No Where to Hide… Bloomberg

by Jim Colburn • Sunday, July 31, 2016

Bloomberg reports on major oil company woes:

“Welcome to year two of a supply overhang so persistent it’s upsetting industry expectations that the market would return to a state of balance between production and demand. It’s left analysts befuddled and investors running to the doorways as the crude market threatened to tip into yet another bear market, dashing hopes that a slump that began in mid 2014 would show signs of abating.”

They include a chart of Exxon’s earnings:

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I think they are missing the story… Amazingly, some major international energy companies are still showing a profit!

And, I don’t understand the focus by financial news on defining bull and bear market by a 20% move.. According to above, we are about to tip into another bear market?  After dropping from $100 per barrel, a move from $27 to $32.40 is considered a bull market?  It makes no sense..

Here is the link to the Bloomberg article:

http://www.bloomberg.com/news/articles/2016-07-29/exxon-mobil-profit-slumps-as-global-oil-glut-spreads-to-fuel

 

 

 

 

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Atlanta Fed Was Closer to the Mark… Bloomberg

by Jim Colburn • Friday, July 29, 2016

In our blog, we have been tracking the Atlanta Fed’s GDPNow which updates current quarter GDP estimates after various economic releases… Here is Bloomberg on how well they did:

“Traders who ignored the Federal Reserve Bank of Atlanta’s GDPNow second-quarter forecast for the U.S. economy can only blame themselves. The regional bank lowered its outlook for gross domestic product Thursday — to 1.8 percent growth at an annualized rate — after receiving an inaugural batch of data from the Census Bureau. GDP today came in at a 1.2 percent rate for the quarter, trailing the median estimate of economists, who had called for a 2.5 percent pace.”

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I like to look at the Fed’s GDP estimates to get a sense of how important the many economic data points released are to the big picture… Who needs an in house economist?

http://www.bloomberg.com/news/articles/2016-07-29/atlanta-fed-was-closer-to-the-mark-on-second-quarter-gdp-chart

 

 

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Weakest Post-World War II Recovery… WSJ

by Jim Colburn • Friday, July 29, 2016

Here is the opening for the opposition party:

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Here is the WSJ:

“In terms of average annual growth, the pace of this expansion has been by far the weakest of any since 1949. (And for which we have quarterly data.) The economy has grown at a 2.1% annual rate since the U.S. recovery began in mid-2009, according to gross-domestic-product data the Commerce Department released Friday.”

Here is Sgt. Joe Friday:

“Just the facts, please”

http://blogs.wsj.com/economics/2016/07/29/seven-years-later-recovery-remains-the-weakest-of-the-post-world-war-ii-era/

 

 

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The problem with gasoline… FT

by Jim Colburn • Thursday, July 28, 2016

The Financial Times suggests that there are five things to watch in oil markets… Here is one of them:

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The rest are here: http://www.ft.com/cms/s/2/282e23c8-53e6-11e6-befd-2fc0c26b3c60.html?siteedition=intl&siteedition=intl&accessToken=zwAAAVYyRp4Akc8oLiPIU-YR5tO-_S_Awms8YA.MEUCIQC_yFUGv0njcqLC1rOhdPXjWioIHoJvpW3HRf-ROn5LzQIgW1F0UAdibz0SvfX9JK8zNWKr5KO8HYoYswDd4tLJ0vk&sharetype=gift#axzz4FiUHw8YQ

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Atlanta Fed reduces Q2 GDP estimate…

by Jim Colburn • Thursday, July 28, 2016

“The final GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2016 is 1.8 percent on July 28, down from 2.3 percent on July 27. After the U.S. Census Bureau’s inaugural release of its advance economic indicators report, which covers retail and wholesale inventories and foreign trade in goods, the nowcast of the contribution of net exports to second-quarter real GDP growth declined from 0.17 percentage points to –0.10 percentage points and the nowcast of the contribution of inventory investment to growth declined from –0.63 percentage points to –0.79 percentage points.”

Here is the chart:

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This Week in Petroleum… EIA

by Jim Colburn • Thursday, July 28, 2016

Some updated charts from This Week in Petroleum illustrate recent commentary on the oversupplied gasoline market..

Demand is up, but beginning to flatten compared to last year:

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After a seasonal decline, gasoline stocks are beginning to turn up again:

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Days supply which compares current stock levels to current demand, has stopped declining:

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There is more here: http://www.eia.gov/petroleum/weekly/

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Power price spikes, NYC, Monday

by Jim Colburn • Wednesday, July 27, 2016

This is not a market I follow closely, but I do wish I owned a storage facility that serves NYC… Here is the story from CNN and Bloomberg:

“The spot price of electricity was $94 per megawatt hour at 2:30 p.m. as the heat climbed over 90˚F. A reading from 3:30 p.m. — shortly after a storm warning — put the price at $1,042 per megawatt hour. The increase was reported earlier by Bloomberg News.”

Here are current prices in NYState:

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The CNN article is here:

http://money.cnn.com/2016/07/25/news/companies/new-york-energy-prices-storm/index.html?iid=hp-stack-dom

Here is the NY ISO site:

http://www.nyiso.com/public/markets_operations/market_data/maps/index.jsp

 

 

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Market Wizards, Jack Schwager, Barry Ritholz

by Jim Colburn • Monday, July 25, 2016

Barry Ritholz interviews Jack Schwager here:

MiB: Market Wizard Jack Schwager

I found the Market Wizard series highly entertaining and informative… Ritholz spends way too much time introducing and fawning over his guests, but eventually good stuff comes out of his interviews…

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How Much Oil in Storage?… WSJ

by Jim Colburn • Monday, July 25, 2016

The difficulty of counting oil barrels in storage worldwide is discussed in this article from the Wall Street Journal: http://www.wsj.com/articles/how-much-oil-is-in-storage-globally-take-a-guess-1469380040

“Some countries, such as Russia and China, choose not to report their oil-storage levels. And traders and oil companies that park supertankers have no obligation to make public their supply.”

““The data itself is so inconsistent,” said Harish Sundaresh, portfolio manager and commodities strategist for Loomis, Sayles & Co., which manages $240 billion. “In countries like Nigeria, Brazil, Angola, it’s not trustable.””

Here is what we think we know:

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Here is a chart showing the difference between Sep and Oct WTI, which could be looked at as the incentive to store.  We have recently moved to an area, -$.70, where the option to store becomes competitive:

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Fuel Glut Keeps Pressure on Refiners’ Profit…WSJ

by Jim Colburn • Saturday, July 23, 2016

This, from the WSJ article:

“At today’s benchmark prices, the crack spread, or price difference between crude oil and gasoline, stood recently at between $12 and $13 a barrel.

But while those margins are nothing to sneeze at, last year’s gasoline margins were nearly $17 higher, according to an Energy Management Institute report.”

And, simply put:

““Demand has actually been quite strong. It’s just that supply has exceeded it,” said Mark Broadbent, a research analyst at Wood Mackenzie, a U.K.-based consultancy.”

http://www.wsj.com/articles/fuel-glut-keeps-pressure-on-refiners-profit-1469266204

US gasoline stock levels, from This Week in Petroleum, show a slight rise recently:

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