Category: Analyse technique Forex

Rig Count Drops For 3rd Time In 6 Weeks As US Shale Heavyweights Boost Production

The pace of US oil rig count growth has slowed dramatically in the last six weeks as the lagged response to oil prices indicated. While US oil production continues to trend higher, in lagged response to the rise in rigs, it is also nearing its apex. However, four U.S. shale companies recently reported second-quarter production that beat targets and increased their respective full-year output growth guidance.

This is the 3rd weekly drop in the US oil rig count in the last six weeks…

 

Crude Production (in the Lower 48) topped 9mm last week for the first time since July 2015, and this week it rose once again to a new cycle high…but judging by the slowdown in rig count growth, production may be set to slow.

 

However, despite the slowdown in US oil rig count growth, OilPrice.com’s Tsvetana Paraskova notes that US shale heavyweights are set to boost production this year.

In a sign that the U.S. shale patch is boosting output that has been keeping a lid on oil prices, four U.S. shale companies reported second-quarter production that beat targets and increased their respective full-year output growth guidance.

EOG Resources reported on Tuesday Q2 total crude oil volumes rising 25 percent to 334,700 barrels of oil per day, setting a company oil production record. The company raised its full-year 2017 U.S. crude oil growth target to 20 percent from 18 percent and total company production growth target to seven percent from five percent, keeping capital spending plans intact.

“EOG can continue to grow at strong rates within cash flow,” Chairman and CEO Bill Thomas said.

Devon Energy beat its midpoint guidance with Q2 net production averaging 536,000 oil-equivalent barrels per day, and said that it was on track to achieve its full-year 2017 production targets. The company cut full-year capital outlook by US$100 million, citing “strong capital efficiencies” and saying it is keeping planned drilling activity for the year.

Diamondback Energy reported Q2 2017 production 25 percent higher than in Q1 2017, and raised full-year production guidance by 5 percent.

Newfield Exploration Company also beat its production targets and increased the mid-point of its full-year 2017 domestic production outlook.

Newfield Exploration now estimates that its year-over-year domestic production growth, adjusted for prior-year asset sales, will be around 8 percent.

“In the best parts of the basins, shale is here to stay,” Rob Thummel, managing director at Leawood, Kansas-based Tortoise Capital Advisors LLC, told Bloomberg, commenting on the shale drillers’ Q2 updates and guidance.

U.S. drillers expect to continue raising production this year, but some are adjusting spending to the expected cash flows in the current oil price environment, after prices failed to rise as much as analysts and investors had expected a few months ago.

“$50 a barrel is still a pretty critical number and that number is going to be even more critical as we move into next year,” Tortoise Capital Advisors’ Thummel told Bloomberg, noting that the lower oil prices could mean that companies would not hedge production as much as they would at higher prices to protect future output.

*  *  *

Furthermore, OPEC compliance with production cuts agreed last year fell to 86 percent in July, according to a Bloomberg survey published on Aug. 1. That’s the second consecutive monthly drop — now at the lowest since January — and is down from 105 percent in April and May.

OPEC output rose by 210,000 barrels to 32.87 million barrels a day in July, driven by Libya, which added 180,000 barrels a day.

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Blue Apron Tumbles To Record Lows After Slashing Workforce By 24% (Just 36 Days After IPO)

As one veteran market participant exclaimed: “Seriously, how is that not illegal?”
Just 36 days after the company IPO’d to much CNBC-based applause and “the IPO market is back”, Blue Apron shares are languishing at record low $6.01 (down 45% from its h…

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‘Dr.Doom’ Warns “The Gap Between Wall And Main Street Is Widening… Correction Is Inevitable”

Authored by Nouriel Roubini, originally posted at Project Syndicate,
Now that US President Donald Trump has been in office for six months, we can more confidently assess the prospects for the US economy and economic policymaking under his administratio…

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EU Imposes More Sanctions Against Russia, Blacklists Deputy Minister

The European Commission has decided to broaden sanctions against Moscow on Friday. As RT notes, more Russian individuals and firms accused of delivering Siemens gas turbines to the Crimea have been blacklisted.

The updated blacklist includes Russian Deputy Energy Minister Andrey Cherezov, the head of the department of operational control and management in Russia’s electric power industry Evgeniy Grabchak and state firm Technopromexport CEO Sergey Topor-Gilka.

*  *  *

As we detailed earlier, this was expected.

The European Union is expected Friday to expand sanctions against Russian individuals and companies that were allegedly involved in the transportation of at least four Siemens turbines to Russian-controlled Crimea in violation of an international ban, according to Reuters.

EU states have until later on Friday to submit any complaints to the proposal to extend the Russia blacklist. Two diplomatic sources said it looked like there will be no obstacles and the decision will be taken.

 

Germany proposed last month to put four more Russian nationals – including from the energy ministry – on the blacklist, as well as three Russian firms, including the one that delivered the turbines to the peninsula.

 

EU states need unanimity to introduce sanctions and one source said, however, one of the names has been removed from the original proposal after Italian objections.”

The expansion puts the EU – and Germany in particular – in an awkward position: Representatives of the trade bloc have recently expressed outrage at the US over a sanctions bill signed by President Donald Trump that they say could unfairly infringe on the EU-Russia bilateral trade relationship.  

European Commission Chairman Jean-Claude Juncker earlier this week criticized the US for not consulting the EU before moving ahead with the sanctions bill, threatening reprisals should they damage bilateral trading relations. Trump reluctantly signed the sanctions into law earlier this week after expressing his displeasure with the bill in a signing statement that criticized Congress for further escalating tensions between the two countries.

According to Reuters, the US sanctions will make it more difficult for Russia to build two gas export pipelines to Europe. However, Reuters reports that the two projects are still expected to move forward. Last month, Russian oil giant Gazprom warned investors last month that the sanctions “may result in delays, or otherwise impair or prevent the completion of the projects by the group.”

“The Kremlin, dependent on oil and gas revenues, sees the pipelines to Germany and Turkey – Nord Stream 2 and TurkStream – as crucial to increasing its market share in Europe.

 

It also fears that Western partners – needed to develop the deepwater, shale and Arctic gas deposits that will fill the pipelines – will be scared off by sanctions.

 

Gazprom warned investors last month that the sanctions ‘may result in delays, or otherwise impair or prevent the completion of the projects by the group.’”

With this in mind, the Russian gas giant is taking steps to reduce the impact of sanctions, even as the heightened risks are expected to drive up costs and make it more difficult for Gazprom, the Russian oil giant that’s building the German Nordstream 2 pipeline.

“The price of any project automatically increases,” said Tatiana Mitrova, director of the Skolkovo Energy Center.

 

“Gazprom’s relationships with partners, subcontractors, and equipment and service providers are severely complicated,” she said. “They will all ask for a risk premium.”

Siemens, which insists that it was unaware that the turbines had been moved, has said in statements to the media that it was used as an “unwitting pawn” to help fulfill a promise made by Russian President Vladimir Putin to the people of Crimea. The company is calling for criminal charges to be filed against any Russians who helped orchestrate the move. Siemens originally sold the turbines to a Russian firm called Technopromexport.
 

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Only Employment Gains In The Past Year: Those With A High School Diploma Or Lower

In its latest, July, snapshot of the US economy, the NY Fed observed something startling, and which hasn’t received much discussion in the media: when looking at the June report, over the past year the only employment gains have gone to less educated A…

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Gold Tumbles To Key Technical Support As Dollar ‘Dead Cat’ Bounces

The Dollar Index is spiking phoenix-like from the flames of collapse this morning on the basis of one jobs number (and still-low Dec rate-hike odds). Gold is reacting to this kneejerk, tumbling over 1% and testing down towards its 50- and 100-day moving-average support…

We have seen this kind of squeeze in the dollar index before (cough last week after The Fed’s plunge)…

 

But gold is breaking down – running stops below the week’s flash crash lows and testing towards its key technical support…

Gold 50DMA at $1259.20, Gold 100DMA at $1260. Gold 200DMA at $1244

Stocks just  dropped into the red post-payrolls…

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Where The Jobs Were: Waiters And Bartenders Topped The List

We already showed that contrary to the strong headline payrolls print, the sole source of job gains in July was part-time jobs, which rose by 393K in the month, the biggest monthly increase since September 2016, as full-time jobs sunk by 54K. Which is …

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Jim Paulsen: “The Bull Market Could Continue Forever”

The stock market “has an awful good gig going,” according to Jim Paulsen, chief investment strategist at Leuthold, who appears capable of looking through the current collapse in ‘hard’ economic data, predicting a nirvana-like world ahead (sounding ominously like the “permanently high plateau” we’ve heard of before).

 

Speaking on CNBC’s Squawk Box this morning, Paulsen explained:

“We’ve got a fully employed economy, rising real wages. We restarted the corporate earnings cycle. We’ve got strong confidence among business and consumers.”

 

“The kick is we can do all of this without aggravating inflation and interest rates.”

 

“If that’s going to continue, I think the bull market could continue to forever.”

It seems ‘real’ macro data and the yield curve disagrees for now… but what do they know…

Paulsen goes on to hedge just a little…

Ultimately the bull market does continue until we aggravate some inflation, and until we have to raise bond yields and interest rates some more.”

 

“I think that’s going to happen eventually, but it doesn’t look like it’s going to happen anytime soon. So I think the bull probably continues through the end of this year.

As a gentle reminder, we have heard this kind of ‘everything is awesome’ chatter from Mr. Paulsen before…

July 14, 2008

Jim Paulsen, chief investment strategist of Wells Fargo’s primary investment unit, expects home prices to steady by year end, with the pace of foreclosures slackening shortly.

 

Most of the subprime debt at the center of the current crisis already has been written down by financial institutions, he notes, while many subprime borrowers who lost their homes are returning to rental units.

 

“Folks who compare this home-price cycle to the one that occurred in the early ’80s obviously have short memories,” Paulsen says.

 

“In the 1980s the economy was in a deep recession, mortgage rates were at 17% or more, and unemployment [was] hitting a post-Great Depression high of nearly 12%.”

The bottom line, as we noted earlier, is stock market investors better hope that the bond market investors are wrong.. but then again if bond buyers are wrong and rates rise, as Greenspan warned, “that is very bad for asset prices at current equity market valuations.”

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The Amazon Effect: Part Time Jobs Soar By 393K, Full Time Jobs Slide

On the surface the July jobs report was solid, with 209K jobs added, more than the expected, as the recent auto sector slowdown appears to skip the labor market (for now), with Trump quick to take credit for the report.

Excellent Jobs Numbers just released – and I have only just begun. Many job stifling regulations continue to fall. Movement back to USA!

— Donald J. Trump (@realDonaldTrump) August 4, 2017

However, digging through the numbers reveals some troubling features: while the Household survey reported that an impressive 345K jobs were added, more than 50% higher than the Establishment survey, the bulk of these jobs was part-time. According to the BLS, in July 393,000 part time jobs were added, offset by a drop of 54,000 full-time workers.

 

This was the biggest increase in part-time jobs going back to September 2016.

Having monopolized the retail sector (and branching out to others), is Amazon – which recently hired 10 part time jobs for every full time job – starting to dominated the lobs report next?

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