China willing to negotiate with Trump to end "Trade War". Another FEAR bites the dust.
Open It Up by Phil Flynn at 8:54 AM ET on April 10:
Oil bears are scattering after China is signaling they will start to open their markets and take steps to guard foreign intellectual property. The speech by the Chinese President seems to suggest that President Donald Trump’s tactics of playing hardball is having the desired effect. China, of course, had its currency pegged to the dollar until 2014 and has charged many countries unfair tariffs and realized that they were trying to defend undependable trade practices. China’s President Xi Jinping promised to cut China's auto tariffs and improve intellectual property protection, opening the door to negations with the U.S. in what will be viewed as a big win for the Trump administration. While we don’t want to fly the mission accomplished flag just yet, perhaps President Trump was right, trade wars are easy to win.
The markets are still worried about the Mueller Investigation that seems to be heating up. Stocks that were rocking tanked late in the day after the FBI raided the offices of President Donald Trump’s personal attorney Michael Cohen. Some believe that it was about seizing records on the $130,000 payment made to Stormy Daniels. Others think the FBI used that as an excuse to find any evidence in the Russian collusion story that looks like it is falling apart. President Trump said that it’s a “disgrace” that the FBI “broke into” his lawyer’s office. He called Mueller’s investigation “an attack on our country.”
In the meantime, the U.S. economy is doing the best it has in years. President Trump’s approval ratings are on the rise and his policies on trade and his war on ISIS continues to make the average American’s economic prospects better than they have been in years. Some are worried about the CBO Budget deficit at $804 billion this year, $1 trillion a year starting in 2020. President Trump is going back to Congress and looking for ways to cut more spending. Yet my bet is that like the Reagan tax cuts they will eventually pay for themselves.
We also must look to more growth from the U.S. being able to do more business with China on a more level playing field. My bet is that when the U.S. places a bet on American Companies and American workers, it is a bet they are going to win.
Oil also has more Geopolitical risk. The AFP reports that U.S. President Donald Trump has promised a "forceful" response to the alleged chemical attack in Syria, as Western leaders consider what action to take. "We have a lot of options militarily," he told reporters. He added that a response would be decided "shortly". Mr. Trump said the U.S. was getting some "good clarity" on who was responsible for the incident in Duma on Saturday. Medical sources say dozens were killed in the alleged attack, but exact numbers are impossible to verify.
Russia backs Assad and he is already seeing his stock market get pummeled by sanctions. Russia can’t afford to let the price of oil fall or it would be a disaster for the Russian economy. The Increased tensions are also supporting gold as traders go back to the yellow metal as a haven. Measures of 60-day historical volatility for gold and palladium futures climbed to the highest in about a year. Volatility in silver also increased according to Bloomberg.
So, oil should be poised to resume its trend and we should put $70 a barrel back in play over the next 30 days. We look for more upward price pressure for RBOB and Diesel so make sure you are hedged. Grains will move on USDA crop report. Cold weather is playing havoc with crops and delaying planting so stay tuned to the Fox Business Network for all of the breaking news.
Oil Price - April 10
Oil Price - April 10
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Oil Price - April 10
Crude Jumps As Saudis Signal 'Ambition' For $80 Oil Price by Tyler Durden Tue, 04/10/2018 - 07:59 AM ET
WTI crude prices are up overnight, extending post-XI-sprech gains following headlines that Saudi Arabia wants to get oil prices near $80 a barrel to pay for the government’s crowded policy agenda (and costly war with Yemen) and support the valuation of state energy giant Aramco before an IPO.
Bloomberg reports that in conversations with OPEC delegates and oil market participants, Saudi officials had been careful to avoid pinpointing an exact price target. Yet people who have spoken to them said the inescapable conclusion from the conversations was that Riyadh is aiming for $80.
Read: https://www.zerohedge.com/news/2018-04- ... -oil-price
WTI crude prices are up overnight, extending post-XI-sprech gains following headlines that Saudi Arabia wants to get oil prices near $80 a barrel to pay for the government’s crowded policy agenda (and costly war with Yemen) and support the valuation of state energy giant Aramco before an IPO.
Bloomberg reports that in conversations with OPEC delegates and oil market participants, Saudi officials had been careful to avoid pinpointing an exact price target. Yet people who have spoken to them said the inescapable conclusion from the conversations was that Riyadh is aiming for $80.
Read: https://www.zerohedge.com/news/2018-04- ... -oil-price
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Oil Price - April 10
Energy & Capital: DeHaemer Puts Out "Conviction Buy" in Oil
By Christian DeHaemer
Written Apr. 10, 2018
"The market narrative is that the world is awash in cheap oil due to fracking, and besides, the internal combustion engine will go away due to electric vehicles. None of that is true. In fact, oil demand is growing rapidly and will soon eclipse supply. There are all sorts of bottlenecks."
"Oil moves on the margins when the supply/demand equation gets tight. There are any number of geopolitical scenarios that could push oil back to $90: sanctions on Russia and/or Iran; the fall-off in Colombian and Brazil oil production; the bottleneck in the Permian basin pipeline; Libyan wars and Saudi Arabian IPOs... No one knows what could light the match, but a good investor will buy low in a hated sector that is showing signs of an early rebound."
By Christian DeHaemer
Written Apr. 10, 2018
"The market narrative is that the world is awash in cheap oil due to fracking, and besides, the internal combustion engine will go away due to electric vehicles. None of that is true. In fact, oil demand is growing rapidly and will soon eclipse supply. There are all sorts of bottlenecks."
"Oil moves on the margins when the supply/demand equation gets tight. There are any number of geopolitical scenarios that could push oil back to $90: sanctions on Russia and/or Iran; the fall-off in Colombian and Brazil oil production; the bottleneck in the Permian basin pipeline; Libyan wars and Saudi Arabian IPOs... No one knows what could light the match, but a good investor will buy low in a hated sector that is showing signs of an early rebound."
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Oil Price - April 10
Helen Rush opinion from London
Crude oil prices are extending this week’s recovery after a major sell-off on Friday, with Brent is approaching the $70 threshold for the first time since the start of the month. The barrel is up 1.18% on the day, and the key question now is whether the prices will have enough impetus to challenge the key psychological resistance in the short term.
The major driver behind the current bullish dynamics is the abated fear of a US-China trade war which runs the risk of undermining the global economic growth and, therefore, global oil demand. Due to investors’ relief on this front, Brent has managed to shake off the bearish pressure for the time being. Nevertheless, the current picture doesn’t look sustainable as risky assets may come under pressure again, should any fresh signs of trade escalation emerge.
In addition to this, there is a risk from the US data. Today’s API numbers may point to further inventory increase, and if the growth turns out substantial, the report may serve as a catalyst for profit taking at high and attractive levels. In this scenario, the asset will retreat from current highs below the $69 figure, though the bearish potential will likely be limited due to a favorable risk environment globally.
Crude oil prices are extending this week’s recovery after a major sell-off on Friday, with Brent is approaching the $70 threshold for the first time since the start of the month. The barrel is up 1.18% on the day, and the key question now is whether the prices will have enough impetus to challenge the key psychological resistance in the short term.
The major driver behind the current bullish dynamics is the abated fear of a US-China trade war which runs the risk of undermining the global economic growth and, therefore, global oil demand. Due to investors’ relief on this front, Brent has managed to shake off the bearish pressure for the time being. Nevertheless, the current picture doesn’t look sustainable as risky assets may come under pressure again, should any fresh signs of trade escalation emerge.
In addition to this, there is a risk from the US data. Today’s API numbers may point to further inventory increase, and if the growth turns out substantial, the report may serve as a catalyst for profit taking at high and attractive levels. In this scenario, the asset will retreat from current highs below the $69 figure, though the bearish potential will likely be limited due to a favorable risk environment globally.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Oil Price - April 10
Bloomberg, opinion: Seen Any Oil Bears Recently? Didn't Think So.
Oil-market bears are in deep hibernation. Given this particularly bracing New York spring, who can blame them? Money managers like hedge funds have held a net long position of more than 1 billion notional barrels in the big three crude oil contracts in almost every week since late December. There are several reasons for bulls to stay bullish: First, as every day passes, we get closer to seasonally stronger demand. Meanwhile, with John Bolton starting work today as the new U.S. national security adviser -- after another weekend of mayhem in Syria -- the Iran nuclear deal looks ever more vulnerable. Elsewhere, Venezuela continues with its slow-motion supply shock. And Saudi Arabia and Russia are still leading efforts to keep barrels off the market -- with the latter perhaps more apt to stick with them if the ruble's panicked reaction on Monday to the latest set of U.S. sanctions proves a harbinger of instability.
https://www.bloomberg.com/gadfly/articl ... y-reappear
Oil-market bears are in deep hibernation. Given this particularly bracing New York spring, who can blame them? Money managers like hedge funds have held a net long position of more than 1 billion notional barrels in the big three crude oil contracts in almost every week since late December. There are several reasons for bulls to stay bullish: First, as every day passes, we get closer to seasonally stronger demand. Meanwhile, with John Bolton starting work today as the new U.S. national security adviser -- after another weekend of mayhem in Syria -- the Iran nuclear deal looks ever more vulnerable. Elsewhere, Venezuela continues with its slow-motion supply shock. And Saudi Arabia and Russia are still leading efforts to keep barrels off the market -- with the latter perhaps more apt to stick with them if the ruble's panicked reaction on Monday to the latest set of U.S. sanctions proves a harbinger of instability.
https://www.bloomberg.com/gadfly/articl ... y-reappear
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Oil Price - April 10
Saudi Arabia needs $80 oil to balance their budget.
"Riyadh’s desire for higher prices is driven by domestic policy imperatives. Although Saudi Arabia’s budget deficit has narrowed sharply as oil has recovered, Prince Mohammed has set out an ambitious and expensive economic and social reform program. He also needs to pay for the kingdom’s increasingly drawn-out military entanglement in Yemen."
https://www.newsmax.com/finance/markets ... 7324c9e2b8
"Riyadh’s desire for higher prices is driven by domestic policy imperatives. Although Saudi Arabia’s budget deficit has narrowed sharply as oil has recovered, Prince Mohammed has set out an ambitious and expensive economic and social reform program. He also needs to pay for the kingdom’s increasingly drawn-out military entanglement in Yemen."
https://www.newsmax.com/finance/markets ... 7324c9e2b8
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Oil Price - April 10
What if Trump tweets tonight "We won! I told you trade wars are easy to win. My friend Xi is doing the right thing"?
I pray for the trade war issue to go away, but it is not dead yet.
I pray for the trade war issue to go away, but it is not dead yet.