The Morning After: Surveying Brexit Damage

It all started at exactly 5:01 pm ET Thursday evening. That’s when the following headline hit the terminal: NIGEL FARAGE: LOOKS LIKE REMAIN WILL EDGE IT: SKY Hallelujah. This week’s risk-on sentiment was justified after all. They’ll be no “Brexit” on our watch. Take that, anyone long yen. Then, exactly one hour and 53 minutes…

Analysts See Oil Rising To $80 As Saudis Say Supply Glut Over

The great crude debate continues unabated. Earlier this week, Raymond James made the case for $80 crude in 2017. What’s particularly amusing there is that while the firm will look ridiculous if they’re wrong and if we have, as some analysts contend, entered a “new oil order” where prices will remain subdued indefinitely, one of…

Mind The “Fracklog”: Here’s Why Oil Prices Can’t Sustain A Near-Term Bounce

There are two reasons why oil prices will have a difficult time sustaining a rally above $50/bbl. One reason is heightened tensions between Saudi Arabia and Iran. We’ve discussed this dynamic here before. Essentially, Iran is angling to ramp production to 4 million b/d. The (former) pariah state has already brought output back up to…

Stocks, Bonds, Commodities, And Gold: Trading Brexit

The good thing about the Brexit referendum is it’s this week. That rules out the painful prospect that we’ll have to endure the type of summer we suffered through last year when there was a Greece headline every five minutes on market days and every 10 minutes on weekends. Sure, there’s some event risk here,…

This May Not End Well: Energy Junk Bonds Stage Comeback With Oil At $50

Last month, Goldman put the exclamation point on a relentless move higher for crude prices when the bank wrote the following in a widely circulated note: “The physical rebalancing of the oil market has finally started. While supply and demand surprised to the upside commensurately in 1Q16, leaving the market oversupplied by 1.4 mb/d, we…

Is Saudi Arabia Ripe For A Cultural Revolution?

"No explanation was offered as to how any of these targets could be realistically achieved within their timeframe." Or any explanation at all really. The quote excerpted above from Foreign Policy references Saudi Arabia and the kingdom's "Vision 2030" which, if you’ve closely followed Ryadh's descent into the red ink budget abyss, you know it…

Brent Tops $50 On Hopes The Oil Rout Is Over - But Is The Move Sustainable?

Well, the big story today is again crude, as Brent topped $50 (before pulling back) putting pressure on the dollar in what will continue to be the most important market tug-of-war when it comes to how risk is bid. Earlier this month, I explained that everything seems to be trading off of oil, which isn’t…

Morgan Stanley Warns On Oil: “The Market Is Not Healthy”

Ask analysts about crude’s rather dramatic rebound off of the January lows to nearly $50 and you’ll probably get a variety of answers referencing any number of data points that purportedly signal a shift in the supply/demand picture. Barclays, for instance, sees the market swinging to a supply deficit in 2017. But the reality heading…

Bulls Run As Goldman Oil Call Sparks Rally

If everyone is being honest, forecasting commodities prices further out than say six or so months is well nigh impossible. There are just too many inputs. That goes double for oil, the most financialized of all commodities. As I wrote last week, the market is now trading almost exclusively off crude. Sure, there are myriad…

“Crude” Reality: This Market Is Driven By Oil

Don’t kid yourself. It doesn’t matter who you are or what you’re trading, it’s all about oil these days. If you don’t buy that, then have a look at the carnage that unfolded in January. Sure, some of it was attributable to the hangover from the first Fed hike in nearly a decade and the…

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