IEA Sees World Oil Demand to Post Sharpest Decline in 18 Years
The agency estimated global oil demand this year at 83.2 million barrels per day (bpd), three percent lower than last year, ‘and the sharpest single year’s fall since 1981,’ in its monthly oil market report.
XX Sean’s note — the problem is, oil hasn’t been trading on fundamentals for months. It trades with the S&P 500, and both are anti-dollar plays now.
This chart of the S&P 500 is different than its ETF tracker, the SPY. The SPY chart shows the leading index at the bottom of its channel. The problem is that “everyone” is expecting a sell-off at this point. The market rarely does what everyone expects it to do, because that’s already been priced in.
So maybe what we’ll get is a rally sometime today. The question is, do we want to sell that rally, or buy it?
Meanwhile, there was disappointing economic news this morning. U.S. Producer prices rose 0.3% in April, and New jobless claims rise more than expected. In the past month, bad news has caused the market to rally. Will that happen this time?
IN OTHER NEWS
Silver: More Likely to Trade as Precious Metal than Industrial
Investment demand continued to be a key driver of silver in 2008, as 93.1 million ounces flowed into the three main exchange-traded funds for silver. At the same time, coin and medal fabrication jumped by a remarkable 63% to 64.9 million ounces as investors wanted more of them.
On the other hand, industrial demand dropped 1.4% from 2007 levels to 447.2 million ounces (still the second-highest reading ever).
On the supply side, mine production rose 2.5% in 2008 to 680.9 million ounces. However, with many base-metal mines closing, a great deal of byproduct production has been removed from the market. As a result, GFMS expects mine production to shrink this year.
Cargo Ships Jam Singapore Straits for Lack of Work
Hundreds of cargo ships — some up to 300,000 tons, with many weighing more than the entire 130-ship Spanish Armada — seem to perch on top of the water rather than in it, their red rudders and bulbous noses, submerged when the vessels are loaded, sticking a dozen feet out of the water.
So many ships have congregated here — 735, according to AIS Live ship tracking service of Lloyd’s Register-Fairplay in Redhill, Britain — that shipping lines are becoming concerned about near misses and collisions in one of the world’s most congested waterways, the straits that separate Malaysia and Singapore from Indonesia.
China said that its exports nose-dived 22.6 percent in April from a year earlier, while the Philippines said that its exports in March were down 30.9 percent from a year earlier. The United States announced on Tuesday that its exports had declined 2.4 percent in March.
Thriving Norway Provides an Economics Lesson
With a quirky contrariness as deeply etched in the national character as the fjords carved into its rugged landscape, Norway has thrived by going its own way. When others splurged, it saved. When others sought to limit the role of government, Norway strengthened its cradle-to-grave welfare state.
And in the midst of the worst global downturn since the Depression, Norway’s economy grew last year by just under 3 percent. The government enjoys a budget surplus of 11 percent and its ledger is entirely free of debt.
XX Sean’s note — before we all “go Norwegian,” here’s the real reason Norway is in great shape …
Norway is a relatively small country with a largely homogeneous population of 4.6 million and the advantages of being a major oil exporter. It counted $68 billion in oil revenue last year as prices soared to record levels.
Billions Withdrawn Before Madoff Arrest
About $12 billion was pulled out of accounts at Bernard L. Madoff’s firm in 2008, according to several people briefed on an analysis of Mr. Madoff’s business records. About $6 billion, or half, was taken out in just the three months before the financier was arrested in December and charged with operating an extensive Ponzi scheme, these people said.
US ‘Sham’ Bank Bailouts Enrich Speculators Says Buy-Out Chief Mark Patterson
The US Treasury’s effort to stabilise the banking system through the TARP programme is a hopelessly ill-conceived policy that enriches speculators at public expense, according to the buy-out firm supposed to be pioneering the joint public-private bank rescues.
“The taxpayers ought to know that we are in effect receiving a subsidy. They put in 40pc of the money but get little of the equity upside,” said Mark Patterson, chairman of MatlinPatterson Advisers.
The comments are likely to infuriate Tim Geithner, the US Treasury Secretary, because MatlinPatterson took advantage of the TARP’s matching funds to buy Flagstar Bancorp in Michigan. His confession appears to validate concerns that the bail-out strategy is geared towards Wall Street.
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