As Progressives act ashamed republicans would be demanded out of office for the same crime. Heck, if you remember the Volkswagen add that the beetle could float on water and if Ted Kennedy drove one of those he might have been President. Well my fellow Americans let’s stop living their LIES and be accountable. And help another FBI Director and point him in the right direction of who to investigate. Any ideas Comey?
As I enjoyed leaving the city and seeing farmland this Thanksgiving weekend I noticed the harvest in Northern Illinois and Southern Wisconsin. I did see most of all the harvest was complete and did surprisingly see some Corn not harvested where farmers decided to do the chop before next year’s planting season begins with Silos and Elevators full to capacity they may be wondering if they will get a break in the next month’s coming. In the overnight electronic session the December Corn is currently trading at 341 which is 1 ¼ of a cent lower. The trading range has been 342 ½ to 340 ¾.
On the Ethanol front there was quite a bit of activity in last night’s action with the January contract outpacing the December contract with Open Interest at 997 contracts versus 622 contracts. The December contract is currently at 1.382 which is .011 of a cent higher. The trading range has been 1.387 to 1.367.
— Daniel Flynn
The Energy Report: OPEC time in the city
Oil prices are getting geared up for the OPEC/Non-OPEC meeting in Vienna, Austria. At this meeting it is widely expected that the players involved will extend cuts throughout the rest of next year, despite some lingering geo-political and shale oil concerns. This meeting comes as oil prices pull back from a two and a half year high and global supply is tightening.
Some are concerned that the rising tensions between Saudi Arabia and Iran could derail a deal but that is not likely to happen. Both countries need high oil prices right now and the Iranians can’t really ramp up production very much anyway. They seem to have a common bound when it comes to high oil prices.
The Russian oil companies are crying poor, as they watch some of their market share get eclipsed by U.S. oil exports but despite those concerns the Russians are already laying the groundwork for the production cut extension. Reuters reported that Russian Energy Minister Alexander Novak said on Friday that Russia would discuss the details of an extension on Nov. 30, but made no mention of how long this should last beyond its March expiration.
Bloomberg News reported that “global oil demand is a critical factor that will be at the top of minds when OPEC and non-OPEC members discuss their next policy moves. The main driver of oil prices in recent months has been the strong and improving outlook for global growth. The International Monetary Fund has revised up its global growth outlook, and euro zone and U.S. manufacturing PMIs have been on a tear. There have also been important improvements in China, where the Caixin manufacturing PMI has shown an impressive rebound from a manufacturing recession between December 2014 and June 2016.”
Yet, at the same time the market is showing concern about a big drop in Chinese stocks. China stocks dropped again today, sending the benchmark Hang Seng index gauge to its lowest level in three months. Oil traders are a bit worried about this market shake up as it was a drop in Chines stocks two years ago that caused oil to crash to $26 a barrel area. While we seem to be on more solid footing the trade is taking some profits early.
And while shale oil is on the rise can it be as much as a factor as some hoped? Reuters news reports that U.S. crude oil production has risen by 15 percent since mid-2016 to 9.66 million barrels per day (bpd), not far from top producers Russia and Saudi Arabia. Rising drilling activity means output is likely to grow further. U.S. energy firms added oil rigs last week. The monthly rig count rose for the first time since July, to 747 active rigs.
Still in the big picture the increase is shale oil has not kept pace with OPEC cuts at 1.8 million barrels a day as well as rising global demand at close to 1.8 million barrels a day. The market is also finding out that it may get squeezed by a lack of investment in traditional energy projects. A trillion of dollars of capital spending cuts is already coming back to haunt this market today and in the coming years. That is why we should see supply continue to tighten dramatically moving forward.
Diesel supply is still a big issue. Refiners must continue to ramp up production to meet short supply. Gas prices should also stay strong as the holiday travel weekend was the best since 2005.
Natural gas is trying to make a comeback as some weather forecast are turning a bit colder. Still this market is having a hard time rallying into warm weather.
Traders will also look for news about the Keystone Pipeline. If it is down, it is reducing supply to refiners by 590,000 Barrels per day.
— Phil Flynn
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