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Post by Fraser921 »

Another day another bank failure. The banking crisis is causing a deleveraging by big banks, pulling back their exposure to oil and causing prices to fall harder than other risk assets. Credit Suisse is causing todays turmoil after the Saudi National bank Chairman Ammar Al Khudairy ruled out more assistance from their bank. He does not think they will need any more money. The stockholders see it differently, selling shares causing a halt in the stock and shares down over 20%. The Fed swaps are now pricing in 100% chance of an interest rate cut in December.

The oil moves smack of market liquidation as opposed to anything directly related to current supply demand fundamentals. This is evidenced by substantial drawdown in oil product inventories as reported by the American Petroleum Institute (API) which reported that gasoline supply fell by 4.587 million and distillates by 2.886 million. Even the reported 1.155-million-barrel increase in crude oil supply was tempered by a reported 946,000-barrel drop in Cushing, Oklahoma supply. Yet supply and demand for oil do not matter when we have a run on the bank.

Even the International Energy Agency (IEA) is warning that oil supply that they say is currently in an oversupply situation, will turn to a supply deficit later in the year. The IEA says that oil is currently oversupplied due to Russia looking for a home for its oil. Yet It is also being reported that Russia’s oil exports dropped by 500.000 barrels a day in February to 7.5 million barrels a day and they could make good on their threat to cut production by a similar amount.

The IEA did say the global stockpiles did increase by 7.8 billion barrels, the largest level since 2021 but still believe that the market could flip to an undersupply situation. At the very least, the market should be balanced by the middle of the year.

This comes as reports from the Chinese and Saudi finance ministers that says early signs on the China reopening are promising. They also said that Saudi investments into Iran could happen very quickly following an agreement. Who said Biden couldn’t bring the world closer together? He’s doing a great job pushing Russia and China closer together and now Saudi Arabia and Iran. Arab News reports that Saudi Energy Minister Prince Abdulaziz bin Salman said on Tuesday that the Kingdom will not sell oil to any country that attempts to impose a price cap on its supplies.

Reuters is also reporting that China is on track to import 5.39 million tonnes of LNG in March, according to data compiled by commodity analysts Kpler. This would be up from February’s 4.96 million tonnes and above the 4.77 million from March last year.

Prince Abdulaziz said in an interview published by Energy Intelligence that placing a ceiling on oil prices would inevitably lead to market instability, and Saudi Arabia would reduce its oil production. The Prince added that OPEC+ group of oil-producing nations had succeeded in bringing significant stability and transparency to the oil market, especially in comparison to all other commodities markets. “The NOPEC bill does not recognize the importance of holding spare capacity, and the consequences of not holding spare capacity on market stability,” he said.

EBW on natural gas is saying that the April contract found support early this week after last week’s 19% plunge from overbought levels north of $3.00/MMBtu. A modest bullish weather shift and three consecutive colder weeks ahead for the first time this winter could enable NYMEX futures to trend moderately higher in coming weeks. Fundamentally, the storage surplus vs. the five-year average may narrow more than 100 Bcf after Thursday’s EIA report—a sharp departure from repeatedly building inventory surpluses for the past three months.

I believe that the banking crisis sell off at this point is overdone on oil and we should find some stability shortly as soon as there’s a perception that the dominoes are going to stop falling. We should have a significant rebound in the short term and see some extreme turbulence so make sure you keep your seat belt buckled.
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Re: Flynn

Post by moke »

No worries, the Ides of March is here. The Government has plans for your money.

Action Alert – List of States Where “Money” Is Being Redefined and Non Govt Issued Cryptocurrency Is Being Banned

March 14, 2023 | Sundance | 362 Comments
Last week, South Dakota Governor Kristi Noem broadcast a warning on the Tucker Carlson show about a bill that passed her State House and Senate that she was forced to veto because it changed the definition of money and banned non-govt-issued cryptocurrency like Bitcoin. {Broadcast Warning Here}

The bill stems from the generally innocuous Uniform Commercial Code (UCC), which Daniel Horowitz describes as, “a set of standards to facilitate interstate sales and commercial transactions such that all definitions pertaining to such commerce are uniform and clearly understood.” It looks like Horowitz was the first to transmit the public warning, as identified by two members of the South Dakota House Freedom Caucus, and then Kristi Noem became aware – thus the veto.

Governor Noem warned that the bill was already passing through several states, and if you look at the UCC Amendment tracking page [DATA HERE], she is correct. The states in green on the map below are states where the UCC revision bill has already been introduced.

As Daniel Horowitz notes in his initial warning dated March 2, 2023:

“The revisions to Article I are very clear now that Bitcoin will not be money, because even though the definition provides for electronic money … it says that an asset that is adopted by a government as its medium of exchange will not qualify as money … if the electronic asset, such as Bitcoin, existed before it was adopted by the government. So Bitcoin, of course, exists today; it existed before El Salvador adopted it as its currency … so it will never be money for UCC purposes. The same for other kinds of crypto currencies.” So there you have it. Officials clearly mean to pave the way for CBDC while explicitly barring all competition. (more)

This is obviously alarming.

Additionally, with the timing of this national revision taking place very quietly; and with the failure of SVB and Signature Bank following a few weeks later; and with specific impacts to the cyptocurrency market; one is left wondering if the current bank “failure” and Biden team intervention was not an intentional crisis with a motive to push government controlled central bank digital currencies into the mainstream.

In essence, was the SVB banking collapse, a designed crisis? And as a result, was the federal government response predetermined and just waiting to be triggered?

When asked last week why her legislature would do this, Noem responded the state politicians likely did not read the bill as it was constructed by lobbyists. Noem is exactly correct and hits on a subject we have discussed here frequently {GO DEEP}. However, one of the more alarming aspects to Noem’s discussion of the issue is that around 20 other states are considering similar legislation. WATCH:

Posted in Banking and Finance, Big Government, Big Stu
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