Brokerarena

United States will probably outpace all its rivals on the oil market in terms of export growth next year, forecasts Citigroup.

Amid robust output increase in the United States to unprecedented levels and considering production caps imposed inside OPEC members, the US will probably become the world’s largest exporter of black gold, Citigroup believes.

According to the US Department of Energy, last week US oil exports rose to the new record highs of 8.3 million barrels per day. At the same time Saudi Arabia has been exporting 9.3 million barrels and Russia 7.4 million barrels, calculated in the bank. Continue reading

Hedge funds keeps scaling back wagers on oil growth after a two-week break. Swap dealers do not lag behind.

Hedge fund portfolios had 461,8 thousands long contracts and 37,6 thousands short contracts in the week ending in April 4. So the total net long position for crude shrunk to 424.3 thousand contracts, which is 43.8 thousand contracts less than a week earlier. The gap between the record volumes set at the end of January rose to 71.9 thousand contracts.  Commodity swap activity from the swap dealers accounted for the respective cut of hedge funds longs Continue reading

Before we start talking about dollar, stocks and Smart money flow indicator I would like to share with you a quick set-up for AUDUSD before RBA cash rate decision on Tuesday.

The reason to be bullish on AUDUSD is a lag of RBA policy comparing to its counterparts like ECB or Federal Reserves, what may cause money outflow from the Australia what is not good. The policymakers in Australia will be possibly forced to support AUD with hawkish comments after a long dovish period. Continue reading

EURUSD has been long staying in the range 1.21-1.25 throughout this year but firm expectations on ECB tightening points to gaining strength for further upside movement.

The currency pair driven to multi-year lows on massive ECB stimulus measures turned to consolidation at the start of 2017 and later moved to growth on signals of policy tightening. Since then, the buck erased almost 20% against european currency. It would seem that such movements are more typical for Continue reading

Trump’s tax reform will not only leave marked footprint on corporate profits but also pose a big threat to the oil market.

Recall that in December last year, Donald Trump and Republican party successfully pushed the bill featured with massive tax cuts. Its too early to say what will be the precise impact on corporate earnings and social welfare. But the distinguishing thing is that sharp increase in oil production followed the Republican’s victory. The output boost can be attributed to mere coincidence but for oil traders it was completely unexpected outcome. Continue reading

Saudi Arabia Oil supplies

After a short break Saudi Arabia continued to increase oil exports from the country.

According to JODI, the Middle East Kingdom supplied to the world market more than 7 million barrels per day in November, marking the growth of export for two consequent months. Continue reading

Oil speculations helped US oil firms to cover 10% of drilling costs

The collapse of oil market started in the middle of 2014 and turned to recovery in the beginning of 2016 year when priced finally returned to upward trajectory. For this time United States managed to accumulate reserves and sell them in profit later.

Active stage of amassing crude reserves started in October 2014 and continued till the end of March 2017. Enjoying underpricing United States bought 211.2M barrels with average price of $50 per barrel. About $10.6 billion were spent for buying cheap oil. Continue reading

The oil market has been facing a deficit of crude oil for the third quarter in a row, OPEC reported in its monthly review on Thursday.

According to the organization research, the demand for black gold outpaced supply by 0.9 million barrels per day in the fourth quarter of 2017. According to the cartel’s forecast, world oil consumption in the first quarter of this year will amount to 97.2 million barrels per day. Decrease in demand compared to the fourth quarter of 2017 may result in a supply glut. For example, if the volume of production in OPEC does not change Continue reading

Hedge funds on the West staged profit taking move before the New Year and opted to start from a scratch the positioning in the new year. But Swap dealers NYMEX keep holding enormously high number of short positions, expecting major drawdown.

As of January 2, the volume of long positions in commercials decreased by 17.4 thousand contracts to 436.1 thousands. The amount of open short positions remained practically unchanged and at the start of the year was about 39.7 thousand contracts. Net “long” for crude oil, in turn, dropped to 396.4 thousands, but it is still above the average of the last three years by 186 thousand contracts, or almost twice. Continue reading

Cash inflow in biggest US ETF November

Recently unqualified investors have been heavily taking long positions on US stocks with unprecedented rush, reported Ameritrade brokerhouse, which has a client base of 6M traders.

The dynamics of biggest ETF fund in the US – ETF SPY, which mirrors movement of S&P 500 index shows that the cash outflow turned to abrupt cash inflow signaling growing calm among investors. From the start of 2017 to 20 of November the outflow amounted to 14.3B dollars, but a month later investors poured back 16.8B dollars, pulling the fund’s size curve into positive area. A similar trend occurred during the peak of «Trumpenomics» euphoria in March which then gave place to market anxiety and expectations of stock market retracement.

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Mixed sentiments

Hedge funds continue to step up with bullish pressure on oil. Before the meeting of OPEC + in Vienna, their short positions on black gold came close to the lowest levels ​​of last three years.

By November 28, hedge fund portfolios had 436,600 long and 40,1 thousand short positions. For a week, their longs increased by 26.8 thousand contracts, while short decreased by 25.9 thousand. Thus, the net long position on oil rose to 396.5 thousand contracts. Thus, only 17.2 thousand contracts are missing to the record.

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US Output

With the upturn on energy market driven by various disruptions and OPEC pledge to keep production depressed for more, US crude output is on track for a new record. But now the industry seems to be learning how to live together with a new rival, rather than fighting with it.

According to EIA, US October output could set a new record of 6.1M b/d. The last high was reached on March 2015, when shale producers was extracting 6.09M barrels from their wells. It isn’t a finalized reading though, as the Energy department will revise it soon. Haynesville and Utica low-output regions has been excluded from the list because they account for only 70K b/d both. EIA forecasts that shale producers will rise to 6.28M barrels in December, pushing limits further.

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Oil output in the United States hit new record, rising above the last by 10K barrels. Oil market pretends the output rally doesn’t bother it.

According to the US Energy Department the average daily output advanced to 9,62M barrels. The last record was set in June 2015 when the «Great» advent of shale oil brought production to whopping 9,61M barrels per day.

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The higher cliff, the louder fall

While speculators are boosting long positions on crude and paring down shorts, smart money are actively hedging themselves against drawdown of the prices.

According to CFTC data, hedge funds portfolios added 387.5K longs and 106,2K short positions. Therefore net long bets rose by 281,2K. The weekly change is still below the February upsurge when money managers additionally poured 413,6K long contracts. Continue reading

Reuters forecasts

Oil is likely to extend rebound next year but periods of smooth rally are likely to follow severe volatility breaks. OPEC output cap probably stretched for the end of next year is projected to offset increase in US oil production returning global reserves to 5-year average.

As a Reuters study showed, analysts raised their oil price projections, as market hopes for more OPEC concessions were confirmed by statements of Saudi officials.

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US oil producers are increasing oil supplies to Asia undermining market power of OPEC in this region, which remains core consumer for the cartel.

For Asian buyers, this is a welcome event. They benefit from the diversification of the sources of oil supplies as well as rising competition between suppliers, which leads to price wars. Simply put, asian oil refineries are getting more suppliers to work with and thus more choice in terms of grades of oil. India received the first cargo of American oil – 1.6 million barrels on October 2 – a result of the June visit of country’s Prime Minister Narendra Modi to the United States, during which agreements were signed for the supply of 8 million barrels of oil to India. Continue reading

Gold price was stable above the psychological level of $ 1.300 on Monday amid concerns over Iran’s nuclear program, while strengthening of the dollar restrained the asset’s growth. Price was at $1.304.50 per troy ounce, compared with $1.304.47 an ounce at the close of trading on Friday. Futures for gold in the US for December delivery went up by $2.2 to $1.306.9 per ounce.

The dollar advanced at the first day of this week but lost momentum for the Yellen-fueled rally, while Asian stocks jumped to a maximum of 10 years, as China’s buoyant economic data contributed to higher commodity prices. Continue reading

BoE rush in rate hike may be unjustified

US credit rating Standard & Poor’s expressed doubts that British economy needs interest rate hike saying BoE aims at specific targets such as curbing import prices growth and offsetting effects of excessive Pound devaluation.

“In general, we believe that the recent statements of the Bank of England and Mark Carney are primarily aimed at supporting the pound to reduce the pressure of imported inflation,” wrote S&P analyst. Continue reading