GDPNowcasts show robust growth for Q4…

by Jim Colburn • Sunday, January 14, 2018

The dueling GDP Nowcasts of the NY and Atlanta Feds show robust growth for 4Q17:

Here is Atlanta at 3.3%:

New York is at +3.88%:

 

 

 

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$70 Oil, but OPEC Should Keep Cool… Bloomberg

by Jim Colburn • Sunday, January 14, 2018

From Julian Lee, at Bloomberg:

”To be sure, stronger-than-expected demand growth helped producers to drain excess stockpiles in 2017, and OPEC is forecasting a similar increase in the world’s oil use this year. But that would be the fourth year with demand growth running above 1.5 percent — not unheard of, but there have only been two other such four-year stretches in the last 40 years. The IEA takes a slightly more cautious view, seeing global demand growth in 2018 at 1.3 percent. The difference seems small, but, together with more robust U.S. output, a lower pace of growth would be enough to wipe out the prospect of any 2018 stockdraw.”  But read the whole thing here

Here are some excellent charts in the article:

The EIA ramped up its estimate of US oil production in last week’s release of it’s Short Term Energy Outlook:

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Crude oil volatility… Market Realist

by Jim Colburn • Friday, January 12, 2018

Here is a nice chart from Market Realist showing an inverse relationship between crude oil prices and implied volatility:

Of course, the record implied vol, since options have traded on the exchange, is over 100%, during the first Gulf war as prices were soaring…

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Record natural gas withdrawals… EIA

by Jim Colburn • Friday, January 12, 2018

From the EIA’s Today in Energy:

“During the recent cold weather event that affected much of the eastern United States, more natural gas was withdrawn from storage fields around the country than at any other point in history. Net withdrawals from natural gas storage totaled 359 billion cubic feet (Bcf) for the week ending January 5, 2018, exceeding the previous record of 288 Bcf set four years ago.”

And here is a long term chart of natural gas futures prices, from Barchart, which are based on the Henry Hub In Louisiana:

 

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The EIA’s Short Term Energy Outlook…

by Jim Colburn • Wednesday, January 10, 2018

There are lots of tasty morsels in the EIA’s monthly Short Term Energy Outlook, here are just a few:

On WTI/Brent price spreads:

”EIA estimates that, without pipeline constraints, moving crude oil from Cushing to the U.S. Gulf Coast typically costs about $3.50/b. EIA estimates that it costs approximately $0.50/b more to transport WTI from the United States to Asia than it costs to ship Brent from the North Sea to Asia. Although more infrastructure to export crude oil has been built recently, U.S. exporters must still use smaller, less-economic vessels or complex shipping arrangements, which add to costs.”

And, note the expected build in 2Q18 inventories (how will the market react?):

Note the bump up in unplanned non-OPEC outages:

Gasoline inventories look more plentiful than distillates compared to 5 year averages:

Here is the link:  https://www.eia.gov/outlooks/steo/pdf/steo_full.pdf

 

 

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The Global Economy’s Output Gap Has Closed… WSJ/World Bank

by Jim Colburn • Wednesday, January 10, 2018

Josh Zumbrun, WSJ, summarizes the World Bank’s Global Economic Prospects here

The 10-year note has noticed… Here are Tnote futures from barchart.com:

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World stock markets.. The Economist

by Jim Colburn • Tuesday, January 9, 2018

The Economist magazine has a feature called “Markets” where various stock markets from around the world are tallied… The most recent is as of January 3rd and compares equity market returns to December 30th, 2016… Here are the top performers (in US dollar terms):

Argentina +60.0%, Austria +51.8, Chile +50.2, Poland +49.2, Greece +44.8, Czech Republic +42.4, Hungary +41.3… Even Carbon Credits were +34.8%…

I see a new ETF starting which will invest in countries starting with A…

Here is the link: https://www.economist.com/news/economic-and-financial-indicators/21733993-markets

 

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My Favorite Charts…Michael Batnick/The Irrelevant Investor

by Jim Colburn • Monday, January 8, 2018

Michael Batnick put together an interesting chart book here… (here is the JP Morgan site with more: https://am.jpmorgan.com/blob-gim/1383407651970/83456/MI-GTM_1Q18_1.pdf?segment=AMERICAS_US_ADV&locale=en_US)

Here are two:

The recovery/expansion has been long, but weak:

This chart shows returns of various investment buckets with an “asset allocation” comparison:

My Favorite Charts

 

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Record natural gas demand… EIA

by Jim Colburn • Friday, January 5, 2018

The EIA reports that Jan 1 set a new record for natural gas consumption:

“Estimated U.S. natural gas demand on January 1, 2018 reached 150.7 billion cubic feet, surpassing the previous single-day record set in 2014, according to estimates from PointLogic. Much colder-than-normal temperatures across much of the United States have led to increased demand for heating, much of which is provided by natural gas. Although residential and commercial natural gas consumption did not appear to surpass previous records, higher consumption in the electric power and industrial sectors, greater exports of natural gas to Mexico, and more demand for liquefied natural gas (LNG) feedstock gas contributed to the recent record demand level.”

 

 

 

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One stat…

by Jim Colburn • Friday, January 5, 2018

From the EIA’s “This Week in Petroleum”, refinery runs are up to an eye popping 17,608 barrels per day!!!  The record based on weekly numbers is 17,725 for the week ending 8/25/17…  Based on the EIA data going back to the early ‘80’s this is a record for December… Here is the chart:

Here are crude, distillate and gasoline stock levels compared to 5 year highs and lows:

And, from barchart.com, here are crack values:

 

 

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