Have a Good, Long Weekend
Have a good weekend!
"Luck is not chance, it’s toil; fortune’s expensive smile is earned.”
Have a good weekend!
Oil Rises, Heads for Biggest Weekly Gain in Two Months as Storm Shuts Rigs Crude oil headed for its biggest weekly gain in almost two months and natural gas rose as producers evacuated rigs before the arrival of Gustav, forecast to be the largest hurricane in the Gulf of Mexico since Katrina.
The Bush administration, escalating its response to
XX Is this new cold war worrying you? Because it’s scaring the crap out of me.
Obama Pledges to Restore `America's Promise,' Says McCain `Doesn't Get It' Barack Obama accepted the Democratic nomination for president, mixing a soaring pledge to preserve the ``American promise'' with a sharp attack on John McCain's judgment on the war, the economy and support of George W. Bush.
Production should rise to 3.6 million pounds of uranium oxide in the year ending June 30, 2009, from 1.71 million in the preceding 12 months, Managing Director John Borshoff said on a conference call. Output should increase to 6.8 million pounds the following year, to 7.4 million in 2010-11 and 9.3 million in 2011-12, he said.
XX Sean’s note – we’ll see. Paladin has disappointed us before.
India Economic Growth Slowed to 7.9% Last Quarter; Weakest Pace Since 2004 India's economy grew at the slowest pace since 2004 last quarter as the fastest inflation in a decade and increased borrowing costs damped consumer spending.
The dirty secret of clean energy is that while generating it is getting easier, moving it to market is not. The grid today, according to experts, is a system conceived 100 years ago to let utilities prop each other up, reducing blackouts and sharing power in small regions. It resembles a network of streets, avenues and country roads.
Russia May Cut Off Oil Flow to the WestAnd while some may say that the Bear deserved poking, the Russians probably need our money less than we need their oil and gas.
Reports have begun to circulate in Moscow that Russian oil companies are under orders from the Kremlin to prepare for a supply cut to Germany and Poland through the Druzhba (Friendship) pipeline. It is believed that executives from lead-producer LUKoil have been put on weekend alert.
Oil prices are cratering today; I guess investors think the bad news is factored in. I kind of expected this investor reaction, which is why I got my RCE subs out of DIG on Monday, and I'm glad I did.
And it's not just oil. Bearish news (short-term, anyway) on natural gas continues to roll in. From Bloomberg …
Inventories advanced 102 billion cubic feet in the week ended Aug. 22, to 2.757 trillion cubic feet, the U.S. Energy Department said today. Analysts forecast an increase of 84 billion. The average change for this time of year is 57 billion cubic feet.
Stockpiles are 71 billion cubic feet above the five-year average for this time of year, the department said today.
The International Energy Agency IEA is ready to release strategic oil stocks if Tropical Storm Gustav hits the
Gulf of Mexicooil hub early next week, the energy adviser to 27 rich nations said on Thursday.
In other news, Weather Underground has the scoop on Gustav and its progress. But here in
The Iraqi government is likely to abandon plans to sign short-term contracts with foreign oil companies, negotiations over which have been halting, a senior U.S. diplomat in Baghdad said on Sunday.So, in other words, now that Iraq has an oil deal with China, it no longer needs the lop-sided deals it signed with the US and European oil majors.
set a floor for stock prices on the benchmark exchange, moving to halt a plunge that has wiped out $36.9 billion of market value since April. Pakistan
Securities can trade within their daily limit of 5 percent ``but not below the floor-price level'' of yesterday's close.
Yes! That’s what I’ve always wanted – a stock market that can only go up. Don’t tell Bush about this solution or we may see it enacted on Wall Street.
In other news, Bloomberg really knows how to bury the lead in this next story. Check out what I’ve highlighted …
is facing the worst financial crisis since the Depression. You would never know that from the Democrats' platform in U.S. or its Republican counterpart, or from listening to Barack Obama or John McCain. Denver
XX Sean’ note – Splutter! Excuse me while I a do a spit-take, Bloomberg, but did you say the
The rest of that Bloomberg story is heavy on politics and light on economics. Seriously, I want a Bloomberg story detailing why they agree (with the folks at Weiss Research, who have been saying it for months) that the
Trade and financial linkages with the G-7 countries mean that
Asiais unlikely to remain unscathed. Asian economies dependent on exports to the US and Europe and having large current account surpluses (China, Taiwan, Hong Kong, Singapore and others) will suffer from the G-7 recession.
XX Sean's note -- unless, of course, the G-7 doesn't slide into recession. I only mention that because America's Q2 growth was revised much higher to 3.3%.
"Corn and soybeans have rebounded as reduced crop yields push
stockpiles to near five-year lows. Oil has reversed on U.S.-Russian tensions. Nickel has turned after Xstrata Plc closed a U.S. plant. Dominican Republic
The worst rout in the history of commodities may be ending, signaling a replay of the 2006 tumble that preceded a doubling of prices in the next 17 months as measured by the Standard & Poor's GSCI index. Only this time, the driver is supply cuts rather than increasing demand. Supply constraints are "coming more and more to the fore'' and that "will separate the performance of individual commodities," said Alan Heap, global commodity analyst at Citigroup Inc. in
. "We're still looking for higher prices next year and in some cases the year after." Sydney
XX Sean’s note – the same piece quotes a contrary view …
"The whole cycle that began around the turn of this century ended," said Michael Aronstein, chief investment strategist at Oscar Gruss & Son Inc. in
, who returned 15 percent a year in the 1990s managing commodity investments. "Human ingenuity creates productivity, and the real price of almost everything that's extracted or manufactured goes down over time. That's the nature of human progress." New York
Lead Climbs to Three-Week High on Speculation of Rebound in China Demand Lead rose to the highest in three weeks in London on speculation demand improved in China, the world's largest consumer and producer of the metal.
Crude Oil Rises a Fourth Day as Tropical Storm May Threaten Gulf Platforms Crude oil and natural gas rose as Royal Dutch Shell Plc, BP Plc and ConocoPhillips evacuated drilling rigs before the arrival of Gustav, forecast to become the worst Gulf of Mexico hurricane since Katrina.
Australia's Mining Boom Drives Faster-Than-Forecast Business Investment Australian business investment rose more than twice as much as economists forecast in the second quarter as mining companies spent extra on machinery and equipment to meet demand from China.
I exited a bullish oil position in Red-Hot Commodity ETFs yesterday because of oil’s lackluster response to Hurricane Gustav. It turns out some traders with long ears may have already heard about the bearish product demand that came out after the market closed yesterday. In short, oil product demand dropped 5.6% in June, more than expected. With that news out of the way, oil is up again, but not as much as you might think with a hurricane seeming to take aim at Louisiana.
If you’ve been reading my stuff, you know that I keep saying “Drill-Drill-Drill” isn’t a real answer, because we don’t have enough drill rigs and we don’t have enough crews for those rigs. Now, it turns out the shortage of trained rig workers is even more acute than first thought.
Meanwhile, here’s a story I find interesting …
The winds of change in our energy consumption could still be light years away. Wind accounts for less than 1 per cent of the energy produced in
Canada( is the wind-farm leader). The Canadian Wind Energy Association believes it can be 5 per cent by 2010. Ontario
The European Wind Energy Association is predicting that 28 percent of the European Union's electrical consumption will be supplied by wind turbines by 2030; currently, it's about 3 percent. In the
, they're talking about a target of 20 percent in 20 years. Now, it's less than 1 percent. U.S.
XX Sean’s note -- this sounds daunting, but on the other hand, MIT says we could cut our gasoline/diesel use in half by 2035 by transitioning as quickly as possible to lightweight and plug-in hybrid vehicles.
Another story I'm watching ...
Medvedev: We’re ‘not afraid’ of a new Cold War
XX Sean’s note: Not that anyone’s asking, but I’m not in favor of provoking the Russian bear. We have a weak hand right now because our assets are tied up in that Godforsaken hell-hole called
In Other News …
Durable-Goods Orders in U.S. Unexpectedly Climbed 1.3% in July on Exports Orders for
Corn, Soybeans, Wheat Advance as Dollar Weakens Against Euro, Crude Gains Corn and soybeans rallied as a drop in the dollar boosted the appeal of
Gold Advances in London on Investor Demand for Safe Haven, Falling Dollar Gold rose in
XX Sean’s note – you mean investors FINALLY noticed that there are severe housing-related financial losses and that that might be a reason to buy gold? Why the heck didn’t that happen LAST month? My timing on this stuff leaves much to be desired.
From Marketwatch ...
A monthly report issued by the EIA on Tuesday said total crude oil and products supplied, which is a good indication of domestic consumption, was at around 19.553 million barrels per day in June of this year. That was down from 20.737 million barrels per day a year earlier.
and from Dow Jones Newswires ...
Amid record high prices, U.S. oil demand in June was 1.17 million barrels a day, or 5.6%, lower than a year ago, at 19.553 million barrels a day - the lowest level for the month since 1998 - revised government figures released Tuesday show.
The revised June figure shows the weakest demand for any month since May 2003, data from the Energy Information Administration show. The decline in June demand for oil is the steepest in any month since a 7.2% fall in February, when demand fell 1.527 million barrels a day.
I'm guessing news of this EIA data leaked out, which explains why oil prices didn't blast off today as Gustav took aim at the Gulf of Mexico.
I'm also guessing that we'll see usage drop again next month -- because that's when we'll get July's numbers. The more interesting thing to find out is what is happening now. Are people starting to drive more again as prices at the pump fall? Gas prices are down an average 42 cents a gallon since peaking in mid-July.
Paladin Energy Says That It Is Set to Expand Uranium Production in Africa Paladin Energy Ltd., the Australian producer of uranium in Africa, said an expansion of its mine in Namibia is due for completion at the end of the year, while a project in Malawi will start operating in January.
Rio Tinto Earnings Double as Iron-Ore Miner Fights $142 Billion BHP Offer Rio Tinto Group, fighting a $142 billion hostile offer from BHP Billiton Ltd., posted first-half profit that beat analyst estimates on increased aluminum sales and record iron ore prices.
U.S. Mint resumes gold coin orders on limited basis
The Mint said that it will equally divide its Eagles inventory available for sale each week into two equal pools, with the first allocated equally among all authorized dealers, and the second pool distributed according to the dealers' past sales performance
News of Interest
Only a few months ago, some economists still offered hope that robust expansion could continue in much of the world even as the
"The financial crisis has shown that markets are bubble-prone and that laissez-faire regulation doesn’t work. The authorities need to get a grip if we are to avoid a mega-bubble. But we may need an even deeper crisis for that to happen."
Columbian Bank and Trust Company, of
From Calculated Risk: even with the failure of almost 3,000 banks and thrifts during the S&L crisis, the overall economy stayed fairly healthy with only a mild-to-moderate recession starting in July 1990.
Libor Signals Credit Seizing Up as Banks Balk at Lending in Money Markets Most of the bond strategists and salesmen that Resolution Investment Management Ltd.'s Stuart Thomson talked to last August expected the credit crunch to be long over by now. Instead, money markets show there's no end in sight, and it may even worsen.
The weakened US dollar has fallen out of favor with organized crime groups to pay for drug shipments or to settle scores, a Canadian government report said Friday.
PAKISTAN -- THE NEXT CRISIS?
The Pakistani Taleban have "the upper hand" and should be put on the list of banned organisations in
Many owners of small restaurants, hotels and shops in
In the next few years,
MINING & RESOURCES
Weaker commodity prices and higher costs are starting to take a toll on the global mining industry as the billions of dollars being spent on new projects could take years to recoup.
Demand for resources by
Some analysts view the recent mine closures as bullish for commodity prices in the long run, because the moves suggest companies are imposing more financial discipline than in past booms. As miners curb output, it could help prop up prices.
Still, the economics of mining have shifted drastically in recent years. The cost of energy to run mining trucks and other equipment has skyrocketed, while steel and other building materials also are more expensive.
Commodities Hint of Bottom as Mines Close, Crop Supplies at Five-Year Lows Corn and soybeans have rebounded as reduced crop yields push U.S. stockpiles to near five-year lows. Oil has reversed on U.S.-Russian tensions. Nickel has turned after Xstrata Plc closed a
Corn, Soybeans Jump as Midwest Crop Tour Forecasts Smaller U.S. Harvests Corn and soybeans gained after Professional Farmers of America said harvests in the U.S. will be smaller than forecast by the government as dry weather in August hurt Midwest crops already stunted by flooding in June.
It’s the weekend. You should go see the movie “I.O.U.S.A.” Some very smart people I know at Agora are deeply involved in the making of this movie. Here’s Roger Ebert’s review.In Other News ...
China's oil demand growth hit a two-year high in July but the pre-Olympic spurt will likely fall off in the autumn, undermined by high prices, global economic woes and the end of official pressure to stockpile for the games.
XX Sean’s note – funny, but I’d think that after the Olympics (or at least, after the Para-lympics),
Some markets are too illiquid to trade. Here is a cautionary tale about rhodium (with charts).
On the other hand, money is pouring into the SLV (silver ETF).
So much for a surplus of gold. You can’t buy American Gold Eagles now if you want to.
You know how things were going pretty well in
Want to know more about Obama’s economic plan? The New York Times breaks it down for you.
And here's some dance music to get your weekend off to a good start.
Labels: crude oil
Geopolitical events are driving oil prices.
Supply and demand is also in play.
Drawdown of gasoline stockpiles in US was more than twice expectations -- 6.3 million barrels. Demand destruction may have been short-term. Since prices have pulled back, people may be driving again.
Chinese demand dipped during the Olympics as they shut down factories and took cars off the road. It will probably increase again after the Olympics.
On the supply side,
Labels: crude oil
The run up in housing created perceived wealth for Americans similar to that driven by the technology boom in stocks in the late 1990s. Interestingly, when housing values stopped going up and started going down, people were still spending and investing-and the economy was rolling on the fumes. Stocks soared on the wealth-effect by 24% after the top in housing was put in during July of 2006 (as measured by the Case-Shiller Index).Note: I am involved with The Secret Order of Jurojin, but it in no way is affiliated with Weiss Inc. Futures aren't for everybody, and odds are they aren't for you.
The market has since, given it ALL back. This now places the value of the stock market at the same level as it was when the euphoric housing mania was at its peak. Hmmm!
In recent days, Secretary of State Condoleezza Rice and President Bush have been promising to isolate
. Some American politicians have threatened to expel it from the Group of 8 industrialized nations, to abolish the NATO-Russia Council and to keep Russia out of the World Trade Organization. Russia
These are empty threats. For some time now, Russians have been wondering: If our opinion counts for nothing in those institutions, do we really need them? Just to sit at the nicely set dinner table and listen to lectures?
Read Gorbachev's whole piece. He doesn't have a monopoly on the truth. But we have to know where the Russians are coming from if we want to reach a compromise everyone can live with.
Honda Motor Co. and Komatsu Ltd. are turning to
In 1994, the top five oil companies spent 3 percent of their free cash on share buybacks and 15 percent on exploration. By 2007, they were spending 34 percent of their free cash on buybacks — in effect, propping up their share prices — and a mere 6 percent on exploration, according to figures compiled by a team led by Ms. Jaffe and Ronald Soligo of Rice University. As a result, some experts warn that supplies will fall short of the demand over the next decade, perhaps sending prices well above today’s levels.
And now some news you can use ...
OPEC official says output cuts may be needed
An Iranian official in the Organization of Petroleum Exporting Countries said Saturday that the producers group is considering leaving oil production levels unchanged or perhaps even trimming them to shore up flagging prices and defend market share. "The market is oversupplied by at least 1 million barrels a day. If OPEC would like to remove this additional oil out of the market, then OPEC has to cut some production," OPEC governor Mohammad Ali Khatibi told Dow Jones in a telephone interview.
Crude Oil: Supply and Demand Prospects
Despite the high prevailing prices, demand in 2008 is expected to total 86.9 million barrels compared to 85.96 mb/d in 2007. For 2009, global oil demand is expected to reach 87.7 mb/d.
Busting the myths about cheap and unlimited oil being broadcast by Rush Limbaugh, Jerome Corsi and other ignoramuses.
Goldman Cuts U.S. Natural Gas Price Forecast 23% Citing Higher Production Goldman Sachs Group Inc. cut its
Bracing for Inflation
Growing evidence suggests American consumers, businesspeople, and political leaders should all be bracing for double-digit inflation, probably as early as 2009. The skyrocketing price of oil is obviously a central element in the accelerating price spiral. But a sea change in
US Banks Scramble To Refinance Long-Term Debt
The banks’ need to raise capital to offset mounting credit-related losses is forcing them to pay higher interest rates to entice investors.
China raises tax on big cars to curb pollution
But cars with an engine size of between 1 and 2.5 liters, which account for nearly 90 percent of the world's second-largest car market, will have their tax rate unchanged.
The US dollar has definitely broken above that weekly downtrend. A pullback and test of that support wouldn't surprise me. This breakout opens the door for a rally in the dollar to the 80+ level.
And naturally, the rally in the greenback is kicking gold lower ... Gold could make a stand here. But the bullishness in the dollar tends to tell me that gold will go down to test that weekly uptrend I've marked as (2).
Now, let's look at the CRB Index, a broad commodity index (though it is weighted heavily toward energy) ... It is testing support as well. So, maybe this will bring a rally early next week. I think I've pointed out why that rally could fade quickly.
Cameco Cuts Production Target by 1 Million Pounds
Cameco said its share of uranium production for 2008 is now projected to total about 19.6 million pounds of U3O8, down from the previous forecast of 20.6 million pounds of the fuel used to power nuclear generating plants.
XX Sean’s note – good thing Cameco got that sweetheart, hush-hush deal to resell 550 tonnes of Iraqi uranium, or it might have to cut its production target even more, eh? Now, how’s your money bet on Cameco cutting its production target again? Do you feel lucky?
Uranium One Reduces Production Targets Of Dominion Mine
The company said that it expected to produce 320,000 lb of uranium from Dominion this year, compared with a previous forecast of 590,000 lb.
XX Sean’s note – A slew of companies have cut production targets. Keep an eye on the spot market over the next couple weeks and let’s see if utilities are getting nervous.
Raids Suggest Russia Targeted Energy Pipelines
A neat row of large craters in a field in southern Georgia strongly suggests that Russia dropped bombs near oil and gas pipelines bringing fuel to the West.
XX Sean’s note – this story is in the Wall Street Journal, which hands its political reporting over to crackpots and wingnuts, so take it with a grain of salt. Also, while Russia won the war on the ground, Georgia has won the information war hands-down. On the other hand, would you put it past the Russians to bomb Georgian pipelines? I sure wouldn’t – I think Russia is trying to build a new Empire of Energy. The only question in my mind is, if this is true, why didn’t Russia follow through?
U.S. Industrial Production Unexpectedly Gains 0.2%, Led by Cars, Metals Industrial production in the U.S. unexpectedly rose in July, helped by gains in automobiles, metals and machinery.
China's Factory, Property Spending Growth Quickens on Disaster Rebuilding China's factory and property spending growth accelerated, fueled by rebuilding after the Sichuan earthquake in May and snowstorms in January and February.
Silver, Oil, Wheat, Copper Plunge as Dollar's Rebound Saps Commodity Boom Gold plunged below $800 an ounce, platinum posted the biggest drop in almost seven years and oil, corn and copper slumped as the dollar's rebound reduced the appeal of commodities after a six-year boom.
OPEC Leaves 2009 Oil Demand Growth Estimate at Lowest Rate in Seven Years The Organization of Petroleum Exporting Countries, the supplier of more than 40 percent of the world's oil, left its forecast for 2009 oil demand growth unchanged at the lowest rate in seven years and warned that consumption may fall further.
OPEC's 2008 Oil Revenue to Exceed U.S. Income Tax Receipts: Chart of Day OPEC is pulling in more money from oil sales than the U.S. government is raising from individual taxpayers.
Oh, now Michelle Caruso-Cabrera is joining the party. Hey, there’s a woman who’s comfortable with the dark side. She’s perfect to interview the head of the world’s largest, most corrupt and bloodthirsty mercenary outfit.
I can’t wait to see who's next!
US Foreclosure Filings Surge 55 Percent
Nationwide, more than 272,000 homes received at least one foreclosure-related notice in July, up 55 percent from about 175,000 in the same month last year and up 8 percent from June, RealtyTrac Inc. said. That means one in every 464
EU: Euro Economy Shrinks in Second Quarter
Growth in the 15 economies that share the euro currency contracted by 0.2 percent from the first quarter, expanding just 1.5 percent from the same period a year ago, the EU statistical agency Eurostat said.
How moon rocks could power the future
The moon is once again a popular destination, as several space-faring nations are talking about setting up bases there. One reason would be to mine fuel for future fusion reactors.
The fuel in this case is helium-3, a lighter isotope of the helium used in balloons. In high energy collisions, helium-3 fuses with other nuclei to release more energy and less waste than the reactions in traditional nuclear reactors.Signs of the Times. Just click through ... you'll see.
If we stopped driving our cars tomorrow,
As Gas Prices Recede, Fuel-Efficiency Concerns May, Too. In July, consumers' consideration of presumably out-of-favor segments including large crossovers, minivans and sports cars began a significant recovery, while consideration of small cars and hybrids actually began declining from levels in June.
Water inflows halt Cameco's Cigar Lake uranium project yet again
The problems which have plagued Cameco's Cigar Lake uranium project are not quite finished as the company temporarily suspended remediation work again to water inflow concerns.
Gold Rallies From Seven-Month Low in London on Jewelry, Investment Demand Gold rebounded in London as jewelry and investment demand revived after the price of the metal declined to a seven-month low. Platinum and silver also gained.