cant see how unless a change in law. but I am still staying clear. something has to give.
For what it' worth...the next bubble to pop (in my humble opinion) will be College Tuition....which was ALSO cause by government.
You can't pump american steel without at least saying 'X gonna give it to you'.
Having said that, it does look interesting. At the end of the day we are sitting in a commodities bubble that popped. Few dare to call this the most recent bubble because it was caused by the government (again).....QE did it this time. Last time it was dumb lending practices for mortgages. Here's the upshot. IN 12-18 month, oil, steel alum...etc will all be up at least 50% from where they are now and maybe 100% from where they eventually bottom.
I'm not ready to go long yet, but soon. And X might just be givin' it to me. 'What!!!!'
Not really. See that citi article that said rigs are 20% more efficient now. Somehow that means that we effectively have more rigs in terms of how much oil they may find now. Although- 'at some point' reducing would offset that. We are not at that point considering we have 5 times more rigs (not adjusted for efficiency) working right now than we did 5 years ago.
for what it's worth...
New Delhi (CNN)"India is about to take off."
That was the bold declaration from India's Finance Minister Arun Jaitley as he delivered his first full-year budget since his party won a resounding victory at the polls last May.
India's budget is a closely-watched TV event, with pre- and post-game analyses on every TV news channel. Even by those standards, Saturday's budget generated more interest than in previous years, in part because of soaring expectations on the new government.
Jaitley signaled in his speech that "incremental change" was not enough, as he announced a raft of measures to boost infrastructure and growth.
Among the key announcements, Jaitley promised that a widely anticipated national Goods and Services Tax (GST) would be implemented by April 1, 2016. As CNN has reported, India's states have a myriad of different taxes, making trading between them a nightmare.
A number of other announcements called for additional government spending in energy and housing. Jaitley announced an increase of $11.3 billion in infrastructure. He also promised a universal social security plan -- a vital need for India's millions of poor who have no access to pensions or health care.
i doubt he did that. i'm guessing it was one of our guys. killing that guy only makes putin look bad.
You mean the same bankers who destabilized the world economy for the foreseeable future and lied through their teeth while doing it, then got bailed out by taxpayer dollars? Right.
It probably will not do much. Putin is one of the most evil men currently in power on the planet, but everyone already knew that. This is only the most recent in a series of high-profile killings carried out almost certainly on Putin's orders. I am amazed to this day Khodorkovsky got out of there alive. Most were not so lucky.
I look forward to the day that dude is gone. Yeltsin was a complicated figure in Russian history. Often characterized as a drunken buffoon in the west, he was also the man who faced down the Russian parliament when they tried to seize power while Gorbachev was on vacation. He was a key player in the dissolution of the Soviet Union, the man who transitioned from perestroika and glasnost (which were meant to save the old system) to a new system entirely. He fought wars in Chechnya and called it a hotbed for terrorism in spite of western pressure, now largely gone after 9/11 and the Boston Marathon bombing, to "stop picking on those people".
But the most baffling decision Yeltsin probably ever made, and the one with the most grave consequences for Russia and the world on the whole, was to name that little monster Putin his successor.
I apologize Nattydred. My first sentence was too harsh and I should not have written it. Your point though sounded to me as if the media where misleading us on the point you made which is irrelevant in the sense that the rig count statistic, as imperfect as any stat can be, is simply an indicator as to how hard we keep looking for oil in North America. The fact is that in an even speedier / more efficient way than the OPEC would have done it (please bear in mind that even when they announce a cut many of them exceed their announced quotas) North America has dramatically slowed up looking for oil. The annoucements of cut CAPEX with 2014 Q4 results are probably even more indicative than the rig count. You may also have a look at the record number of inactive / mothballed floating rigs in Singapore. All this within less than two months... Please also bear in mind that oil is not natty (a commodity very expensive to export outside NA). Oil production / storage / rerouting to different markets / by-products (more plastic / asphalt roads, etc.) can be adjusted much faster than oil such that I don't expect a slow response to supply gluts as with natural gas.
Your initial point is interesting in that it highligths that had it not been for the increasing valuation of the USD, WTI would presently be at about $63 in terms of the USD/EU exchange rate of a year ago or so. However, I must agree with schlub and neodinium that the Euro, CAD, Yen, AUD, etc. can get to even lower levels toward the USD (thus, another headwind for oil priced in USD).
It went pretty unnoticed but, for instance, Canada's lowering of interest rate is in fact, IMHO, an example of a protectionist move trying to lower western oil producers' costs (Alberta) by weakening the currency. The trend is for more of that, not the opposite, such that the USD will keep on increasing in value toward these other developped countries currencies until we start to get real news of an economic recovery from also Europe and/or renewed double digit growth from China (and possibly India).
I repeat, I am presently bullish on WTI oil below USD 49 and bearish when it gets above USD 51. Mr. Market is pretty dumb and it is only since last November that we finally have a real market for oil. OPEC (the Saudis not to name them), were stealing everyone with WTI at USD 100.00. The question is how much is the commodity truly worth in CAPEX, pumping it, delivering it to Cushing while still making a "reasonable" (not too attractive for competing oil sources) profit. It is as ludicrous to pretend that it can be as low as USD 20 per barrel than it is that it to pretend that oil would be currently worth USD 100 in the current world economy.
Good luck to all!
I do understand that the rig count from 1995 to 2010 never exceeded 500. In 2011 to 2014 it shot up to nearly 1500. To say that a rig count as low as June 2011 means lower supply is ridiculous. It is three times the average count over the last 15 years. To stem supply you need to be watching the well count, which went up 5% in 2014. The well count will not decrease until rig count is well under 500. And that ain't gonna happen until the price of crude drops a lot more. Because at todays prices it still pays to have a 1000 rigs drilling away.
I think the trade you are advocating whether you realize it or not is to go long oil in euro terms. The QE announced by the European central bank hasn't even started yet. When they start buying the bonds next week rates there will plunge further the euro will weaken further and oil in euro terms may rise....a lot easier to just short the euro though
I'm long on TVIX. The markets have to correct eventually as most stocks are pretty expensive right now. And hopefully this news in Russia kick-starts the volatility.