. 25 — “is a tremendous challenge, which could complicate the disease diffusion,” according to UBS Group AG. Economists warned that China’s fragile economic stabilization could be at risk if authorities fail to contain the new virus sweeping across Asia. “Airports were empty, hotel occupancy fell drastically and it had an impact on the economy,” Howie Lee, a Singapore-based economist at Oversea-Chinese Banking Corp., said of the 2003 SARS outbreak. In Libya, the U.S. embassy called for an immediate resumption of oil production, increasing pressure on eastern strongman Khalifa Haftar who has disrupted virtually all of the nation’s output.

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Killer coronavirus attacks the body with pneumonia – symptoms to look out for

A mystery coronavirus is sweeping through Asia, with reports in Thailand, Japan, the Philippines and South Korea. The superbug, which is similar to SARS, has already killed six people Trump vows that US will plant 1 trillion trees, Greta thunberg says that’s not enough Trump vows that US will plant 1 trillion trees, Greta thunberg says that’s not enough. A new strain of the deadly coronavirus was first recorded in the city of Wuhan last month, with subsequent reports in Thailand, Japan, the Philippines and South Korea. The number of confirmed cases of the superbug, which is a cousin of the SARS virus, stands at almost 300, however experts fear the actual figure could be in the thousands. Scientists at Imperial College London think that at least 1,700 people cold be infected in Wuhan alone. The new strain, called novel coronavirus or nCoV, is expected to spread rapidly this weekend amid Chinese New Year celebrations.

The superbug does not respond to antibiotics (Image: Universal Images Group via Getty Images)

Leo Poon, the virologist who first ‘decoded’ the infection, told CNN : “What we know is it causes pneumonia and then doesn’t respond to antibiotic treatment, which is not surprising, but then in terms of mortality, SARS kills 10 per cent of the individuals.” The virus has killed six people, according to local health officials. The World Health Organisation is due to host talks to decide whether the outbreak should be classed as a global health emergency. The virus was first discovered in an animal and it is not yet clear how it was transmitted to humans. Chinese officials say they have tracked the source of the outbreak to a Wuhan seafood market, which has been closed while an investigation is conducted. Coronavirus is very common with almost everyone suffering from it at one point in their lives, although the new strain can prove fatal. Early symptoms of the infection include coughing, fever and shortness of breath, although it can eventually lead to pneumonia, kidney failure and death.

Malaysian officials are using thermal scanners to check passengers arriving at Kuala Lumpur International Airport (Image: AHMAD YUSNI/EPA-EFE/REX)

People with weakened immune systems, babies and the elderly are particularly susceptible to the virus. Experts say UK airport checks would only detect those who have started to show symptoms. Dr Nathalie MacDermott, leading expert from King’s College London, previously said: “There is potential for exposure given the volume and frequency of international air travel and the potential for someone travelling from an affected region arriving in the UK prior to them developing symptoms. “This is where appropriate screening measures need to be in place for travellers from affected regions who become unwell with fever and respiratory symptoms. “Largely it would be something for a healthcare worker to consider if they had someone with respiratory symptoms who had history of contact with a confirmed case or travel to an affected region. “Airport screening can be limited in its efficacy as it screens for fever in people with a travel history to an affected area and is dependent on travellers having symptoms at the time they pass through the airport. Nick Note: At some point a world wide pandemic immune to antibiotics will kill hundreds  of millions of people. Is this the BIG one…. I do not know. But i can tell you this it will start out like this. Learn the tools you need to protect yourself form contagious diseases. I learned my lesson last winter. Hand washing masks and isolation of sick people is the norm around here. Hand sanitizers are everywhere. And as far as flying i call them the 747 disease incubators……

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Exclusive: Apple dropped plan for encrypting backups after FBI complained – sources

https://youtu.be/USWwN6g2oEs

SAN FRANCISCO (Reuters) – Apple Inc (AAPL.O) dropped plans to let iPhone users fully encrypt backups of their devices in the company’s iCloud service after the FBI complained that the move would harm investigations, six sources familiar with the matter told Reuters. The tech giant’s reversal, about two years ago, has not previously been reported. It shows how much Apple has been willing to help U.S. law enforcement and intelligence agencies, despite taking a harder line in high-profile legal disputes with the government and casting itself as a defender of its customers’ information.

U.S. President Donald Trump accused Apple on Twitter of refusing to unlock phones used by “killers, drug dealers and other violent criminal elements.” Republican and Democratic senators sounded a similar theme in a December hearing, threatening legislation against end-to-end encryption, citing unrecoverable evidence of crimes against children.

Apple did in fact did turn over the shooter’s iCloud backups in the Pensacola case, and said it rejected the characterization that it “has not provided substantive assistance.”

Behind the scenes, Apple has provided the U.S. Federal Bureau of Investigation with more sweeping help, not related to any specific probe.

An Apple spokesman declined to comment on the company’s handling of the encryption issue or any discussions it has had with the FBI. The FBI did not respond to requests for comment on any discussions with Apple. More than two years ago, Apple told the FBI that it planned to offer users end-to-end encryption when storing their phone data on iCloud, according to one current and three former FBI officials and one current and one former Apple employee. Under that plan, primarily designed to thwart hackers, Apple would no longer have a key to unlock the encrypted data, meaning it would not be able to turn material over to authorities in a readable form even under court order. In private talks with Apple soon after, representatives of the FBI’s cyber crime agents and its operational technology division objected to the plan, arguing it would deny them the most effective means for gaining evidence against iPhone-using suspects, the government sources said.

When Apple spoke privately to the FBI about its work on phone security the following year, the end-to-end encryption plan had been dropped, according to the six sources. Reuters could not determine why exactly Apple dropped the plan.

“Legal killed it, for reasons you can imagine,” another former Apple employee said he was told, without any specific mention of why the plan was dropped or if the FBI was a factor in the decision. That person told Reuters the company did not want to risk being attacked by public officials for protecting criminals, sued for moving previously accessible data out of reach of government agencies or used as an excuse for new legislation against encryption. “They decided they weren’t going to poke the bear anymore,” the person said, referring to Apple’s court battle with the FBI in 2016 over access to an iPhone used by one of the suspects in a mass shooting in San Bernardino, California. Two of the former FBI officials, who were not present in talks with Apple, told Reuters it appeared that the FBI’s arguments that the backups provided vital evidence in thousands of cases had prevailed. Once the decision was made, the 10 or so experts on the Apple encryption project – variously code-named Plesio and KeyDrop – were told to stop working on the effort, three people familiar with the matter told Reuters.

Apple’s decision not to proceed with end-to-end encryption of iCloud backups made the FBI’s job easier.

The agency relies on hacking software that exploits security flaws to break into a phone. But that method requires direct access to the phone which would ordinarily tip off the user, who is often the subject of the investigation. Apple’s iCloud, on the other hand, can be searched in secret. In the first half of last year, the period covered by Apple’s most recent semiannual transparency report on requests for data it receives from government agencies, U.S. authorities armed with regular court papers asked for and obtained full device backups or other iCloud content in 1,568 cases, covering about 6,000 accounts. Had it proceeded with its plan, Apple would not have been able to turn over any readable data belonging to users who opted for end-to-end encryption.

Backed-up contact information and texts from iMessage, WhatsApp and other encrypted services remain available to Apple employees and authorities.

Apple is not the only tech company to have removed its own access to customers’ information. In October 2018, Alphabet Inc’s (GOOGL.O) Google announced a similar system to Apple’s dropped plan for secure backups. The maker of Android software, which runs on about three-quarters of the world’s mobile devices, said users could back up their data to its own cloud without trusting the company with the key. Two people familiar with the project said Google gave no advance notice to governments, and picked a time to announce it when encryption was not in the news. The company continues to offer the service but declined to comment on how many users have taken up the option. The FBI did not respond to a request for comment on Google’s service or the agency’s approach to it. Nick Note: You got to be out of your mind to use the CLOUD for ANY of your data. DO NOT DO IT. You will lose everything you terrorists……….. YOU HAVE BEEN WARNED!

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Oil slides as IEA surplus forecast overshadows Libya disruption

LONDON (Reuters) – Oil prices fell on Wednesday as an International Energy Agency (IEA) forecast of a market surplus in the first half of 2020 outweighed concerns about disruptions that have slashed Libya’s crude output. Brent crude LCOc1 was down 43 cents, or 0.7%, at $64.16 a barrel at 0941 GMT. West Texas Intermediate CLc1 also fell 43 cents to $57.95 a barrel, having declined 0.3% the day before. The head of the IEA, Fatih Birol, said he expects the market to be in surplus by one million barrels per day (bpd) in the first half of this year. “I see an abundance of energy supply in terms of oil and gas,” Birol told the Reuters Global Markets Forum on Tuesday, while attending the World Economic Forum meeting in Davos. “It’s the reason that recent incidents we have seen – with the Iranian general killed, Libya unrest – didn’t boost international oil prices,” Birol said, referring to the U.S. killing of an Iranian commander and retaliation by Tehran that boosted prices briefly earlier this month. Libya’s National Oil Corp on Monday declared force majeure on the loading of oil from two major oilfields after the latest development in a long-running military conflict. Unless oil facilities quickly return to operation, Libya’s oil output will be reduced about 72,000 barrels per day (bpd) from about 1.2 million bpd. Financial markets are also watching the emergence from China of a new strain of a coronavirus and the possible impact which a pandemic might have on global economic growth.[ Should the new virus develop dramatically and hit travel and growth, demand for oil could fall by 260,000 bpd, Goldman Sachs said in a note. “Demand concerns over a potential epidemic will counter concerns around supply disruptions in Libya, Iran and Iraq, driving spot price volatility in coming weeks,” Goldman said, although the “impact on oil fundamentals remains limited so far.” Supply is still likely to rise, with U.S. crude production in large shale deposits expected to rise to record highs in February, although the pace of increase is likely to be the lowest in about year, the U.S. Energy Information Administration (EIA) said on Tuesday. Inventories of crude oil in the U.S. are likely to have fallen for a second week last week, according to a Reuters poll, although gasoline stocks are forecast to have risen for an 11th week in a row. [EIA/S] Nick Note: The forces affecting oil are balanced on a knifes edge. I can make a case for oil going either way. Which means its a 50/50 proposition. Very fair odds. I don’t do fair or balanced. I need a 70%+ conviction rate to initiate a trade. And I want to be asshole…. You remember where that  no dick no money broker tells you… Why that’s a stupid trade and GET OUT GET OUT before your wiped out. I am sure some of you have gotten those kind of calls. Usually right before the market trades our way and we make ANOTHER killing. So be patient my predator friends and soon the food animals will appear again so we can eat their lunch… Dinner and desert……

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Russia plans to show OPEC+ compliance by excluding a key metric

MOSCOW (Bloomberg) – For the first time in Russia’s alliance with OPEC, the country is changing the way it makes oil-production cuts. This quarter, Russia — one of the architects of the original deal to curb oil output between the Organization of Petroleum Exporting Countries and its allies — will be allowed to exclude a type of light oil called condensate from the production data it submits to the group. The cartel has always excluded condensates from members’ production volumes, so it was an anomaly for it to be included for the other members of the OPEC+ group. This should help improve its implementation with the pact which has been insufficient throughout 2019 as its total crude and condensate output hit a post-Soviet record. Compliance with the deal has been patchy within Russia and Rosneft PJSC has criticized it saying it’s contrary to Russian interests. Monitoring compliance may now become even more challenging for Russian-oil watchers. Condensates are hydrocarbons which below ground are in the form of a gas but then condense into a liquid when they reach the earth’s surface. They are usually stabilized before being transported, by removing any remaining gas and very light liquids. They can then be blended with crude, processed to make petrochemicals or other high-value fuels or exported. Novatek PJSC exports stabilized condensates from its Yamal LNG project and processes most of the stable condensate from other operations in Ust-Luga on Russia’s Baltic Sea coast, with the remaining volumes sold in Russia and abroad. Russia’s condensate output has been growing as the nation’s biggest gas producers, Gazprom PJSC and Novatek, brought new fields online and ramped up output at existing ones. It’s part of a strategy to boost both piped and liquefied natural gas exports from Russia to Europe and Asia. This rising output has put pressure on Russia’s compliance with the OPEC+ deal, its currently acting energy minister Alexander Novak said in November. The country argues that its condensate, which accounts for 7%-8% of total oil output, should be also excluded from its production cuts target because countries within the cartel don’t include it. OPEC agreed, and during its December meeting allowed all non-OPEC allies to exclude condensate from their production data. It will, according to the country’s energy ministry. Excluding condensate, Russia’s production cut in December was 234,000 barrels a day, compared to the crude-only level for October 2018, the government said in a statement. That’s a deeper reduction than the nation was required to make under the OPEC+ deal. If you include condensate, the figure was 72,000 barrels a day above its output target.

Russia failed to fully comply with the pact for most of 2019, with condensate growth just one of the reasons given by the government. At the December OPEC+ meeting, Novak said exclusion of condensate is not a loophole allowing Russia to pump more oil and still claim compliance with the deal.

Under the new deal, lasting through March, Russia pledged to deepen its crude-only production cuts to some 300,000 barrels a day, from the revised October 2018 baseline which excludes condensate. Excluding condensate will make it more difficult to independently assess Russia’s implementation the OPEC+ deal. Previously, Russian oil-watchers — including Bloomberg — calculated the country’s output and compliance using detailed data from the Energy Ministry’s CDU-TEK unit. However, those figures don’t break down the split between condensate and crude. The ministry has promised to give the market data relevant to the new deal. Yet in December it didn’t disclose outright production numbers for crude and condensate, only the increase or decrease in output for each variety of oil. Separately, Novak told reporters the October 2018 baselines against which those changes are measured. This patchwork of data does allow oil watchers to know the following: In October 2018 Russia pumped 10.626 million barrels a day of crude and 795,000 barrels a day of condensate, according to Novak. As of December 2019, crude production had fallen 234,000 barrels a day from this level and condensate output had risen by 58,000 barrels a day, according to the ministry. The current output-cuts deal will be implemented throughout the first quarter of 2020. OPEC+ will decide on the future of the agreement at the beginning of March. If the pact is extended past then, and to include only crude output, knowing data on Russia’s total oil production is still useful for a wider understanding of its oil industry.  have. Nick Note: Talk about liars poker. Production cuts are like dick size. Everyone claimes more then the really have. In the case of OPEC member claim bigger cuts then they are actually making. As expected size matters especially when we are talking oil production cuts.

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China mystery virus claims sixth victim as holiday travel stokes risk

https://youtu.be/B19xC6Vxvj0

BEIJING (Reuters) – – The death toll from a mysterious flu-like virus in China climbed to six on Tuesday as new cases surged beyond 300 and authorities fretted about the added risk from millions of Chinese travelling for the Lunar New Year holiday. Round the world, airports tightened screening of travellers from China as officials confirmed the coronavirus strain is contagious between humans. The World Health Organization (WHO) called a meeting for Wednesday to consider declaring a global health emergency. The outbreak, which began in the central city of Wuhan, also sent shivers through financial markets as investors recalled the fallout from China’s Severe Acute Respiratory Syndrome (SARS) outbreak in 2002/2003 that it initially covered up. The SARS coronavirus killed nearly 800 people then. “We’ll stay at home during the holiday. I’m scared as I remember SARS very well,” said Zhang Xinyuan, who had been bound from Beijing for the Thai resort of Phuket before she and her husband decided to cancel their air tickets. Authorities have confirmed more than 300 cases in China, mostly in Wuhan, a provincial capital and transportation hub, where the virus may have originated at a seafood market. There have been six deaths in that city, Mayor Zhou Xianwang told Chinese state television on Tuesday. The virus has been spreading around other parts of China, however, including five cases in the national capital Beijing. Fifteen medical personnel are among those infected. Abroad, Thailand has reported two cases and South Korea one, all involving Chinese travellers from Wuhan. Japan and Taiwan also confirmed one case each, both nationals who had been to Wuhan. “Information about newly reported infections suggest there may now be sustained human-to-human transmission,” said WHO’s regional director for the western Pacific, Takeshi Kasai. Taiwan, the self-ruled island that China claims as its own, on Monday set up an epidemic response command centre. More than 1,000 beds were prepared in isolation wards in case the virus spreads further. Though the origin of the virus was yet to be identified, WHO said the primary source was probably animal. Chinese officials have linked the outbreak to Wuhan’s seafood market. The virus can cause pneumonia, with symptoms including fever and difficulty in breathing. As those symptoms are similar to many other respiratory diseases, extra screening is needed.

“The outbreak of a SARS-like coronavirus in Wuhan is developing into a major potential economic risk to the Asia-Pacific region now that there is medical evidence of human-to-human transmission,” said Rajiv Biswas, Asia Pacific Chief Economist for IHS Markit.

So far, the WHO has not recommended trade or travel restrictions but such measures could be discussed at Wednesday’s meeting. Airports in the United States, Australia and across Asia have begun screening passengers from Wuhan. In the city itself, officials have been using infrared thermometers to screen passengers at airports, railway stations and other passenger terminals since Jan. 14. The Lunar New Year is a major holiday for Chinese, many of whom travel to join family or have a foreign holiday. Nick Note: This bears watching. Your flue vaccine will not protect your from this one. As a matter of fact not much else this year. Masks and constant hand sanitizing is the order of the day. No one gets in my office with the sniffles and M.r FLIR cameras automatically take everyones temperature. You may laugh but gasping for air like a fish out of the water is not a fun way to die.