Oil and macro: US net oil imports lowest since 1990, Saudi 'goosing' oil prices? China's lending crackdown, Brent Crude (ICE) $63.07



1 Dec 2017: US net oil imports lowest since 1990, Saudi 'goosing' oil prices? China's lending crackdown, Brent Crude (ICE) $63.07

Hey OPEC, the World's Largest Oil Consumer Needs a Lot Less Oil By Laura Blewitt  and Javier Blas November 30, 2017 -- U.S. net oil imports, including crude and refined products, last week dropped to just 1.77 million barrels a day, the lowest level in data going back to 1990, the U.S. Energy Information Administration reported Wednesday. That puts the country on track toward its lowest monthly imports since before the Arab oil embargo of 1973. Weekly net imports peaked in November 2005 at more than 14 million barrels a day.

Aramco IPO: The Right Company At The Wrong Time Nov.13.17 by Albert Goldson -- An Aramco IPO represents a political tripwire endangering Saudi sovereignty over their oil resources. Crown Prince Mohammed bin Salman’s internal crackdown consolidates his power and gives him an open road to his ascendency as Saudi king before the November 30th OPEC meeting. Saudi Arabia’s deliberate inflammatory spat with Iran is misdirection from their internal political shakeup that is simultaneously ‘goosing’ oil prices to their benefit.

China's Lending Crackdown Is Notable for Three Reasons. The platforms have mushroomed from fewer than 10 to more than 2,000, but only a few hundred operate with government-issued permits, By Junheng Li November 30, 2017.... Although the measures haven't been made public, our industry checks suggest three notable changes. First, the issuance of new licenses to online micro-loan platforms is being suspended, suggesting that regulators are scrutinizing online lending practices. Second, banks and bank-holding companies are being told not to buy loans underwritten by online platforms because such assets are deemed too risky. Third, turning the loans into securities will be forbidden because regulators believe securitization amplifies risks and gives investors less of an incentive to perform due diligence on the underlying assets.

15 Jun 2017: Oil traders talk of a buyer’s market for light-sweet crude, China targets financial risk, lack of new safe-haven assets, Singapore feud, Exxon and climate change, Brent Crude (ICE) $46.95

Fed Lifts Rates, Sets Out Plan to Shrink Assets - The Federal Reserve said it would raise short-term interest rates and spelled out in greater detail its plans to start slowly shrinking its $4.5 trillion portfolio of bonds and other assets this year

Anbang Shows Billionaires Should Be Nervous in Xi's New China by Keith Zhai  and Ting Shi June 14, 2017 -- Insurance giant’s chairman mysteriously absent from company, Xi targets financial risk, asserts power before party congress

SIBLINGS OF SINGAPORE PM FEAR FOR THEIR SAFETY, ACCUSING HIM OF HARASSMENT AND TRASHING LEE KUAN YEW’S VALUES - ‘We feel big brother omnipresent. We fear the use of the organs of state against us’ BY BHAVAN JAIPRAGAS 14 JUN 2017

The Lonely Drifting Oil Tanker That Signals OPEC's Struggle by Laura Hurst  and Javier Blas June 13, 2017, 7:57 PM GMT+8 June 14, 2017, 1:36 AM GMT+8 -- Atlantic oil market oversupplied on Nigeria, Libya production. Oil traders talk of a buyer’s market for light, sweet crude...

Gasoline’s Unusual Summer Stockpile Surge Weighs on Oil By Laura Blewitt June 15, 2017 -- Gasoline inventories are moving in the wrong direction this summer, rising the most in the first two weeks of June since 2001. The U.S. is hoarding more than 242 million barrels of gasoline, the highest for this time of year in weekly data going back to 1990. The surge in stockpiles sent gasoline futures on the New York Mercantile Exchange plunging to the lowest since late November at $1.4294 a gallon and pulled crude oil below $45 a barrel.—With Michael Roschnotti

The Global Economy Is Rebounding, But There’s One Big Problem by Chris Anstey  and Enda Curran June 14, 2017, 12:01 AM GMT+8 June 14, 2017, 2:26 PM GMT+8
There’s a dark cloud building behind the world’s best period of synchronous growth among developed and emerging economies this decade -- one that in time could rain down volatility in global markets... The problem, identified by strategist and hedge fund manager Stephen Jen, is a deepening imbalance in the lack of new safe-haven assets as the world’s output expands.

Shareholders force ExxonMobil to come clean on cost of climate change: The ExxonMobil resolution, introduced by the New York State Common Retirement Fund, says that the company “should analyze the impacts on ExxonMobil’s oil and gas reserves and resources under a scenario in which reduction in demand results from carbon restrictions and related rules or commitments adopted by governments consistent with the globally agreed upon 2 degree [Celsius] target”. The resolution adds: “This reporting should assess the resilience of the company’s full portfolio of reserves and resources through 2040 and beyond, and address the financial risks associated with such a scenario.”

13 Feb 2017: Asia's potential trade hot spots, India oil demand plunges on cash ban 

Asia's Potential Trade Hot Spots February 13, 2017 -- Most of Asia has largely escaped President Trump's glare on trade, but he may yet come looking. The U.S. runs trade deficits with many of its partners in the region. Bloomberg's Haslinda Amin reports on "Bloomberg Markets." (Source: Bloomberg)

These Countries Could Be Trump's Next Trade War Targets by David Tweed -- U.S. has trade deficits with most Asian trade partners. Vietnam surplus with U.S. represents 15% of the economy... 

China Ready to Step Up Scrutiny of U.S. Firms If Trump Starts Feud: Sources by Bloomberg News January 6, 2017 -- Options include antitrust, tax probes of American companies. Tension has been building in run-up to Trump’s inauguration

India’s Oil Demand Plunges Most in 13 Years Amid Cash Ban by Saket Sundria February 13, 2017

12 Feb 2017: China - Companies asked to estimate highest duties they can bear for punitive US tariffs; Malaysia-Thailand have significant good trade surplus with US 

Editor's note: Malaysia and Thailand have significant surplus in trade with US; with each of these two, US faces deficits that are 1/3 of the goods trade deficit that it has with Mexico. From US Census Bureau, ''trade in goods" data: US-Singapore in surplus $8-12b, US deficit trade partners: US-Indonesia $12b, US-Thai $19b, US-Malaysia $22b, US-Mexico $63b, US-EU $130b, US-China $300-360b.

China Said to Assess Impact of Possible Punitive U.S. Tariffs by Bloomberg News February 10, 2017 -- Companies asked to estimate highest duties they can bear, Donald Trump has accused China of unfair trade practices --

Trump Holds Call With China's XI, Honors One-China Policy February 10, 2017  -- President Donald Trump reaffirmed the U.S.'s long-standing support for the "One-China" policy in his first phone call as president with Chinese counterpart Xi Jinping. Bloomberg's David Tweed reports on "Bloomberg Daybreak: Europe." (Source: Bloomberg)

OPEC's Amazing and Shortlived Compliance By Julian Lee Feb 12, 2017 -- At 90 percent, it looks like January may be as good as it gets for compliance. We may have another month or so before Saudi Arabia needs to choose between cutting exports or boosting supply, but it is difficult to see overall adherence getting much better without involuntary cuts somewhere due to accident or unrest.

How Singapore plans growth in dark globalization mood -

26 Jan 2017: Trump Has 1.3 Billion Reasons Not to Pick a Big Fight With China Malaysia-China trade likely to rise to US$100b, China overtakes Japan in Indonesia direct investment, Brent Crude $55.40

Trump Has 1.3 Billion Reasons Not to Pick a Big Fight With China by Bloomberg News January 26, 2017 - Xi has little room to make concessions before party congress, China leaders already fanning national pride, stressing unity

Minister: Malaysia-China trade likely to rise to US$100b this year anuary 23, 2017 - See more at:

Hishammuddin: Malacca port not Chinese military naval base January 25, 2017 - See more at:

China overtakes Japan in Indonesia direct investment - Chinese money flowing into the country grew fivefold from a year ago by WATARU SUZUKI and ERWIDA MAULIA, Nikkei staff writers January 25, 2017;

Chinese billionaire Jack Ma says the US wasted trillions on warfare instead of investing in infrastructure by Jay Yarow 18 Jan 2017 -- Ma called outsourcing a "wonderful" and "perfect" strategy... "The American multinational companies made millions and millions of dollars from globalization," Ma said. "The past 30 years, IBM, Cisco, Microsoft, they've made tens of millions — the profits they've made are much more than the four Chinese banks put together. ... But where did the money go?" ... He said the U.S. is not distributing, or investing, its money properly, and that's why many people in the country feel wracked with economic anxiety. He said too much money flows to Wall Street and Silicon Valley. Instead, the country should be helping the Midwest, and Americans "not good in schooling," too....

China’s Debt-Trap Diplomacy JAN 23, 2017 13 by BRAHMA CHELLANEY  -- Of course, extending loans for infrastructure projects is not inherently bad. But the projects that China is supporting are often intended not to support the local economy, but to facilitate Chinese access to natural resources, or to open the market for low-cost and shoddy Chinese goods. In many cases, China even sends its own construction workers, minimizing the number of local jobs that are created.... Several of the projects that have been completed are now bleeding money. For example, Sri Lanka’s Mattala Rajapaksa International Airport, which opened in 2013 near Hambantota, has been dubbed the world’s emptiest. Likewise, Hambantota’s Magampura Mahinda Rajapaksa Port remains largely idle, as does the multibillion-dollar Gwadar port in Pakistan. For China, however, these projects are operating exactly as needed: Chinese attack submarines have twice docked at Sri Lankan ports, and two Chinese warships were recently pressed into service for Gwadar port security.

21 Jan 2017: Trump’s Tough Talk Further Rattles World Capitals, Full Inaugural Address video, Jack Ma says the US wasted trillions on warfare, China growth slips, U.S. Oil Producers Ramp Up Spending, Brent Crude $55.49

U.S. Oil Producers Ramp Up Spending - Companies are optimistic that higher crude prices are here to stay By ERIN AILWORTH Updated Jan. 20, 2017 -- U.S. oil producers, optimistic that higher crude prices are here to stay, have issued 2017 budgets that call for dramatically greater spending to tap new wells.

Trump’s Tough Talk Further Rattles World Capitals on Day One by Nick Wadhams  and Josh Wingrove January 21, 2017 -- Pledges to ‘reinforce old alliances and form new ones’. Speech fuels concern in world capitals on U.S. leadership

President Trump's Full Inaugural Address 1/20/2017 -- President Donald Trump delivered a 16-minute inaugural address on Friday that will be remembered for its populism and defiance.

Transcript: President Donald Trump’s 2017 Inaugural Address

Buffett Supports Trump on Cabinet Picks ‘Overwhelmingly’ by Amanda L Gordon  and Noah Buhayar 20, 2017

Chinese billionaire Jack Ma says the US wasted trillions on warfare instead of investing in infrastructure by Jay Yarow 18 Jan 2017 -- Ma called outsourcing a "wonderful" and "perfect" strategy..."The American multinational companies made millions and millions of dollars from globalization... The past 30 years, IBM, Cisco, Microsoft, they've made tens of millions — the profits they've made are much more than the four Chinese banks put together. ... But where did the money go?" ... He said the U.S. is not distributing, or investing, its money properly, and that's why many people in the country feel wracked with economic anxiety. He said too much money flows to Wall Street and Silicon Valley..

Chinese growth slips to slowest pace for 26 years - With fears about the Trump presidency, rising debt levels and an unwinding property boom, the world’s No 2 economy is set for an uncertain 2017  by Katie Allen 20 January 2017 16.04 GMT

18 Jan 2017: China’s Xi Jinping Seizes Role as Leader on Globalization, Trump favors a weaker dollar.

China’s Xi Jinping Seizes Role as Leader on Globalization, 
‘No one will emerge as a winner in a trade war,’ Chinese president says  By STEPHEN FIDLER in Davos, Switzerland and TE-PING CHEN and  LINGLING WEI in Beijing Jan. 17, 2017... In a keynote address, Chinese President Xi Jinping issued a full-throated defense of international trade and economic integration, portraying Beijing as a benevolent power intent on upholding an international order that has boosted common prosperity. With doubts about the merits of globalization mounting in the U.S. and elsewhere in the West, Mr. Xi’s speech was portrayed by some who saw it as a move to fill a global leadership vacuum. Some in the audience questioned China’s readiness. Mr. Xi, the first Chinese head of state to attend the forum, also offered an implicit rebuke of Mr. Trump, who has threatened to impose tariffs on China. “No one will emerge as a winner in a trade war,” he said.

Dollar Tumbles on Trump Comments - Dollar falls to one-month low after President-elect Donald Trump describes it as ‘too strong’ By CHELSEY DULANEY,  IAN TALLEY and IRA IOSEBASHVILI Updated Jan. 17, 2017 -- Mr. Trump said in an interview published Monday that he favors a weaker dollar, breaking with decades of tradition and intensifying investor concern over the new administration’s capacity for surprising policy shifts. Still, with markets improving and a pro-business administration poised to take over in Washington, the mood among global corporate and financial leaders in Davos is upbeat...

16 Jan 2017: Malaysia (with China) to challenge Singapore on logistics. High level questions on China's impact on Malaysia jobs, land and more amidst general pessimism. Oxfam targets feted billionaires and says to curtail rewards for those at the top.

Editor's note: From talking to Malaysia business stakeholders on China-Malaysia economic ties, I have been hearing for perhaps two years about their hope of China investments helping Malaysia gain market share on Singapore (harking back to the Mahathir vs LKY FDI plays?). In Singapore, there seemed assurance on good relations with China and that interests would prevail rather than contests. In recent weeks, regional news headlines is replete with economic implications arising from China's shifting relations in the region. Notably, SCMP reported on some (unofficial) negative opinions from China on Singapore, and then came the seizure of Singapore military vehicles in transit in HK. See news links below for comments on a potential renewed logistics role tussle.

How will Singapore navigate the choppy regional waters? By The Edge Singapore /   | January 13, 2017

China projects to hit Singapore BY HO WAH FOON 15 January 2017 -- “This is a dream of a lifetime for Malaysia to eventually stop cargoes transiting through Singapore, with the generous inflow of direct investments and expertise from China now. In 10 years or so, Malaysia can say bye-bye to Singapore,” says a veteran port operator and logistics consultant with experience in Malaysia, Singapore and China.... 

We are not selling off country to foreigners, says Najib 16 January 2017 --

Muhyiddin slammed for China deals remark BY THO XIN YIandGAN PEI LING 11 January 2017 -- MCA president Datuk Seri Liow Tiong Lai slammed Muhyiddin’s claim as ‘illogical’. “It seems that he has changed his mind after shifting his political alliance. “When he was deputy prime minister, he led missions to China to attract Chinese investors to Malaysia.

Foreign ownership of land, clear policy needed BY SALLEH BUANG - 12 JANUARY 2017 Read More :

DPM: Malaysians have right to assess working visit to China January 15, 2017 -- Zahid discussed the recognition of halal goods in China, especially in Yunnan province, which has great potential for Jakim and the Halal Industry Development Corporation (HDC). He identified problems faced by Yunnan entrepreneurs wanting to export their goods since Malaysia and China have yet to sign a Free Trade Agreement (FTA). On tourism, Zahid said he was waiting for feedback from the Chinese side on what more can be done to draw more tourists from the country to visit Malaysia. Tourist arrivals from China surged following the visa waiver or ENTRY (electronic travel registration) a year ago. ....

Malaysians’ views on economy, politics at record lows, FT survey finds January 4, 2017 -- While the rest of Asean is unanimously predicting improvements in both areas, Malaysians responding to FT Confidential Research’s Economic Sentiment and Political Sentiment held opposing views about their own country. “Malaysians were the most pessimistic respondents in the Asean region, being the only ones expecting their domestic political and economic situations to deteriorate over the next two quarters,” FT wrote. ...

Oxfam targets feted billionaires and says to curtail rewards for those at the top...

11 Jan 2017: Big Oil Hits Sweet Spot, Oil Discoveries Seen Recovering After Crashing to 65-Year Low, Chinese Companies Find New Ways to Borrow, Go-Jek,  BHP Held Talks With Trump, Brent crude $53.77

Big Oil Hits Sweet Spot as New Projects Reap Rewards of Recovery by Rakteem Katakey January 11, 2017

Oil Discoveries Seen Recovering After Crashing to 65-Year Low by Mikael Holter January 10, 2017 Explorers found 3.7 billion barrels in 2016: Wood Mackenzie. Last year will probably be the low point for discoveries...

Strapped-for-Cash Chinese Companies Find New Ways to Borrow by Bloomberg News January 11, 2017 ABS sales by Chinese companies more than doubled last year. Doubts about ring-fencing of collateral for ABS: Genial Flow.

Indonesia’s First Billion-Dollar Startup Races to Kill Cash by Yoolim Lee January 11, 2017

Uber Problem. Go-Jek Solution By Tim Culpan Jan 10, 2017 -- For sure, the Indonesian unicorn is entering a crowded and competitive market where Grab Taxi, Lippo Group and Ascend Money are vying for the same mobile-payments business. I'm not even convinced that Go-Pay will be the leading player, but it doesn't have to be. All Go-Pay has to do is make life easier for Go-Jek customers and service providers and not lose money (easier said than done).

BHP Held Talks With Trump Amid China Tariff, Climate Concerns by David Stringer January 11, 2017 -- BHP CEO, chairman met with president-elect in New York. Trump’s infrastructure pledges seen as positive for demand... Trump’s signals that he could spend as much as $500 billion to rebuild U.S. infrastructure lifted metals and producers in the wake of his election, promising to bolster global demand and add to a commodities price revival driven in 2016 by stimulus in China. The Bloomberg World Mining Index has advanced about 4 percent since Trump’s victory in November, while the London Metal Exchange Index of six key metals jumped about 6 percent....

5 Jan 2017: Gloom on Malaysian Ringgit and Singapore seeks new growth, economic forecasters on 2017, bond market outlooks, read Stiglitz, Brent Crude $56.26

Things Will Get Worse for the Malaysian Ringgit: BMI Research by Will Davies January 5, 2017

Singapore to Deliver New Growth Map With Economy Under Strain by David Roman January 5, 2017

Best Economic Forecasters Lay Out 2017 Calls - Our most-accurate predictors of inflation, unemployment and growth explain their outlook for this year by Jeanna Smialek January 4, 2017

The 2017 Bond Strategy Backed By Goldman and BlackRock by Brian Chappatta  and John Gittelsohn January 4, 2017

Goldman Confronts Protesters Inside New York Headquarters by Dakin Campbell January 5, 2017

Harvard Academic Sees Debt Rout Worse Than 1994 ‘Bond Massacre’ by Anchalee Worrachate January 4, 2017

Joseph Stiglitz | The age of Donald Trump: On 20 January 2017, Donald Trump will be inaugurated as the 45th President of the United States. I would hate to say “I told you so,” but his election should not have come as a surprise. As I explained in my 2002 book Globalization and its Discontents, the policies we have used to manage globalization have sown the seeds of widespread disaffection....Of course, there is no going back. China and India are now integrated into the global economy, and technological innovation is reducing the number of manufacturing jobs worldwide. Trump cannot recreate the well-paying manufacturing jobs of past decades; he can only push for advanced manufacturing, which requires higher skill sets and employs fewer people.....Rising inequality, meanwhile, will continue to contribute to widespread despair, especially among the white voters in Middle America who handed Trump his victory. As the economists Anne Case and Angus Deaton showed in their study published in December 2015, life expectancy among middle-age white Americans is declining, as rates of suicides, drug use, and alcoholism increase. A year later, the National Center for Health Statistics reported that life expectancy for the country as a whole has declined for the first time in more than 20 years...In the first three years of the so-called recovery after the 2008 financial crisis, 91% of the gains went to the top 1% of earners......Obama brought “change you can believe in” on certain issues, such as climate policy; but with respect to the economy, he bolstered the status quo—the 30-year experiment with neoliberalism, which promised that the benefits of globalization and liberalization would “trickle down” to everyone. Instead, the benefits trickled up, partly owing to a political system that now seems to be based on the principle of “one dollar, one vote,” rather than “one person, one vote.”....

4 Jan 2017: China credit worries, HSR, China Railway to European cities, Trump picks import-curbing trade negotiator, will solar get cheaper than coal? Brent Crude $55.47

Can China Connect the World by High-Speed Rail? | Gerald Chan | TEDxKFAS

China’s Credit Engine Is Running Out of Gas by Bloomberg News January 4, 2017 -- President Xi Jinping and his top economic lieutenants last month pledged prudent and neutral monetary policy and proactive fiscal support for 2017 along with sharper focus on avoiding financial risks and asset bubbles. Meanwhile, the PBOC has been allowing a steady increase in money-market rates to squeeze leverage in the bond market, prompting firms to cancel or postpone bond selling of more than 100 billion yuan ($14 billion). ...

Stratfor - A Problem China Cannot Outgrow by Analysis DECEMBER 29, 2016 Beijing appears to be on the verge of making a difficult choice: Sacrifice growth (and by extension, political support) to tackle Chinese debt head-on, or risk suffering the same debt-driven banking crisis seen in so many countries.

'China freight train' in first trip to Barking 3 January 2017 -- China Railway already runs services between China and other European cities, including Madrid and Hamburg. The train will take about two weeks to cover the 12,000 mile journey and is carrying a cargo of clothes, bags and other household items. It has the advantage of being cheaper than air freight and faster than sea.

Donald Trump’s pick to be the nation’s chief trade negotiator Robert Lighthizer - a veteran lawyer who spent three decades fighting for punitive tariffs on U.S. companies’ overseas rivals

Ford Motor Co. is scrapping a plan to build a $1.6 billion small-car factory in Mexico after Donald Trump slammed the investment for more than a year, with company executives attributing the move to slumping demand for compact cars and optimism over the president-elect’s “pro-growth” strategies.

Solar Could Beat Coal to Become the Cheapest Power on Earth by Jessica Shankleman  and Chris Martin January 3, 2017 -- The average 1 megawatt-plus ground mounted solar system will cost 73 cents a watt by 2025 compared with $1.14 now, a 36 percent drop, said Jenny Chase, head of solar analysis for New Energy Finance. That’s in step with other forecasts.

21 Dec 2016:  OPEC, non-OPEC agree to trim almost 2 million b/d next year, Ringgit Dips to Weakest Since 1998 AFC, Equities Traders Happy as Fear Infects Bonds, Brent Crude $55.54

OPEC Deal Makes Oil Investors Most Bullish Since Slump Began by Mark Shenk December 19, 2016 -- Net-long position climbs to highest since July 2014: CFTC, OPEC, non-OPEC agree to trim almost 2 million b/d next year

Ringgit Dips to Weakest Level Since 1998 Asia Financial Crisis by Y-Sing Liau  and Netty Idayu Ismail December 19, 2016 -- Malaysia’s ringgit touched its lowest level since the Asian financial crisis in 1998, as investors continue to sell down emerging-market assets and after a crackdown on currency speculators last month exacerbated outflows.

Equities Traders Target a Happy New Year as Fear Infects Bonds by Garfield Clinton Reynolds December 20, 2016, VIX gauge for S&P 500 is dropping toward the lowest since 2014

Bond volatility elevated after worst rout since 1990s
The record-setting U.S. stock rally is wiping out almost any hint of fear for equity investors as this turmoil-filled year in global markets draws to a close. Bond and currency traders face a more complicated future.

A $33 Billion Manager Who Bought at Low Shifts to Cash by Tom Redmond December 18, 2016

Why You Might Want to Pass on the Shrimp Cocktail December 20, 2016 -- Bloomberg Businessweek's Megan Murphy reports on antiobiotic-tainted seafood from China. She speaks on "Bloomberg Markets."

China's Tiger Moms Are Spending Big on Tech Classes for Their Kids by Lulu Yilun Chen  December 20, 2016

2 Dec 2016: OPEC deal pushes up oil price, Trump trades created massive November for markets, China worries about yuan and cash outflow, China-Singapore angst, Brent crude $53.52 

OPEC Deal Hinged on 2 a.m. Phone Call and It Very Nearly Failed by Javier Blas  and Grant Smith December 1, 2016 — 7:01 PM EST -- Saudi call with Russia led to first supply cut since 2008. Deal finally gets struck after Indonesia is sidelined. After months of meetings from Doha to Moscow, it was a 2 a.m. phone call between two of the most powerful men in the global oil industry that finally broke the impasse.....

Brent Oil Jumps to Highest in More Than a Year After OPEC Accord by Mark Shenk November 30, 2016 — 6:28 PM EST December 1, 2016 — 3:49 PM EST xporter group agrees to reduce production in landmark deal.
Energy companies are biggest winners in European markets.

OPEC Confounds Skeptics, Agrees to First Oil Cuts in 8 Years by Nayla Razzouk , Angelina Rascouet , and Golnar Motevalli November 30, 2016 — 8:25 AM EST November 30, 2016 — 10:54 PM EST -- Broader than expected agreement to include non-OPEC countries. Benchmark Brent crude prices climb in London to top $50

Wall Street Wins Again as Trump Picks Bankers, Billionaires by Max Abelson November 30, 2016 -- Mnuchin would be third Goldman Treasury secretary since 1990s. ‘I think Donald Trump conned them,’ says hedge fund manager.

Dollar Slips With Asian Stocks as New Angst Unseats Trump Trades by Emma O'Brien  and En Han Choong December 1, 2016 — 5:55 PM EST December 1, 2016 — 7:55 PM EST

Why November Was a Massive Month for Markets Around the World - Last month changes everything by Sid Verma December 1, 2016 — 8:49 AM EST

China's Central Bank Is Facing a Major New Headache Bloomberg News December 1, 2016 — 11:01 AM EST December 1, 2016 — 7:12 PM EST Economist: It may take a while before the situation stabilizes. Central bank focus for yuan seen shifting as FX reserves bleed. People’s Bank of China Governor Zhou Xiaochuan already has one policy headache with the currency falling to near an eight-year low. He could have an even bigger one next month.

China-Singapore Tensions Spill Into Open After Customs Spat Bloomberg News November 30, 2016 — 4:00 PM EST December 1, 2016 — 4:26 AM EST -- Protest over military shipment from Taiwan seen as warning. Beijing concerned Singapore moving too far into U.S. orbit.

29 Sep 2016: OPEC agrees to freeze on Saudi u-turn but Russia output awaited, China property and GMO uncertainty, Deutsche Bank woes, Brent crude $48.78

In U-Turn, Saudis Choose Higher Prices Over Free Oil Markets by  Javier Blas  Grant Smith September 29, 2016

OPEC Agrees to First Oil Output Cut in Eight Years by  Grant Smith  Angelina Rascouet  Wael Mahdi September 29, 2016

Saudi Arabia unveils first public sector pay cuts 27 September 2016 -- A royal decree said ministers' salaries would be reduced by 20%, and housing and car allowances for members of the advisory Shura Council cut by 15%. Lower-ranking civil servants will see wage increases suspended, and overtime payments and annual leave capped. About two-thirds of working Saudis are employed in the public sector. Their salaries and allowances accounted for 45% of government spending in 2015.

China's Red-Hot Property Market Risks Missing Lessons From Japan's Crash by   Bloomberg News September 29, 2016

Why People Have Been Worrying About Deutsche Bank, in 12 Charts - The bank's troubles, in pictures. BY Sid Verma September 28, 2016

China Wants GMOs. The Chinese People Don't. SEP 27, 2016 -- On Wednesday, China's Ministry of Agriculture responded to a social media storm by suspending operations at the center.... That might take care of the current scandal, but the Chinese public's hostility toward GMOs won't go away so easily. Those concerns have only grown over the past decade as the government has increased its support of GMOs, including approval of the state-owned ChinaChem Group's $43 billion takeover offer for the Swiss seed giant Syngenta.... These efforts have galvanized a very public opposition that transcends China's typical political fault lines, and created one of the government's most intractable headaches....

19 Sep 2016: Middle East producers opened the taps, Brent Crude $46.27

Source: 5-year price chart

OPEC production rose last month as Middle East producers opened the taps, the IEA said. Saudi Arabia, Kuwait and the United Arab Emirates pumped at or near record levels and Iraq pushed output higher, according to the agency.

14 Sep 2016: Oil S&D is not going to balance in 2016 after all, exotic routes on the rise, Hanjin fallout, Brent Crude $47.36 

IEA Changes View on Oil Glut, Sees Surplus Enduring in 2017  Grant Smith  September 13, 2016 -- Faltering Asian demand has weighed on consumption this quarter. Market set for fourth year of surplus as Gulf OPEC pumps more....World oil stockpiles will continue to accumulate through 2017, a fourth consecutive year of oversupply, according to the IEA. Consumption growth sagged to a two-year low in the third quarter as demand faltered in China and India, while record output from OPEC’s Gulf members is compounding the glut, it said. Just last month the agency predicted the market would return to equilibrium this year......

The Crazy, Mixed-Up Global Oil Market - Algerian oil finds an unlikely home far away in Australia when cheap shipping redraws long established trade routes September 13, 2016

Hanjin Brings One of World's Busiest Shipping Terminals Close to Standstill   Heejin Kim  September 14, 2016

Hanjin Fall Is Lehman Moment for Shipping, Seaspan CEO Says  Rishaad Salamat  Kyunghee Park September 13, 2016

Fires, Floods, and Scorchers: Earth Destroys Yet Another Heat Record - July was the hottest on record, the 15th consecutive record-breaking month. August 18, 2016  Tom Randall

18 August 2016: Saudi Stabilization Talk, China fishery and Silk Road, Brent Crude $49.78 

Oil on Brink of Bull Market Amid Saudi Stabilization Talk: Chart  by  Ben Sharples August 18, 2016

Indonesia Palm Exports Seen at 3-Month High on China Demand by Yoga Rusmana, Eko Listiyorini  August 18, 2016 —  Shipments seen 6.7% higher in July as China, India buy more. Inventories fall 4.4%, while output rises 0.5%, survey shows. Palm oil shipments from Indonesia, the world’s largest grower, probably rose to the highest level in three months in July after buyers from China to India boosted purchases....

Rupiah’s Five Year of Losses Seen Ending by Top Forecaster  by  Lilian Karunungan  August 18, 2016

Singapore Non-oil domestic exports dropped 10.6 percent in July from a year earlier, worse than the median estimate of a 2.5 percent decline... That compares with a revised 2.4 percent decline in June...  the Monetary Authority of Singapore signaled it’s not ready for a second-round of easing after an unexpected move in April

Malaysia Plans Legal Moves Against Any 1MDB Defrauders, Low Says  by Pooi Koon Chong  August 18, 2016

Malaysia oil tanker 'not hijacked' despite earlier reports 17 August 2016

Cathay Says Premium Travel Slumping, Prompting Discounts  by  Kyunghee Park  August 18, 2016 -- The lack of first and business-class travelers from the Asian financial center -- the worst since the global financial crisis days of 2009 -- is such a dent on Cathay’s financials that analysts are asking whether Chief Executive Officer Ivan Chu needs to find a Plan B.

China's Empty Oceans - Aug 17, 2016 5:00 PM EST By Adam Minter -- On Wednesday, Indonesia celebrated its Independence Day with a bang -- blowing up several Chinese boats that had been caught fishing illegally in its waters and impounded. China doesn't dispute Indonesia's territorial claims, but Chinese fishermen have more pressing concerns. According to reports in Chinese state media this week, overfishing and pollution have so depleted China's own fishery resources that in some places -- including the East China Sea -- there are virtually "no fish" left. That's a frightening prospect for an increasingly hungry country: China accounted for 35 percent of the world's seafood consumption in 2015. Seeking catches further afield -- including in Indonesian waters -- isn't really a solution; fish stocks in the disputed South China Sea have themselves fallen by as much as 95 percent from 1950s levels. If China doesn't want the rest of Asia's fisheries to suffer the same fate as its own, it's going to have to think much more ambitiously about how to create a sustainable food supply for the region.

Xi Seeks to Address Concerns Over China’s New ‘Silk Road’ Plan by  Ting Shi   August 18, 2016

30 July 2016: Oil Giants worst profits trend, Singapore oil services badly hit, The Death of the Central Bank? IMF admits disastrous love affair with the euro, We need a rethink toward wealth by Stephen Hawking. Brent crude $43.53

Oil Giants Find There’s Nowhere to Hide From Doomsday Market by Joe Carroll July 29, 2016 -- Exxon posts worst profit in 17 years, missing estimates. Chevron’s third straight loss capped longest streak in decades. Exxon Mobil Corp. and Royal Dutch Shell Plc this week reported their lowest quarterly profits since 1999 and 2005, respectively. Chevron Corp.’s third straight loss marked the longest slump in 27 years, and BP Plc lodged its lowest refining margins in six years. Welcome to year two of a supply overhang so persistent it’s upsetting industry expectations that the market would return to a state of balance between production and demand. It’s left analysts befuddled and investors running to the doorways as the crude market threatened to tip into yet another bear market, dashing hopes that a slump that began in mid 2014 would show signs of abating.

Supercomputers Deliver $500 Million Savings in BHP Hunt for Oil by David Stringer July 29, 2016

Swiber Drops Liquidation Plans Following Talks With Creditor by Andrea Tan and Joyce Koh July 30, 2016  -- Swiber Holdings Ltd., the Singapore-based offshore oil and gas services group, said it is dropping liquidation plans and intends to restructure its business following talks with the company’s major financial creditor.

Morgan Stanley Warns Currency Traders Worst to Come for Dollar by  Rebecca Spalding July 30, 2016 —- The dollar is set to fall 5 percent in the next few months, the Federal Reserve isn’t raising interest rates anytime soon and U.S. economic data is only going to get worse.

The Death of the Central Bank By Michael Schuman JULY 29, 2016 -- For the past 70 years, Japan has been a crucible of experimentation in economic policy. During its go-go years, Tokyo’s unusual practices to spur rapid growth became a model for much of the rest of Asia, while its unconventional attempts to revive its post-bubble economy have helped economists understand what should and could be done to recover from financial crises.... Now Japan may be offering the world yet another lesson in economics -- on the outer limits and ultimate effectiveness of monetary policy itself.

IMF admits disastrous love affair with the euro and apologises for the immolation of Greece BY Ambrose Evans-Pritchard  29 JULY 2016 -- The International Monetary Fund’s top staff misled their own board, made a series of calamitous misjudgments in Greece, became euphoric cheerleaders for the euro project, ignored warning signs of impending crisis, and collectively failed to grasp an elemental concept of currency theory. ....It describes a “culture of complacency”, prone to “superficial and mechanistic” analysis, and traces a shocking breakdown in the governance of the IMF, leaving it unclear who is ultimately in charge of this extremely powerful organisation. The report by the IMF’s Independent Evaluation Office (IEO) goes above the head of the managing director, Christine Lagarde. It answers solely to the board of executive directors, and those from Asia and Latin America are clearly incensed at the way European Union insiders used the fund to rescue their own rich currency union and banking system....

US 2016 ELECTIONS - The TPP Isn't Just a Trade Deal JULY 29, 2016 By Noah Smith -- The Trans-Pacific Partnership, a multilateral trade deal involving the U.S. and many countries on the Pacific Rim, has become something of a bugaboo for those both on the left and the right. Republican nominee Donald Trump has denounced TPP, declaring it a sop to China, even though China isn't included in the agreement. Bernie Sanders is against it as well. President Barack Obama and Democratic vice presidential nominee Tim Kaine are for it, while Hillary Clinton, who helped negotiate the deal, has now turned against it. It’s not clear what Americans in general actually think about the treaty -- polls indicate lukewarm support, and Americans tend to view foreign trade as an opportunity rather than a threat. But it’s obvious that there are very vocal, committed minorities in both parties who are adamantly opposed to the deal, and both nominees appear to be giving them what they want. That’s odd, because the TPP is pretty innocuous and incremental stuff....  Instead, I see the TPP as a scapegoat for people who are -- justifiably -- angry about the China trade explosion that happened a decade ago. Killing TPP wouldn’t bring back any of the jobs that the U.S. lost in the 2000s, but it would be a stinging public rebuke to internationalists like Clinton and Obama -- a message that Americans are fed up with technocratic meddling done in the name of economic efficiency. That in and of itself isn't too worrying. Killing the TPP won’t do much economic harm. And with the countries showing little willingness to do big global trade deals, the free-trade agenda has mostly already ground to a halt all on its own. Also, I agree with the idea that technocrats have been too blasé about ignoring the distributional issues that arise from policies like free trade.

Our attitude towards wealth played a crucial role in Brexit. We need a rethink By Stephen Hawking -- Money was a key factor in the outcome of the EU referendum. We will now have to learn to collaborate and to share 29 July 2016 -- I don’t know what I would do with a racehorse, or indeed a Ferrari, even if I could afford one. So I have come to see money as a facilitator, as a means to an end – whether it is for ideas, or health, or security – but never as an end in itself.... Interestingly this attitude, for a long time seen as the predictable eccentricity of a Cambridge academic, is now more widely shared. People are starting to question the value of pure wealth. Is knowledge or experience more important than money? Can possessions stand in the way of fulfilment? Can we truly own anything, or are we just transient custodians?...

11 July 2016: Asian Shares Jump With Won After U.S. Payrolls Boost; Oil Falls, Brent Crude $46.33

Asian Shares Jump With Won After U.S. Payrolls Boost; Oil Falls by  James Regan  Emma O'Brien July 11, 2016 — Yen slips as Abe election win raises prospect of stimulus. Crude sinks toward $45 after more rigs activated in the U.S. Asian stocks jumped the most since March and South Korea’s won surged after a bigger-than-expected pickup in U.S. hiring damped concern the world’s biggest economy is losing momentum. Gold rose, while oil declined.

Transocean’s Junk Bond Sale Shows Investors Still Fear Energy by Claire Boston July 9, 2016 -- After a two-week drought, debt investors showed they’re willing to start lending to junk-rated borrowers again. But they’re still apprehensive when it comes to energy companies. That’s what happened this week when off-shore driller Transocean Ltd. came to the bond market with plans to raise $1.5 billion. The company ended up trimming the deal to $1.25 billion and had to boost yields to entice investors. Transocean was the first junk-rated company to sell bonds since just before June 23, when the U.K. voted to leave the European Union and issuance of speculative-grade debt in both the U.S. and Europe ground to a halt. And while a rebound in oil prices this year has boosted the value of bonds sold by riskier energy companies, parts of that industry still haven’t recovered, according to Jake Leiby an analyst at debt research firm CreditSights. “They’re in a tough industry,” Leiby said. “Off-shore drilling has been hit  the hardest of the energy subsectors in the downturn. It’s generally higher cost and longer cycle than other options.”

24 June 2016 (2.30pm Singapore time): Britain votes to exit EU, volatility hits, Brent crude $48.39

Editor's note: Talking to someone from financial sector, one of the reaction is "volality is good for trading." Bloomberg news links below. Despite the moans, financial sector might be quite pleased at the trading and business opportunities from the volatility and risk concerns. There have been analysis showing a big gap of  haves versus have-nots (similar to after the 1929 boom period) and also the middle-class squeeze. We see resilient regimes in Southeast Asia (including the special circumstances of the Singapore-Malaysia political-economies). They includes a major difference - recent decades of middle class expansion. But there has also been some (very) recent angst on migrant labour suppression on domestic wages and earnings.

Commodities Reel in World Market Tumult as U.K. Votes for Brexit

Oil Glut Is Fading Where You Would Least Expect: Saudi Arabia

Revealing the Biggest Winners and Losers From U.K. Vote to Leave - Former London Mayor Boris Johnson gets a boost, while big banks face a world of chaos

‘Panic Is Palpable’ as Markets Swoon on Brexit Vote Few Expected

U.K. Referendum Roils Global Currencies From Australia to Mexico

21 June 2016: Bloomberg - Oil halts advance, Brexit, trade war concerns, Brent crude $50.37

Oil Halts Advance Near $49 a Barrel Before U.S. Stockpile Data by Ben Sharples June 21, 2016

Crude Oil Declines in New York as Canadian Output Ramps Up by James Paton June 21, 2016

It’s 1995 Again for Dollar Traders Bracing for Trade War Trouble by  Taylor Hall  June 21, 2016 -- Clinton, Trump advocate tougher stance with major partners, JPMorgan says export-import disputes weaken the greenback

What Brexit Would Mean for Asia's Economies by  Colin Simpson June 21, 2016

Stocks Gain With Pound, Treasuries Drop as Brexit Concern Fades by  Lukanyo Mnyanda  Jeremy Herron June 20, 2016

16 June 2016: Commodity price rally 'still in early stages', says Hightower 

Commodity price rally 'still in early stages', says Hightower By - Published 14/06/2016. The commodities rally is still in its early stages, leading commentator David Hightower told the Agrimoney Investment Forum, flagging the growing demand for ags from emerging market countries. "We are much closer to the bottom for commodity prices than to a high," Mr Hightower, founder of the influential Chicago-based Hightower Report said. "If you think you have missed the commodities move – think again." He highlighted that even now - after commodities prices have risen by 12.3% this year, as measured by the Bcom index – they remain well below historic highs. The Bcom index, which closed on Monday at 88.3 points, approached 240 points in July 2008, at the peak of the last commodities boom. And analysis of supply and demand fundamentals offered reasons why the values of raw materials, including ags, may return closer to highs. 'Prices will need to go very high' "Commodity prices cannot be kept down, because costs of production are too close to where prices have been for the last six months to one year," Mr Hightower told the Agrimoney Investment Forum, in London. Markets had been "pricing for perfection" in output, leaving them vulnerable to a rally on any kind of production, or demand, surprise.".....

14 June 2016: Fossil fuels for electricity to peak on cheaper alternatives, Brexit angst, market rallies retreat, China financial worries speculation, Brent 49.86

Bloomberg news:

  • The World Nears Peak Fossil Fuels for Electricity - Coal and gas will begin their terminal decline in less than a decade, according to a new BNEF analysis.... Call it peak fossil fuels, a turnabout that's happening not because we're running out of coal and gas, but because we're finding cheaper alternatives. Demand is peaking ahead of schedule because electric cars and affordable battery storage for renewable power are arriving faster than expected, as are changes in China's energy mix. ..
  • Asian Stocks Battered by Brexit Angst as Pound Falls; Bonds Jump
  • So Long to Hong Kong's World-Beating Rally
  • ‘Smoldering Bonfire’ Shows Where Kyle Bass May Be Right on China - Kyle Bass, the U.S. investor known for betting against subprime mortgages, is among famous money managers who expect turmoil in a Chinese banking industry struggling with bad loans. It’s in the least-known corners of the financial system that their predictions could start to come true...“A small bank may face a liquidity problem if their investments are in default and that will trigger a domino effect,” said Patricia Cheng, a Hong Kong-based analyst at brokerage CLSA Ltd. “Any failure of a financial institution will hurt sentiment and the psychological effects just can’t be quantified.”....

30 May 2016: China Default Chain Reaction Threatens Products Worth 35% of GDP, Noble Group CEO Quits, Brent Crude 49.16 

Noble Group CEO Quits as Energy Solutions Business Put on Sale by Ranjeetha Pakiam  Jasmine Ng May 30, 2016

Noble Cuts to the Core By Christopher Langner, David Fickling May 30, 2016

China's Veiled Loans May Prove Lethal By Andy Mukherjee May 30, 2016

China Default Chain Reaction Threatens Products Worth 35% of GDP by  Bloomberg News  May 30, 2016... The risk of a default chain reaction is looming over the $3.6 trillion market for wealth management products in China.... WMPs, which traditionally funneled money from Chinese individuals into assets from corporate bonds to stocks and derivatives, are now increasingly investing in each other. Such holdings may have swelled to as much as 2.6 trillion yuan ($396 billion) last year, based on estimates from Autonomous Research this month.... The trend has China watchers worried. For starters, it means that bad investments by one WMP could infect others, causing a loss of confidence in products that play an important role in bank funding. It also suggests WMPs are struggling to find enough good assets to meet their return targets. In the event of widespread losses, cross-ownership will create more uncertainty over who’s vulnerable -- a key source of panic in 2008 when soured U.S. mortgage securities triggered a global financial crisis....

22 April 2016: Bloomberg - Commodities roaring back, Soros worries about China's debt-fueled growth, Brent Crude 44.95 

Commodities Make a Comeback as Bad Weather Meets Chinese Demand, April 22, 2016 - `The situation is better than people had given credit'. Strong China data and restocking season behind metals rally

The $2 Trillion Project to Get Saudi Arabia’s Economy Off Oil - Eight unprecedented hours with “Mr. Everything,” Prince Mohammed bin Salman.  April 21, 2016 by   Peter Waldman

Soros Says China's Debt-Fueled Growth Echoes U.S. in 2007-08  April 21, 2016

18 April 2016: Bloomberg - Oil Plunges After Output Talks Fail Amid Saudi Demands Over Iran, Brent Crude 40.87 -5.17%  8:30 PM

Oil Plunges After Output Talks Fail Amid Saudi Demands Over Iran Updated on April 18, 2016 — 7:05 AM SGT

Doha Failure Sees Loonie, Aussie Slide; Yen Near 1 1/2-Year High

Oil's Grand Bargain Falls Victim to Saudi Arabia's Iran Fixation

Emerging-Market Assets Roar Back to Life April 18, 2016 Short interest in largest stock, bond ETFs slumped to about 2%.  Morgan Stanley says growth pickup needed for rally to continue.

17 April 2016: Doha Oil Talks Start After DelayWall Street's Oil Crash, Bank Indonesia Adopts New Policy Rate, Tapping into the Ocean's Energy,  Brent Crude 43.10 

Doha Oil Talks Start After Delay to Address Saudi Stance on Iran

Wall Street's Oil Crash, a Story Told in Charts by Asjylyn Loder April 16, 2016

The Lessons of a Coal Giant's Collapse APRIL 15, 2016 By Editorial Board, The bankruptcy of Peabody Energy Corp., the largest U.S. coal producer, is the most vivid illustration yet of the market's deep and welcome shift away from coal. It could also be calamitous for the environment: If Peabody goes out of business, who will clean up the pollution it has left behind?

Bank Indonesia Adopts New Policy Rate to Help Boost Economy, April 15, 2016; Central bank moves to seven-day reverse repo rate from August. Bank Indonesia will reduce lending facility rate in August...

The bad smell hovering over the global economy by Larry Elliott; Attempts at economic stimulus have left a bad smell. Central banks are starting to think the unthinkable – helicopter money 17 April 2016

Tapping into the Ocean's Energy April 12, 2016, The oceans generate enough energy for us to give up coal and gas completely, but no one has been able to harness it effectively. The Triton is a wave harvester that uses a novel design which may be the key to unlocking the power of the ocean. (Source: Bloomberg)

Australia's Debt Levels Raise Downgrade Fears by Candice Zachariahs April 17, 2016

13 April 2016: A rapid slide in production around the world, risk of price drop if freeze deals fails, Brent Crude 44.21 Brent Crude 44.21 

The 10-Point. Gerard Baker  Editor in Chief  The Wall Street Journal, 13 April 2016  The debate among the biggest oil nations over whether to freeze output is beginning to be overtaken by a rapid slide in production around the world. The U.S. government said yesterday that national output dropped in March and will likely continue falling, and this morning OPEC said that production outside the cartel is falling more sharply than expected. Helped by speculation of a deal led by Russia and Saudi Arabia, the two biggest producers, at a meeting in Doha this weekend, oil prices recovered yesterday but they fell again this morning as profit-taking and pessimism over whether producers can agree to a freeze pulled the price down. Any deal could signal that the bottom of the oil-price rout has passed. Others in OPEC—including Venezuela, Iraq, Qatar, Kuwait and the U.A.E.—have said that they would likely go along with a Moscow-Riyadh-led agreement, but it remains unclear whether they would agree to a freeze if Iran, also an OPEC member, doesn’t participate.

Oil Producers Risk Severe Price Slump If Freeze Deal Fails by   Grant Smith April 12, 2016

Coal Slump Sends Mining Giant Peabody Energy Into Bankruptcy by Tiffany Kary and  Tim Loh April 13, 2016

World's Once-Biggest Gem Field Idle as $13 Billion Said Gone  by Godfrey Marawanyika April 13, 2016 

2 April 2016: Saudi Arabia says accord for production freeze needs Iran, glutted natural-gas summer could push producers into desperation, Tesla's new car  gets $7.5 billion orders at launch, Brent crude 38.67

Crude Oil Prices Sink as Saudis Balk at Production Curbs - Doubts about the deal; `Kiss goodbye' to any hopes of agreement in Doha: Commerzbank. Russia says it wasn't aware of Saudi position on Iran 

output had already halted an oil price rebound By TIMOTHY PUKO and  GEORGI KANTCHEV Updated April 1, 2016
Saudi Arabia Plans $2 Trillion Megafund for Post-Oil Era: Deputy Crown Prince; Pot would be big enough to buy world's four largest companies. First step will be sale of Aramco stake by 2018, prince says. ; Saudi Arabia is getting ready for the twilight of the oil age by creating the world’s largest sovereign wealth fund for the kingdom’s most prized assets.
No Mercy Rule for Glutted Natural-Gas Market - ‘Withdrawal season’ ends with record inventories, and summer could push producers into desperation By SPENCER JAKAB April 1, 2016
Obama Acknowledges Mixed Legacy on Nuclear Nonproliferation - Success of his efforts to reduce nuclear threats hinge on his ability to rein in North Korea and Iran By CAROL E. LEE April 1, 2016
12 Mar 2016:  Bonuses at many energy companies based on higher oil production, hina Is Facing a Ticking Demographic Time Bomb

China Is Facing a Ticking Demographic Time Bomb - Getting old isn't easy on an economy by Aki Ito March 10, 2016

Oil Freeze Thaws as Saudi Arabia Says Accord Hinges on Iran  by  Grant Smith

Economy Chugs On Despite Fears Slowdown worries fade as hiring, wage gains lift consumer spending; Fed still seen on hold By ANNA LOUIE SUSSMAN Updated April 1, 2016

A Ride in Tesla's $35,000 Model 3: Musk's Master Plan Realized  Dana Hull April 1, 2016; The Model 3 seats five and gets at least 215 miles per charge, a minimum Tesla hopes to exceed. It comes standard with autopilot hardware... 

5 year Bruent crude price chart:
Key Formula for Oil Executives’ Pay: Drill Baby Drill - Bonuses at many energy companies based on higher oil production, reserves; shareholders seek change By RYAN DEZEMBER,  NICOLE FRIEDMAN and  ERIN AILWORTH Updated March 11, 2016 Markets have been waiting for U.S. energy producers to slash output during a period of depressed crude prices. But these companies have been paying their top executives to keep the oil flowing....

Should I Buy Diamonds, Wine or Picasso? By Rani MollaAndrea Felsted';  You'd have thought negative interest rates would fuel a boom in diamonds, antiques and fine wine, as people look for an alternative to stuffing cash under the mattress. But you'd be wrong: prices for all three are falling.While some "collectibles" such as vintage watches, luxury handbags and old cars are holding up pretty well, others are struggling. The phenomenon of safe havens not always proving the best place to hide was explored by Gadfly colleague Nir Kaissar recently, who questioned gold, cash and real estate..... So while you may think your investments are uncorrelated, think again. As in other areas of economic life, China's influence is everywhere. If you're worried about its financial wellbeing, there might be some merit in that mattress after all.

Scenes From the Disaster Zone: Five Years on in Fukushima - Five years since the meltdown at the Fukushima Dai-Ichi nuclear power plant, progress has been made to rebuild much of the prefecture. Yet within evacuation zones designated by the Japanese government, scars are still obvious. Many evacuees who fled are unwilling to return. Thousands still live in temporary housing outside these zones.  Photographs by Ko Sasaki and Tomohiro Ohsumi for Bloomberg

10 Mar 2016: Emerging-Market Rallies Cling to Bullish Signs as Oil Stabilizes, Brent Crude 40.83 

Emerging-Market Rallies Cling to Bullish Signs as Oil Stabilizes

Surge in Hong Kong Stock Buybacks Is Bullish Signal to HSBC

29 Feb 2016: Bloomberg - Arab States Face $94 Billion Debt Crunch HSBC says, China Panic Calmed for Now, Leaders Face Reform Test, Malaysia Najib Cements Hold, Brent Crude $35

Arab States Face $94 Billion Debt Crunch on Oil Slump, HSBC Says

With China Panic Calmed for Now, Leaders Face Reform Test   Bloomberg News  February 29, 2016

Malaysia Ruling Party Suspends Deputy as Najib Cements Hold  by Manirajan Ramasamy  Pooi Koon Chong  February 28, 2016

23 Feb 2016: Bloomberg - The U.S. States Where Recession Is Already a Reality.  Economist - Manufacturing - A hard pounding. Singapore worries about debt defaults. Yuan carry trade unwind concerns. Brent Crude 34.69

The U.S. States Where Recession Is Already a Reality.  by Steve Matthews February 22, 2016; As economists size up the chances of the first nationwide slump since 2009, pockets of the country are already contracting. Four states—Alaska, North Dakota, West Virginia and Wyoming—are in a recession and three others are at risk of prolonged declines, according to indexes of state economic performance tracked by Moody’s Analytics....The regions suffering the most are in the flop stage of the energy industry’s boom-to-bust cycle, and manufacturing-dependent areas hurt by a rising dollar are at risk of receding. Whether the weak links break the entire U.S. economy will hinge largely on a group that’s benefited from the energy price collapse: American consumers.

“The impetus for weakening regional economies is the huge fall in energy prices and other commodities prices, which is taking a tremendous toll,” said Joseph LaVorgna, chief U.S. economist at Deutsche Bank Securities Inc. in New York, who is concerned of a broadening into a national recession. “If the consumer were to falter for any reason, that would be a big problem.”

Manufacturing - A hard pounding. A vital chunk of the world economy is beset by weakness Feb 20th 2016; Revenues in 2015 were nearly 15% lower than they were in 2014, and 29% below the 2012 peak.... The company’s woes are emblematic of the problems facing manufacturers worldwide. Although manufacturing is a much smaller part of most developed economies than services—just 12% of output in America, for example—its recent weakness makes many economists nervous about the wider outlook.... Recent data point to the size of the problem. Big jobs cuts have been announced this year by GE, Tata Steel and Bombardier. In December industrial production fell by 0.7% in Italy, 1.1% in Britain, 1.2% in Germany and 1.6% in France. In China both the official purchasing managers’ index (PMI) of manufacturing activity and that of Caixin, a leading financial magazine, are below 50, the threshold that indicates contraction....China’s demand for raw materials in the first decade of this century also prompted mining companies to step up production, and shipping companies to build more vessels. As Chinese demand has dropped, both industries have taken a pounding. Bloomberg’s commodity index has fallen by 28% over the past 12 months. The Baltic Dry index of shipping rates is down by 98% from its peak. The latest data show that Chinese imports, by value, have fallen by 18.8% over the past year...Before the financial crisis, global trade used to grow faster than GDP, now it is lagging behind. The OECD, a club of mostly rich countries, estimates that trade volumes last year grew by just 2%....The sluggish nature of trade growth has a disproportionate impact on manufacturing. Around 25% of all American manufacturing jobs are linked to trade, compared with just 6% of jobs in services...American capacity utilisation, a measure of how much productive capacity is not idle, may have peaked at a lower level than in previous cycles (see chart)....But currency movements cannot explain the weakness in European manufacturing; the trade-weighted euro has dropped by 11% over the past five years. The best hope for manufacturers is that this weakness is temporary.... 

Singapore Lawyers Warn of 1998-Like Pain as Debt Defaults Spread by David Yong  Andrea Ta  February 23, 2016; Rajah & Tann Singapore LLP, Southeast Asia’s largest law firm, reckons the region’s rising bond defaults will inflict as much pain on creditors as the financial crises of 2008 and 1998. As distress spreads from shipping to mining and retail to construction industries, the law firm said in an interview that recovery rates will be similar to those seen in the global credit meltdown and Asian financial crisis. Secured creditors recover only less than 33 cents on the dollar from insolvencies in East and South Asia, compared with more than 80 cents in the U.S., according to World Bank studies. Rival law firm Hogan Lovells US LLP said in an interview that regional banks will likely boost the sale of bad loans in the coming months. ...

DBS Profit Rises on Interest Income as Bad-Loan Ratio Holds by  Chanyaporn Chanjaroen  February 22, 2016

The World's Debt Is Alarmingly High. But Is It Contagious? Welcome back to a familiar anxiety: global debt contagion. by  Matthew Philips February 22, 2016

Brace for Yuan Horror Show By Christopher Langner Feb 23, 2016;...  With the yuan having reversed course from steady appreciation to rapid devaluation, companies such as developer Shimao are griping about rising interest costs and trying to replace foreign debt. Any such move will come too late to save investors from sharing the pain. There are more than 200 publicly traded Chinese companies which have issued bonds in either U.S. or Hong Kong dollars and publish financial reports in yuan. All added, they have more than $364 billion in syndicated loans and bonds in the two currencies.... Most of that isn't hedged, which until recently was the smart thing to do. For those with enough size to lure global banks and investors, it was a no-brainer to borrow in dollars (or in Hong Kong dollars, which amounts to the same given the currency's peg to the greenback). Rates were far lower -- at times less than a third of those at home -- and with the yuan appreciating the cost of paying interest progressively dropped.As a result, companies that borrowed overseas were able to book foreign-currency gains on their debt for several years. No longer...

Negative Rates Advocate Fujimaki Says BOJ's Kuroda Got It Wrong by  Chikako Mogi  Kazumi Miura  Yumi Ikeda  February 21, 2016

22 Feb 2016: Distress in India rural sector disrupts water to Delhi, army sent in on caste-based protests, Brent crude 33.45

Agony in Rural India Prompts Modi U-Turn on Policy He Mocked by Bibhudatta Pradhan February 22, 2016; Modi under pressure to boost spending in budget for rural jobs. Administration to increase spending on guaranteed job program.. During previous droughts, Harkiya relied on the world’s biggest public works program to earn cash doing menial tasks like digging ditches, building roads and planting trees. Yet this year, local officials say the central government isn’t providing enough money to fund work projects. Rising discontent in rural India is pressuring Prime Minister Narendra Modi to spend more on the $5 billion jobs program in his budget on Feb. 29. His party got crushed in India’s third most-populous state in November, and faces as many as nine state assembly elections in the coming fiscal year that will affect his economic agenda until the next national vote in 2019. Village Distress. Modi “neglected the countryside" with an emphasis on urban development in his first two years, said S. Mahendra Dev, director of the Indira Gandhi Institute of Development Research in Mumbai. “They should make bold moves in the budget focusing on rural India -- otherwise they will pay a heavy political price........ India’s villages, home to about 70 percent of the nation’s 1.3 billion people, aren’t feeling its world-beating 7.3 percent economic expansion. Rural wage growth is falling, food exports are down and production of mass-market goods has dropped.... In times of distress, farmers don’t have many places to turn. While subsidized food ensures nobody starves to death, other forms of welfare are lacking: Health care is spotty, crop insurance is inadequate and emergency relief can take months to arrive...... "

Protesters Disrupt Water Supplies to India's Capital by Archana Chaudhary February 22, 2016; Unrest in Haryana state blocked about half of Delhi's supply. More than half the water supply to 18 million people in India’s capital is being disrupted after deadly unrest in a neighboring state...

India Sends Army to Quell Caste-Stoked Protests Near Delhi  by Natalie Obiko Pearson February 21, 2016; Maruti Suzuki forced to halt production at two plants. Capital set to lose water supply as protesters block canal. India sent troops to a northern state where protests for caste rights turned violent as mobs torched vehicles, shut off a canal supplying water to the capital, and forced the nation’s biggest automaker to halt production. Protests entered their third day in Haryana state bordering the capital of New Delhi, where more than 3,000 troops have been deployed to impose order, according to army headquarters. Including paramilitary officers and police, the total number of security personnel in the state rose to 5,000, the Press Trust of India reported, citing an official it didn’t identify. The demonstrations are being led by members of the Jat community, who are demanding benefits such as government jobs and college admission under India’s affirmative action policy. Giving in to their demands could embolden other groups, including the Patels who took to the streets in Prime Minister Narendra Modi’s home state in August in a similar explosion of caste-based violence...

20 Feb 2016: Top Oil States to Complete Output Talks by March 1, Russia Says, Brent Crude 33.01

Top Oil States to Complete Output Talks by March 1, Russia Says by   Elena Mazneva February 20, 2016; Talks possible with more non-OPEC states, Energy Minister says. Iran hasn't commented on freezing production at January levels.

Norway government may need to withdraw almost $10 billion from its $810 billion wealth fund this year

The Stressed-Out Oil Industry Faces an Existential Crisis by Dan Murtaugh February 19, 2016

Exxon Fails to Replace Production for First Time in 22 Years by Joe Carroll February 20, 2016

China Removes Xiao as CSRC Head After Stock Market Meltdown   Bloomberg News February 19, 2016

The Trouble With Banks Is Contained, for Now Feb 17, 2016 Mohamed El-Erian Chief Economic Advisor, Allianz

13 Feb 2016: Vitol - Prices will stay low for up to a decade, Negative Rates Backfire, bank CoCo bonds problem, art market trouble?  Brent Crude 32.83 

The Oil Industry Got Together and Agreed Things May Never Get Better - Thousands of industry participants gathered in London for their annual get-together, only to find a world awash in crude and hardly a life jacket in sight.... Producers are bracing for a tough year. Prices will stay low for up to a decade as Chinese economic growth slows and the U.S. shale industry acts as a cap on any rally, according to Ian Taylor, chief executive officer of Vitol Group, the world’s largest independent oil trader. Even refiners, whose profits have held up better than expected, are seeing a worsening outlook....

World Trade at Sea Has Hangover From Party That Never Happened by Alex Longley February 12, 2016; Growth in container trade was half what was expected last year...

Racked Markets Hand Verdict to Central Banks on Sub-Zero Rates; More than $8 trillion erased from global equities this year. Negative rates hurt banks as unconventional policies backfire... 

Asia's Rich Advised to Buy Yen as BOJ's Negative Rates Backfire by  Netty Idayu Ismail February 12, 2016

The Trouble With CoCos 10 FEB 12, 2016 By Editorial Board; Until recently, many financial regulators thought a new financial instrument -- known as a contingent convertible bond -- had a big part to play in ensuring the soundness of the financial system. After the past few days, they might want to think again. CoCo bonds have been central to European regulators’ efforts to avoid a repeat of the 2008 crisis. They’re supposed to boost a bank’s capacity to absorb losses...

Flashy Malaysia Financier Said to Sell Picasso, Basquiat at Loss by  Katya Kazakina February 12, 2016

Is The Top of the Art Market In Trouble? A look at the top 10 sales of London's February auctions by James Tarmy February 12, 2016


10 Feb 2016: IEA Raises Estimate of Surplus Oil, Indonesia stimulus, Russia funding gap, milk price slump, Brent Crude 30.79 

IEA Raises Estimate of Surplus Oil Supply on Higher OPEC Output by   Grant Smith  February 9, 2016

Goldman Sees Risk of Oil Below $20 by  Grant Smith  Jonathan Ferro February 9, 2016

Here's What Bank Executives Are Saying About Energy Markets Laura J Keller February 10, 2016

Won After the Crisis Is Buying Again by Tom Redmond February 9, 2016 Global equities erased $7.7 trillion in value this year through Monday as routs in commodities and Shanghai shares spread, taking global banks as the latest victim. Worldwide stocks neared a bear market on Tuesday as the yen surged and corporate bond risk jumped.

Indonesian Growth Beats Estimates as Widodo Lifts Spending  Chris Brummitt   Rieka Rahadiana  Herdaru Purnomo February 5, 2016

Putin to Weigh $10.4 Billion Anti-Crisis Plan With Funding Gap by Olga Tanas  Andrey Biryukov  February 10, 2016  Government has to find funding for 134 billion rubles in plan. Russia will tap sovereign wealth fund for anti-crisis measures.

Starbucks Stands to Benefit From Plunging Milk Prices: Chart  Leslie Patton  January 20, 2016

NZ Farmers Under Pressure as Milk Powder Slumps to Six-Month Low  Tracy Withers  February 3, 2016; Whole milk powder fell to $1,952 a metric ton at the GlobalDairyTrade auction Tuesday, the lowest since Aug. 18..... Powder prices have dropped 31 percent since October, putting pressure on Fonterra Cooperative Group Ltd.’s payout to its New Zealand farmers and damping the outlook for economic growth.....

4 Feb 2016: Oil prices and markets rally, Brent Crude 35.44

Miners Go Gangbusters as Metals Rally, Dollar Drop Spark Rebound by Danielle Bochove February 4, 2016

Macquarie Cuts Profit Forecast for Its Commodities Business by Narayanan Somasundaram February 4, 2016

Risk of US recession back on the agenda for markets by John Authers February 3, 2016

3 Feb 2016: Stocks Fall as Sliding Oil Prices Hit Energy Shares, ChemChina-Syngenta deal, China's rising junk debt, commodity trader woes, Brent Crude 32.72

Stocks Fall as Sliding Oil Prices Hit Energy Shares - Investors bid up havens from government debt to utilities By DAN STRUMPF Updated Feb. 2, 2016;...The declines came on the heels of a second consecutive day of lower oil prices as traders continued erasing a recent surge from speculation that the world’s major exporters would cooperate on output cuts. New York-traded crude oil fell 5.5% to $29.88 a barrel, taking its two-day loss to 11%. A steep drop in quarterly profit from both Exxon Mobil and BP showed that even the sector’s most resilient firms are struggling in an environment of sharply lower oil prices.... Adding to the pain for the energy sector was a wave of credit downgrades by ratings firm Standard & Poor’s, which said the steep fall in oil prices could curtail energy companies’ outlook for years.....

ExxonMobil sees 2015 earnings fall 50%, cuts 2016 spending by 25%; ExxonMobil Corp. plans to reduce its capital and exploration expenditures in 2016 by 25% compared with that of 2015 to $23.2 billion.  The company estimates earnings in 2015 totaled $16.2 billion, a 50% drop from the $32.5 billion earned in 2014. Capital and exploration expenditures were $31.1 billion, down 19% from the 2014 level.....

It's the 1980s Again, Thanks to the Oil Glut - The reaction in the U.S. to lower energy prices has been strikingly similar this time around.

ChemChina Nears Deal to Buy Controlling Stake in Syngenta - Deal could represent the largest foreign acquisition by a Chinese company By RICK CAREW,  SHAYNDI RAICE and  EYK HENNING Feb. 2, 2016  China National Chemical Corp. is nearing a deal to buy a controlling stake in Syngenta AG that values the Swiss pesticide company at about $43 billion, according to people familiar with the matter....

China’s 1.4 Billion Mouths Behind ChemChina’s Syngenta Pursuit by Anuradha Raghu  Aya Takada February 3, 2016

China Has $23 Billion in Debt That Could Be Cut to Junk

Oil Industry's Plan to Keep Investors Happy: Borrow More Money

Oil Could Prices Jump 50% by the End of 2016

Russian Roulette for Oil Traders By Liam Denning Feb 2, 2016 10:29 PM MPSTWhen you've reached the point of putting your faith in Russia to bail you out, you've almost capitulated. Almost....

Cheap Oil Won't Save Airlines By Chris Bryant Feb 1, 2016

Bank Bear Market Gets Worse as Goldman, Citi Sell Off Again by Anna-Louise Jackson  Dakin Campbell February 3, 2016

Rio Tinto Drops to Lowest Since March '09 as Mining Rout Deepens by Agnieszka De Sousa February 3, 2016

A (Not So) Noble Pursuit By Christopher Langner Feb 1, 2016; ....The commodities trader is seeing its margins shrink as the prices of the products it sells drop. ....The Hong Kong-headquartered group moved 205.8 million tons of various commodities and earned revenue of $53.7 billion in the nine months ended Sept. 30, its third-quarter report shows. That's an almost 44 percent increase in volumes and a 17 percent decrease in the amount of money its sales generated. In the same period, Noble generated operating income of $3.74 per ton, less than half what it did a year earlier.... Considering Noble’s credit-default swaps are the most expensive in Asia, it's fair to assume that borrowing money will get more expensive for the company, and that could eat further into margins. Then there are the perils of being a middleman when the market is in free-fall. Buyers have more bargaining power and sellers can’t squeeze much further without going bust. And when Noble's suppliers go bankrupt, that equates to a loss, since these companies would probably default on their delivery contracts.....To be fair, Noble Group isn't alone in its malaise. Trafigura Beheer said in December that its trading volumes had increased 17 percent for the year ended Sept. 30 while its revenues dropped 23 percent. It led Chief Executive Officer Jeremy Weir to warn in his letter to shareholders in Trafigura’s annual report that: ``Commodities trading will in future be a business for large firms with diversified and well-financed trading interests or for small specialists. It will certainly not be a hospitable environment for mid-sized, under-capitalised or unfocused players.''....

Goldman Sachs Says It May Be Forced to Fundamentally Question How Capitalism Is Working - The profit margins debate could lead to an unsettling conclusion. by Joe Weisenthal February 3, 2016; .... Goldman writes: "We are always wary of guiding for mean reversion. But, if we are wrong and high margins manage to endure for the next few years (particularly when global demand growth is below trend), there are broader questions to be asked about the efficacy of capitalism." In other words, profit margins should naturally mean-revert and oscillate. The existence of fat margins should encourage new competitors and pricing cycles that cause those margins to erode while conversely, at the bottom of the cycle, low margins should lead to weaker players exiting the business and giving stronger companies more breathing space. If that cycle doesn't continue, then something strange is taking place....

Banker's Accounts Said to Be Frozen in Singapore 1MDB Probe by  Andrea Tan February 2, 2016

Mahathir's Son Ousted as Malaysia Premier Tightens Grip on Power by  Pooi Koon Chong  Manirajan Ramasamy February 3, 2016

2 Feb 2016: Bloomberg - Japan Trading Houses Facing $13 Billion Hit on Commodity Misfire, Brent Crude 34.04

Japan Trading Houses Facing $13 Billion Hit on Commodity Misfire By Masumi Suga  Stephen Stapczynski Ichiro Suzuki February 2, 2016; Companies esteemed for creating `shosha man' plan writedowns. As raw-material prices fall, focus shifts to other businesses

Hong Kong Property Slump Worries Investors by Frederik Balfour February 2, 2016

Singapore Seizes `Large Number' of Bank Accounts Amid 1MDB Probe by   Jasmine Ng  February 1, 2016

1 Feb 2016: Lower-for-longer view for oil, HK retailers for Chinese New Year, Swiss Probe of Malaysia Fund Sees $4 Billion Possible Misuse, AUD plunge 'blessing', Brent Crude 35.30 

Editor's note: End of last and this week various industry friend meet-ups in run up into Lunar New Year long weekend upcoming. Rather downbeat mood.

Lower-for-Longer View for Oil Means More Deals on the Way by  Rakteem Katakey February 1, 2016 — 8:01 AM SGT. Value of M&A shrank by 17% to $380 billion last year, EY says. Consolidation to be driven by overcapacity, margin pressures

Hong Kong Retailers Fear for Chinese New Year February 1, 2016  Chinese New Year (CNY) isn’t expected to be the seasonal boon for H.K. retailers that it has been in recent years due to yuan depreciation, market volatility and decline in same-day visitors from the mainland. Bloomberg's Catherine Larkin has more on "First Up." (Source: Bloomberg)

Swiss Probe of Malaysia Fund Sees $4 Billion Possible Misuse by  Shamim Adam January 30, 2016

Aussie's Plunge to Seven-Year Low Is Turning Out to Be a Blessing by Candice Zachariahs February 1, 2016

30 Jan 2016: Corporate debt hangover, China steel production's first drop since 1982, Swiss probe of Malaysia fund, Brent Crude 35.99

China Steel Production Has First Annual Drop Since 1981: Chart   Feiwen Rong  January 29, 2016

The $29 Trillion Corporate Debt Hangover That Could Spark a Recession   Sally Bakewell  January 28, 2016; Leverage at companies worldwide swells to highest in 12 years. Capital not working hard enough at third of all firms

Swiss Probe of Malaysia Fund Sees $4 Billion Possible Misuse  Shamim Adam January 30, 2016; The Swiss Attorney-General’s office said in a statement Friday that during an investigation of 1Malaysia Development Bhd., four cases involving allegations of criminal conduct and occurring between 2009 and 2013 have so far come to light. It has been ascertained a small amount of funds were transferred to Swiss accounts of former Malaysian public officials, according to the statement. 

The Swiss authority is seeking help from the Malaysian attorney general to determine whether funds were misappropriated. 

29 Jan 2016: Bloomberg - Russia and Goldman Sachs on oil, Japan negative interest rates, Brent Crude 34.26

Decision On Oil Cut Only Possible If All Exporters Agree, Russian Energy Minister Says January 29, 2016

Why Goldman Sachs Says $30 Oil Isn't Proof of Weak Demand by  Grant Smith  January 28, 2016, Brent spreads signal that demand isn't driving the rout. Prices low enough to cause `fundamental change' in supply. Oil’s collapse to $27 a barrel last week spurred concern that, on top of the existing oversupply, the market is facing a demand crisis. Goldman Sachs Group Inc. thinks that’s wrong.

PetroChina Expects 2015 Profit to Fall as Much as 70% on Oil Slump by   Bloomberg News
Bank of Japan's Negative Interest Rate Decision Explained by   James Mayger January 29, 2016
Stocks Rally With Bonds as BOJ Ends Grim January on High Note by  Emma O'Brien  Stephen Kirkland

26 Jan 2016: Oil - stocks correlation reflects fear of global recession, crude has been tracking an infamous subprime mortgage index, problems in retail, Brent crude 30.07 

Oil, Stocks at Tightest Correlation in 26 Years - The link reflects a common theme—a fear of a global recession By TOMMY STUBBINGTON and  GEORGI KANTCHEV Jan. 25, 2016

So Yes, the Oil Crash Looks a Lot Like Subprime - The price of crude has been tracking an infamous subprime mortgage index. by Tracy Alloway

January 25, 2016 

Why the Fed Is the Root of Much Market Turmoil - Fed is a key reason markets have plunged and risk of recession rising By GREG IP Jan. 25, 2016


Mom-and-pop stores have steadily disappeared across America in the past three decades, but there was at least a Wal-Mart left behind to replace them after the mega chain finished putting them out of business. Now the Wal-Marts are disappearing too, leaving hundreds of communities without grocery stores and pharmacies and thousands of jobs....

LBOs. How Bad Is Retail? Look at the Bonds - Prices of retailers’ bonds tumble as investors see few options for private-equity owners to cash out By MATT JARZEMSKY Jan. 25, 2016; Bonds of major retailers that went through leveraged buyouts have fallen to distressed levels...

23 Jan 2016: Global Stocks Surge Most Since 2012 on Stimulus Bets, Oil Rally , Nouriel Roubini: Global Economy Not Back to 2008, Brent Crude 32.18 +10%  

Nouriel Roubini: Global Economy Not Back to 2008 January 22, 2016; Nouriel Roubini, NYU professor and chairman at Roubini Global Economics, explains why the global economy isn’t facing the same conditions as 2008, and discusses expectations for the Federal Reserve's rate hike path and how QE is working in Europe. He speaks from the World Economic Forum in Davos, Switzerland on "Bloomberg Surveillance." (Source: Bloomberg)...

Global Stocks Surge Most Since 2012 on Stimulus Bets, Oil Rally by Jeremy Herron  Anna-Louise Jackson January 22, 2016; ....Global stocks surged the most in 3 1/2 years, as U.S. equities joined a rally that pushed oil to its best two days since 2009 on speculation that central banks will expand stimulus measures to counter turmoil in financial markets. Haven assets from Treasuries to gold retreated.....

China's Rich Stock Valuations Fuel Overseas Bargain Hunt: Chart by Jonathan Browning January 22, 2016

China's Acquisition Spree Won't End Well 15 JAN 21, 2016 By Michael Schuman; ... China is on a shopping spree. On Jan. 12, Chinese property developer Dalian Wanda bought control of Hollywood film producer Legendary Entertainment for $3.5 billion. Just three days later, the appliance giant Haier acquired General Electric's white goods business for $5.4 billion.... The deals are just drops in a gushing torrent of Chinese overseas spending. Foreign direct investment from China reached $111 billion in 2015, by one estimate -- 10 times more than a decade earlier.

22 Jan 2016: Talk of oil rebound pushing to short covering, Soros view on China, China talks to soothe market, EMM outflows and China OFDI frenzy, Brent crude 29.61

Editor's notes: 
  • Was just chatting with veteran Southeast Asia regional economist over breakfast yesterday and marvelling at the dismal news flow and the importance of business media in swinging moods! Question: Isn't it broadly good that prices are down for most people (barring those in over-capacity sectors shedding jobs?). 
  • Also chatted with one of the smartest business investors I know. Mulling the question of overcapacities. Also on prevalence of problem of emerging / frontier market investments having lower return than those in developed markets. And the news of capital outflow form EMM. The FDI boom reconsidered on returns problems? And look at the China OFDI push!
  • Source: Major loss of capital for emerging markets - Net outflows last year amounted to $1 trillion, with China making up bulk of it by Aaron Low 21 Jan 2016,
  • Some market volatility mediation measures coming back in again? I've liked El-Erian commentary for a long time, so here's his comment below (LinkedIn screenshot).

George Soros Says He Expects Hard Landing for China Economy by Katherine Burton January 22, 2016

Chinese Firms Are Deep in an Overseas Shopping Frenzy by  Fox Hu  Jonathan Browning January 22, 2016 — 12:00 AM SGT Updated on January 22, 2016. Listed companies announce $8.6 billion acquisitions this month. Outbound deal flow on track to overtake last year's record....Pricey stocks leave ample room for Chinese companies to boost returns by buying more profitable assets overseas for less. With domestic firms valued at more than three times the level in the U.S., what was previously a select group of China’s outbound acquirers is set to widen, helping the nation continue its record dealmaking run. “They’re trading at high multiples but often have lower earnings, and it’s about time that they take advantage of elevated valuations to buy something sizeable and something concrete,” said Samson Lo, head of Asia mergers and acquisitions at UBS Group AG. “In a sense, these companies are acting like financial investors.”....

China Vice President Vows to ‘Look After’ Stock Market Investors by John Micklethwait  John Fraher, January 21, 2016

China Has No Intention to Devalue Yuan, Vice President Li Says by John Micklethwait  Enda Curran  January 21, 2016

Asian Stocks Bounce as Stimulus Talk Boosts Japan; Oil Nears $30 by Emma O'Brien  Jonathan Burgos,

21 Jan 2016: Entering margin call territory? Low shipping rates. Davos elites worry about oil and focus on cost cut push, Pope ticks off rich club, will US shale wipeout on $30 oil, Commodities Crash Boosts China's New Silk Road, Barclays cut IBank jobs with worst cuts in Asia, Brent crude 27.88

Editor's note: El Erian writes: "US Stock Market Update:  Along with today 3% drop so far, markets are starting to see cascading technical dislocations that typically accelerate disorderly de-leveraging." And he mentions the C word - contagion. More news on job rationalisation even at J&J. My business media friends in this part of the world tell me they also had job cuts (preparing for 2 years of lean). Notable in Davos linked news is that the 1% now have more than the 99%. Thus, I'm happy to read this note on the question balancing fairness and efficiency - the writer reckons that the "efficiency" narrative is a hegemonic message....  

  • Balancing Fairness and Efficiency By Noah Smith 31 JAN 11, 2016; One common criticism of economics is that it focuses too much on efficiency, and not enough on things like equality, fairness and the welfare of future generations. In the extreme version of the criticism, the focus on efficiency is a deliberate plot to keep resources in the hands of the wealthy....

DoubleLine's Gundlach: Stock, credit declines suggest margin calls NEW YORK | BY JENNIFER ABLAN Jan 20, 2016

Fannie Mae Shares Are Now Worth $1: Chart by  Katherine Chiglinsky January 20, 2016

Shipping Rates So Low That Renting a Ferrari Costs More by  Alex Longley January 20, 2016

In Private Davos Meeting, Oil Chiefs Push Plan to Reduce Costs by  Javier Blas January 20, 2016

Oil's Nightmare Scenario Dominates Davos by Javier Blas and  Grant Smith January 20, 2016

Oil below $30 fans wipeout fears among U.S. shale survival artists YORKTOWN, TEXAS | BY TERRY WADE AND ANNA DRIVER

Pope tells Davos elite: Consider your role in creating poverty Jan 20, 2016

'Middle-class Joe' Biden tells Davos bosses to look after workers Jan 20, 2016

Commodities Crash Boosts China's New Silk Road by Ting Shi January 21, 2016; ... lump could prove a blessing for President Xi Jinping’s signature initiative to build an intercontinental web of infrastructure and trade links with China at the center.... The New Silk Road program announced by Xi more than two years ago is finally gathering steam just as the prices of oil, steel, concrete and other building materials sink. That’s making it easier for China to sell its ambitious vision to build roads, railways, pipelines and ports from Xian to Athens, diversifying the country’s trade options and exporting the excess industrial capacity that’s dragging down its own economy... The so-called Silk Road Economic Belt and 21st-Century Maritime Silk Road -- or "One Belt, One Road," for short -- sits at the center of Xi’s effort to bolster geo-economic clout across more than 70 countries in Asia, Europe and Africa. With many nations along the route dependent on commodities exports, the prices slump could make them more willing to accept Beijing’s investment pitch and a share of its $40 billion Silk Road infrastructure fund....

Barclays to Cut Investment Bank Jobs in New York, London by Ambereen Choudhury and Stephen Morris January 21, 2016 ...  (cuts) most deeply in Asia, according to a person with knowledge of the matter...

US - How Bad Are the Job Cuts? By Rani Molla Jan 21, 2016 ... With Johnson & Johnson announcing 3,000 job cuts on Tuesday and Macy's announcing the same number of cuts earlier this month, 2016 is off to a dismal start for some U.S. workers. But how bad is it? Certainly it's no 2009 yet, when companies announced more than 900,000 job cuts, according to Bloomberg data for public and private North American companies. Last year, nearly 300,000 jobs were cut. ..

20 Jan 2015: IEA sees risk of 1.5 million barrel glut, Davos elites not worrying about economic risks? Eye on Yuan. Brent crude 28.76

IEA Sees Risk of World Drowning in Oil by Grant Smith January 19, 2016; ...The IEA trimmed 2016 estimates for global oil demand as China’s economic expansion weakens and raised forecasts for supplies outside the Organization of Petroleum Exporting Countries. While non-OPEC supply is set to drop 600,000 barrels a day in 2016, Iran’s comeback could fill that gap by the middle of the year. As a result, world markets may be left with a surplus of 1.5 million barrels a day in the first half....

IMF Global Forecast 'Largely Nonsensical': Paul Donovan UBS

Dollar's advance stalls as crude wobbles, sterling near seven-year low TOKYO | BY SHINICHI SAOSHIRO Jan 19, 2016

Davos Gets Jittery as Trump Rises, Oil Falls and China Slows by Simon Kennedy and Matthew Campbell January 20, 2016

The Charts That Tell You Everything About Davos - Risks, robots, rock stars, and the global elite. by Jennifer Ryan January 20, 2016 

Aberdeen Is Loading Up on Stocks And Wants More If Rout Deepens by Roxana Zega January 20, 2016; .. While Aberdeen has suffered withdrawals and its own shares have slumped 55 percent since April, the company isn’t the only one betting on a recovery in emerging markets.... After plunging to an almost seven-year low, stocks in the MSCI Emerging Markets Index are 29 percent cheaper than those in advanced nations...

Hedge Fund That Called Subprime Crisis Says Yuan Should Fall 50% by Saijel Kishan  January 20, 2016

Strong El Nino Seen Sticking Around as Cyclones Delay Demise by Phoebe Sedgman January 19, 2016; ... Recent tropical cyclone activity in the Pacific Ocean has produced strong westerly winds along the equator, which may temporarily slow El Nino’s decline, Australia’s Bureau of Meteorology said Tuesday on its website...

18 Jan 2015: Bloomberg - Brent dips below $28 on Iran, miners routed, emerging market rout indicators but China bracing for worse (on market overvaluation?), listening to El-Erian on oil

Editor's note: I was just watching this - El-Erian: 'Massive' Supply Disruption to Lift Oil Prices January 16, 2016; where he says oil below $30 is not fundamental, unless there has been market change e.g. loss of swing producer, which market needs to adjust to.

Brent Drops Below $28 as Iran Sanctions Lift Set to Worsen Glut by Anthony Dipaola and Ben Sharples  BenSharps anuary 18, 2016

Oil Speculators Raise Bets on Falling Prices to All-Time High by Mark Shenk January 18, 2016

Miners Routed as Crude Oil Tumbles, Goldman Predicts More Losses by David Stringer January 18, 2016

Five Charts Show How Bad the Emerging-Market Stock Rout Really Is by  Phil Kuntz  January 18, 2016 — 2:14 AM SGT. Developing-nation stocks have lost 12 percent in three weeks. Middle East and Latin American markets are at oversold levels.

China's Stock Strategists Are Bracing for a Deeper Bear Market by  Bloomberg News  January 18, 2016

17 Jan 2015: Iran to boost  oil exports, Wal-Mart trims stores and affecting 16,000 jobs, Brent Crude 28.94

Iran Kicks Off Plan to Boost Oil Exports as Sanctions Lifted by  Anthony Dipaola and Hashem Kalantari January 17, 2016; Country seeking immediate increase of 500,000 barrels a day. Greater Iran sales to pressure prices amid oil glut: Mills.

The Simple Truth About China’s Market - It’s not just clumsy trading rules that have made the mainland’s stocks so risky. By  Zeke Faux January 15, 2016

Wal-Mart Makes Rare Retreat on Home Turf - Closing of 269 stores includes all 102 U.S. Walmart Express stores, affects 16,000 jobs By SARAH NASSAUER and  KATE DAVIDSON Updated Jan. 15, 2016 7:22 p.m. ET; Wal-Mart is closing more than 150 stores in the U.S., a rare retreat for the behemoth on its home turf, capping what has been a difficult year for retailers as shoppers slowed their spending pace and accelerated their shift to the Internet. Economic data released on Friday showed the U.S. economy entered 2016 with little momentum from one of its key sectors. U.S. retail sales fell 0.1% in December, and were up just 2.1% for all of 2015, compared with a 3.9% annual gain the previous year, the Commerce Department said on...

Bloomberg: The company plans to close 269 stores, including its experimental small-format Express outlets, in a push to streamline the chain. More than 16,000 jobs will be affected. The numbers sound ominously large, but the plan will affect less than 1 percent of the company’s total square footage and revenue. Investors don’t seem to think the cuts are enough; shares fell 1.8 percent after the announcement.... Wal-Mart to Shut Hundreds of Stores by Shannon Pettypiece January 15, 2016; .... The move by the largest private employer in the U.S. will affect about 10,000 jobs domestically at 154 locations, according to a statement Friday. Overseas, the effort will eliminate 6,000 jobs and includes the closing of 60 money-losing stores in Brazil, a country where Wal-Mart has struggled.....

15 Jan 2015: Renewables investment still at record, Bank of Indonesia cuts rates to prioritise growth, Jakarta attack brings IS to Southeast Asia

Solar and Wind Just Did the Unthinkable - Cheap oil and gas couldn't stop another record year for renewables, or a turning point for energy investment. by Tom Randall January 14, 2016

Bank of Indonesia Cuts Rates to 7.25% by  Chris Brummitt and  Rieka Rahadiana January 14, 2016

Indonesia Attack Brings Islamic State to Southeast Asia's Door by  Chris Brummitt January 15, 2016; Gun and suicide bomb assault follows months of warnings. Police say attack planned by Indonesian in IS stronghold Raqqa.

14 Jan 2015: Bloomberg news scan - For Real Oil Prices, the Crash Is Even Bigger, China yuan drop but lots of stocks oversold, Brent Crude 29.94  9:15PM EST

Editor's note: This morning, Brent dipped below $30! Looking at the start of this posting on oil price (and macro), I've been tracking the news since the slide from $85. Looking back, I recall being particularly interested when the previous low (June 2012) was broken; see price chart from Bloomberg screen shot, with approximate blog start date indicated:  

Source: Generic 1st 'CO' Future CO1:COM

For Real Oil Prices, the Crash Is Even Bigger as China Fizzles by Grant Smith  January 14, 2016; ....West Texas Intermediate futures, the U.S. benchmark, sank below $30 a barrel on Tuesday for the first time since 2003. Actual barrels of Saudi Arabian crude shipped to Asia are even cheaper, at $26 -- the lowest since early 2002 once inflation is factored in and near levels seen before the turn of the millennium; .... West Texas Intermediate futures, the U.S. benchmark, sank below $30 a barrel on Tuesday for the first time since 2003. Actual barrels of Saudi Arabian crude shipped to Asia are even cheaper, at $26 -- the lowest since early 2002 once inflation is factored in and near levels seen before the turn of the millennium.....

HSBC's Bloom Says Speed of Yuan Drop Is Frightening

The Good News for China Is Hundreds of Stocks Oversold: Chart by Phil Kuntz January 14, 2016

Iron Ore `Not Yet at the Bottom' as Citigroup Says $20s Possible by   Jasmine Ng  January 14, 2016

Goldman Said to Mull Cutting Fixed-Income Staff More Than 5% by Michael J Moore January 14, 2016

12 Jan 2016: Bloomberg - Oil Extends Losses From 12-Year Low as Stockpiles Seen Expanding, China's Demand for Crude is Showing Signs of Cracking, 2016 growth losers, Brent Crude 31.33 

  • The recent price drop from around $38 toward $31 may highlight these major producers by cost: United States $36.20, Norway $36.10, Angola $35.40, Colombia $35.30, Nigeria$31.60. See diagram below.
  • Certainly also issues for POGO food-fuel price spread re. biodiesel. 
  • China GDP and oil demand is eyed, and into the future, car makers start to worry about tech disruption to their industry.

Source: What it costs to produce oil By Alanna Petroff and Tal Yellin / CNNMoney - The collapse in the price of oil has squeezed energy companies and countries that were betting on higher returns. Here’s what it costs on average to pump a barrel of oil in the 20 biggest oil producing nations. 

Oil tumbles nearly 5 percent to new lows; analysts warn of $20s - A brutal new year selloff in oil markets deepened on Monday, with prices plunging as much as 5 percent to new 12-year lows as further ructions in the Chinese stock market threatened to knock crude into the $20s.

Oil Extends Losses From 12-Year Low as Stockpiles Seen Expanding by Ben Sharples January 12, 2016, Inventories probably rose 2 million barrels last week: survey, Iran to starting selling new oil grade before boosting exports...

China's Demand for Crude is Showing Signs of Cracking - Resilient supply isn't the only problem for crude. by Luke Kawa, January 11, 2016;

The End of the Monetary Illusion Magnifies Shocks for Markets by Simon Kennedy January 8, 2016; Central banks no longer have as much room to deliver stimulus. HSBC says currencies most sensitive to policy in 15 years... Central bankers are no longer the circuit breakers for financial markets. Monetary-policy makers, market saviors the past decade through the promise of interest-rate reductions or asset purchases, now lack the space to cut further -- if at all -- or buy more. Even those willing to intensify their efforts increasingly doubt the potency of such policies. That’s leaving investors having to cope alone with shocks such as this week’s rout in China or when economic data disappoint, magnifying the impact of such events....

Meet 2016's Worst Economic Performers by Andre Tartar, A Catarina Saraiva,  Cynthia Li, January 11, 2016; Oil-rich Venezuela will contract by 3.3 percent this year, the worst forecast of any of the 93 countries in our analysis, followed by junk-rated Brazil, debt-laden Greece and commodities-ravaged Russia. Below are the bottom 10....

The driverless, car-sharing road ahead - Carmakers increasingly fret that their industry is on the brink of huge disruption Jan 9th 2016; ...Now, Mr Fields is talking about autonomous cars being ready to roll by 2020. More conservative car bosses add five years.... Barclays, another bank, forecasts that the fully driverless vehicle will result in the average American household cutting its car ownership from 2.1 vehicles now to 1.2 by 2040.... The 11m or so annual sales of mass-market cars for personal ownership in America may be replaced by 3.8m sales of self-driving cars, either personally owned or part of taxi fleets, Barclays thinks....

 6 Jan 2016: Mideast tensions trumped by oil supply glut? Markets start off rough - China's terrible start; Brent Crude 36.51

Editor's note: O&G job cuts are the making rounds in social media - I've seen this twice now (looks like Maybank report):

This Time Mideast Tensions Are Bad News for Oil by Angelina Rascouet  and  Anthony Dipaola January 5, 2016; ... That the rally this time couldn’t be sustained shows just how abnormal things are in the oil market. Brent crude is little changed this week as a global supply glut and the slowest Chinese growth in a generation trumped mounting strife between the nations on either side of the world’s busiest waterway for oil tankers....

China's Terrible Start to 2016 Has Beijing Fighting Market Fires by   Bloomberg News

Won Drops With Kospi on Quake Near North Korea Nuclear Test Site by  Justina Lee  January 6, 2016

4 Jan 2016: Big oil to cut investment again in 2016 - at around $37 a barrel, crude prices are well below the $60 some companies need, Saudi Arabia Cuts Ties With Iran, China factories slump, Brent Crude 37.93

Big oil to cut investment again in 2016 By Karolin Schaps and Ron Bousso Jan 3, 2016; At around $37 a barrel, crude prices are well below the $60 firms such as Total (TOTF.PA), Statoil STO.OL and BP (BP.L) need to balance their books, a level that has already been sharply reduced over the past 18 months. International oil companies are once again being forced to cut spending, sell assets, shed jobs and delay projects as the oil slump shows no sign of recovery.  U.S. producers Chevron (CVX.N) and ConocoPhillips (COP.N) have published plans to slash their 2016 budgets by a quarter. Royal Dutch Shell (RDSa.L) has also announced a further $5 billion in spending cuts if its planned takeover of BG Group (BG.L) goes ahead.

Saudi Arabia Cuts Ties With Iran After Tehran Embassy Attack by Zaid Sabah and Deema Almashabi January 4, 2016

Oil Finds a Silver Lining in China's Unsated Thirst for Crude by  Bloomberg News  January 4, 2016. Imports seen expanding 8% to 7.2 million barrels a day in 2016. Demand will be driven by stockpiling, independent refiners

China's Two-Speed Economy Stays Intact as Factories Slump, Services Gain by Bloomberg News

China Factory Gauge Signals Contraction Continued a Fifth Month by Bloomberg News  January 1, 2016

20 December 2015: Crude stockpiles highest for this time of year since 1930: EIA, Oil at Six-Year Low as Glut Worsens While Fed Boosts Dollar, Indonesia Stays on Hold as Fed Move Stokes Currency Fears,  Brent Crude 36.88

Oil heads for third straight weekly loss as supply weighs Dec 18, 2015 LONDON  |  By Karolin Schaps; The global supply glut that brought prices close to 11-year lows this week means Brent will post losses for a third consecutive year, the first time that has happened since exchange-based oil trading started in the 1980s.... Prominent oil trader Pierre Andurand said prices could fall below $25 a barrel in the first quarter of 2016....

Oil at Six-Year Low as Glut Worsens While Fed Boosts Dollar  by Rakteem Katakey and Ramsey Al-Rikabi December 18, 2015; Crude stockpiles highest for this time of year since 1930: EIA. Fed-induced dollar rally pushes commodities to 16-year low

This Year's Worst Commodity Is One You Probably Can't Pronounce by Sonja Elmquist and Joe Deaux December 18, 2015

Glencore's Rating Cut at Moody's Though Outlook Seen Stable by Jesse Riseborough  December 18, 2015; `Pricing environment in mining will remain unfavorable' Trading division will contribute `strongly' to profit: Moody's

Indonesia Stays on Hold as Fed Move Stokes Currency Fears December 17, 2015; Central bank decision forecast by 21 out of 22 economists. Vice president had been calling for cut to boost growth.

Dollar Rally Is Over for $60 Billion Unit of Norway's Top Bank  by  Jonas Cho Walsgard December 20, 2015; DNB says drop in commodities also getting `long in the tooth' DNB says room for profit margins to increase in Europe; For the unit at Norway’s biggest bank deciding how to invest client funds, 2016 will be a pivotal year as it predicts the rally in the U.S. dollar will finally come to an end. DNB Asset Management, which oversees about $60 billion, is adjusting its portfolio to profit from its forecast for a less buoyant dollar and a recovery in emerging markets and commodities...... The asset manager has “shaved a little bit off” its overweight in equities in technology stocks, consumer cyclicals, health care and finance, while moving up to market weight for its holdings in energy and materials. DNB Asset Management, which holds 70 percent in fixed income, 20 percent in equity and 10 percent is real estate, is overall neutral on equities. A low-growth outlook with flat earnings, monetary policies beyond a maximum point of liquidity and “neutral” pricing are all reason to be cautious, Mikkelsen said....

16 December 2015: China decision to suspend fuel cuts puts $38 floor under oil prices? Oil in $20s a Risk as Citigroup Sees Crude Storage Tanks Fill Up  and other Bloomberg news links, World Bank - 2016 will be "another disappointing year for the global economy as a whole, but especially for emerging markets and raw commodity producers; Brent Crude 38.37

China Has Something to Tell OPEC: Oil Prices Have Fallen Too Far by  Bloomberg News  December 16, 2015; Decision to suspend fuel cuts puts $38 floor under oil prices, OPEC effectively abandoned crude production quota on Dec. 4... “China’s decision to not cut refined product (gasoline, diesel) prices is a first,” analysts including Neil Beveridge wrote in the report. The move “sends a signal to OPEC that its largest customer (China) believes that oil prices are too cheap.” China, the world’s second-biggest oil consumer, said it will suspend fuel price cuts while crude continues to fall in order to slow consumption growth and trim automobile emissions. Gasoline demand in the country increased 10.4 percent in the first 10 months of the year from the same period of 2014, according to the Paris-based International Energy Agency.

World Bank president interview - The time is right for structural reforms by KEN MORIYASU, Nikkei staff writer; TOKYO -- For emerging markets, the state of "nirvana" they have been enjoying appears to be over. The commodities super cycle has ground to a halt, global trade is sagging, and investor confidence about keeping money in developing markets is declining rapidly. World Bank President Jim Yong Kim sees this as a defining moment, a crossroads, where countries decide whether they will go down the path of structural reform or stay the course..... Pure commodity exporters need to focus more on value-added. Instead of shipping out raw commodities, they need to be involved in processing them. Many economies have to diversify the sources of their economic growth. With oil and gas prices so low, it is also the right time to remove fossil fuel subsidies," he said....... Kim said that 2016 will be "another disappointing year for the global economy as a whole, but especially for emerging markets. There is much slower growth in emerging markets." In the "Global Economic Prospects" report issued in June, the World Bank set its 2016 growth forecast at 3.3% for the whole world and 5.2% for developing countries. The bank is expected to bring down both in the next Global Economic Prospects report due in January 2016....

Oil in $20s a Risk as Citigroup Sees Crude Storage Tanks Fill Up by Grant Smith  December 15, 2015

Why Forecasting Commodity Prices May Be Pointless  December 16, 2015 Aswath Damodaran, a New York University professor, discusses the outlook for commodity companies with Bloomberg's Alix Steel, Joe Weisenthal and Scarlet Fu on "What'd You Miss?" (Source: Bloomberg)

Japan's Pampered Cows Eat Cheap Feed to Get Profit on $250 Steak by Aya Takada December 16, 2015

Here's What 7 Years at Zero Rates Have Looked Like - Charting out the forces that kept policy easy  by Jeanna Smialek  December 16, 2015

China Seen Laying Down $15 Billion Bet on Electric Vehicles by  Bloomberg News  December 16, 2015

14 December 2015: IEA Warns of Worsening Oil Glut, oil slump biggest risk for Malaysia debt, climate deal requires $16.5 trillion, mining woes hit big miners, COP 21 links, Brent Crude 37.93

COP21: Paris climate deal is 'best chance to save planet' 13 December 2015

IEA Warns of Worsening Oil Glut

Oil Slump Now Biggest Risk for Malaysia Debt as 1MDB Mess Fixed by Elffie Chew  and Lilian Karunungan December 11, 2015; Fitch warns 2016 deficit may exceed prime minister's target. Default risk heads for biggest quarterly drop in four years. As Malaysia’s debt-ridden state investment company finds buyers for its assets, investors say slumping oil is the biggest threat still hanging over the nation’s finances.

Climate Deal Requires $16.5 Trillion Investment to Cut Pollution  by Alex Morales and Ewa Krukowska  December 13, 2015; UN deal in Paris would require much deeper fossil fuel cuts.  Envoys from 187 nations submit action plans to cut emissions The deal struck at United Nations climate talks requires an overhaul of historic proportions for energy policies worldwide and a huge investment in cleaning up the pollution now damaging the Earth’s atmosphere. Targets outlined in the agreement on Saturday, involving 195 countries, will require $16.5 trillion of spending on renewables and efficiency through 2030, according to the International Energy Agency. To accomplish that, governments will have to offer incentives for clean energy production, scale back support for fossil fuels like oil, make emissions more costly, and reduce deforestation. The changes will touch industries from transport to construction, and encourage people to change their behavior.

It's All Gone Wrong for One of World's Biggest Mining Companies  by Thomas Biesheuvel December 9, 2015; Anglo American will shrink to a shadow of its former self. $14 billion Brazilian mine epitomizes company's decline.. Even for a company that once had the global monopoly on diamond production during almost a century of all but constant expansion, the collapse in commodities prices is proving too much... Anglo American Plc, a conglomerate spanning everything from brewing, publishing and gold mining during its peak in the early 1990s, will shrink beyond recognition after Chief Executive Officer Mark Cutifani on Tuesday announced a package of asset sales, mine closures and job cuts. Among the potential casualties is Minas Rio, a Brazilian iron-ore mine where spiraling costs and collapsing prices turned a $14 billion project into the epitome of the company’s predicament. “Minas Rio is the high water mark of their mistakes,” said Jeremy Wrathall, head of global natural resources at Investec Plc. “It was a series of strategic errors, the collective madness of the super cycle where everyone got it wrong.”... ...


12 December 2015: Markets and commodities down, China may loosen Yuan's peg

S&P 500 Loses Nearly 4% for the Week as Commodities Tumble - U.S. crude falls below $36 a barrel, hitting nearly seven-year low By by Corrie Driebusch  Updated Dec. 11, 2015

China Signals Intention to Potentially Loosen Yuan's Peg to the U.S. Dollar - China's central bank signaled its intention to change the way it manages the yuan's value by potentially loosening its peg to the U.S. dollar and instead letting it track the currencies of its broader trading partners.  In an editorial posted on its website Friday night, the People's Bank of China said it makes more sense to measure the yuan's exchange rate against a basket of currencies than the dollar alone. The foreign-exchange trading system run by the central bank will start calculating a yuan exchange-rate index Friday to provide a reference against a basket of currencies, the PBOC said.


8 December 2015: Oil price hits fresh post 2009 lows as glut grows, oil-linked currencies take a beating, what a climate deal means for oil markets, carbon markets are making a comeback? Brent Crude 40.10

Brent Oil Falls Below $40 a Barrel - Fundamental concerns regarding oversupply still blight the market By Kevin Baxter Dec. 8, 2015

Oil Tumbles as OPEC Opens the Taps on Output Target December 8, 2015, OPEC's decision to not limit oil production has sent prices tumbling further, as Brent Crude fell to six-year lows in London trading. Bloomberg's Julian Lee and David Wethe examine the influence OPEC holds over the oil industry and the prospect of even more oil flooding the market going forward. They speak on "Bloomberg Markets." (Source: Bloomberg)

Oil price hits fresh post 2009 lows as glut grows Dec 8, 2015 LONDON  | By Dmitry Zhdannikov and Simon Falush...  Oil prices resumed their slide on Tuesday, with U.S. crude falling below $37 per barrel for the first time since early 2009, amid fears the world was running out of capacity to store crude as a global glut intensifies. The global oversupply is being compounded by OPEC's failure last week to agree a production ceiling, with members Iran and Iraq promising to ramp up output and exports next year....

OPEC's Oil Market Disarray Looks Like 1990s Slump All Over Again  by Javier Blas December 8 2015

When Abu Dhabi Resembles Frontier Market You Know Oil Hurts by Ahmed A Namatalla  and Arif Sharif December 8, 2015...Oil’s plunge to almost $40 a barrel is roiling the six-nation Gulf Cooperation Council, throwing government spending plans into disarray, sapping stock trading and valuations, driving up bank borrowing costs and ...

Cheap Oil Could Fuel Europe’s Refugee Crisis - As the price of oil falls, Iraq’s Kurds and the UN are struggling to look after those fleeing conflict.  by Tom Mackenzie and Ed Kiernan  December 8, 2015

Oil-linked currencies take a beating, Canadian dollar at 11-year low  Tue Dec 8, 2015 LONDON  | By Anirban Nag

Iron Ore in $30s Seen Near Tipping Point for Largest Miners by Jasmine Ng and David Stringer December 8, 2015

What a climate deal means for oil markets By Michelle Patron December 8, 2015 Over the next two weeks countries from around the world are convening in Paris to develop a global plan to address climate change. A successful deal in Paris could have significant impacts for energy and equity markets.... The most immediate market impact is in the power sector where a strong agreement will extend and accelerate the shift from coal to alternative power sources including renewables, nuclear and in some cases natural gas. The International Energy Agency estimates that renewable energy will become the largest single power source by 2040 and the share of coal will decline from 41 to 31 percent.... Continued improvements in vehicle efficiency and removal of fossil fuel subsidies can moderately reduce demand with the impact growing over time as the vehicle fleet changes. Success in Paris can also inject momentum into global negotiations underway on aviation and marine fuel controls. Perhaps the most critical variable for oil is how a deal impacts alternative fuels in road transportation....The bottom line is that global climate action widens the range of risks in the energy sector. Ten years ago, German utilities were seen as stable investments, now they are struggling under the weight of policies pushing renewables and reductions in technology costs. Prudent companies and investors should begin factoring these risks into their oil portfolios now...

Carbon Markets Are Making a Slow, But Steady, Comeback by Alex Nussbaum, Ewa Krukowska, Mathew Carr December 8, 2015 - The prophets of carbon markets think their day has come. Again. OECD head chides politicians for being ``a little trivial''...Two decades ago, Richard Sandor had a grand plan to reduce the pollution that causes global warming -- and maybe get rich in the process. The rich part worked. For the rest, reality intervened. Today, Sandor’s vision of thriving global carbon markets -- capitalist arenas that would turn the right to pollute into a commodity like gold or oil and, over time, reduce emissions -- has fallen well short of the mark. In its first attempts, prices collapsed, trading waned and early enthusiasts withdrew. The invisible hand of the market has yet to establish a firm grip. But with 195 countries now wrestling in Paris over how to reduce harmful greenhouse gases, the father of carbon markets, as Sandor is often dubbed, and his fellow travelers remain unbowed. They maintain their ma ket-based solution, despite its stumbles, still offers the best way forward. “I do think it’s an inexorable trend,” said Sandor, who has some experience in the matter. The 74-year-old is a serial inventor of trading mechanisms and widely credited with creating interest-rate futures and helping propel the Chicago Board of Trade from grain and pork bellies to sophisticated financial derivatives. In 2003, he formed the world’s first carbon exchange, which he sold seven years later for $600 million....

24 November 2015: Commodities strike 2002 bottom; end off low on oil - Saudi cooperation hope, hedge funds bearish US oil, Mexico windfall, China worries, Brent Crude 44.96


Dollar hovers near eight-month peak, buoyed by Fed policy expectations By Shinichi Saoshiro Nov 23, 2015

Commodities strike 2002 bottom; end off low on oil Nov 23, 2015 NEW YORK | BY BARANI KRISHNAN

Oil Advances as Saudi Arabia Reiterates Market Stability Pledge by Ben Sharples November 24, 2015

Cut Oil Supply or Drop Riyal Peg? Saudis Face ‘Critical’ Choice by Ahmed A Namatalla November 23, 2015

OPEC Seen Holding the Line as $40 Oil Looms Over Vienna Meeting  by Grant Smith and  Mark Shenk  November 24, 2015

Oil Trades Near $42 as Saudi Arabia Says It's Ready to Cooperate by Mark Shenk November 23, 2015; ... Venezuela predicted prices may tumble to the mid-$20s a barrel unless OPEC tackles the global surplus. Venezuela is urging the group to adopt an “equilibrium price” that covers the cost of new investment in production capacity, Oil Minister Eulogio Del Pino said Sunday

Oil Deal of the Year: Mexico Set for $6 Billion Windfall by Javier Blas November 23, 2015

Mining Stocks Lead Asia Losses as Metals Fall to Multi Year Lows  by Adam Haigh and Emma O'Brien November 24, 2015

Hedge funds turn very bearish on U.S. crude: Kemp LONDON | BY JOHN KEMP Nov 23, 2015

Bank of America: The 'Great Divorce' Between the World's Two Largest Economies Will Drive Currency and Rates Markets in 2016 - The "marriage of convenience" is over. by Luke Kawa November 24, 2015

A Hard Landing in China Could 'Shake the World' "A slowing China redistributes global economic activity through the commodity channel as much as dampening it"  by Malcolm Scott  November 20, 2015

Does China Have a $1.2 Trillion Ponzi Problem? November 20, 2015 - Chinese borrowers are taking on record amounts of debt to repay interest on their existing obligations, raising the risk of defaults and adding pressure on policy makers to keep financing costs low. Bloomberg's Stephen Engle has more on "First Up." (Source: Bloomberg)

10 November 2015: Platts - Comparisons between IEA, EIA, OPEC oil market forecasts, Bloomberg links on Saudi Oil MInister, oil market risks, Baltic Dry Index, bleak outlooks in steel-iron ore, copper; climate agreement issues, Brent Crude 44.10

Comparisons between IEA, EIA, OPEC oil market forecasts, London (Platts)--15Nov2015... "Stockpiles of oil at a record 3 billion barrels are providing world markets with a degree of comfort. This massive cushion has inflated even as the global oil market adjusts to $50/b oil. Demand growth has risen to a five-year high of nearly 2 million b/d, with India galloping to its fastest pace in more than a decade. But gains in demand have been outpaced by vigorous production from OPEC and resilient non-OPEC supply -- with Russian output at a post-Soviet record and likely to remain robust in 2016 as well," the IEA said. "The net result is brimming crude oil stocks that offer an uprecedented buffer against geopolitical shocks or unexpected supply disruptions."   But the IEA also noted forecasts of a mild winter in the US and Europe, adding that if these expectations turned out to be the case, "bulging stock evels will add further pressure and oil market bears may choose not to hibernate." 

Saudi Oil Minister Says OPEC With Others to Stabilize Market  by Wael Mahdi November 19, 2015; ...Brent has lost 23 percent this year. The oil market will start to re-balance next year and prices will improve, Matar al-Neyadi, energy undersecretary for the United Arab Emirates, said at the conference. ...

Biggest Oil Market Risks for 2016  November 19, 2015 Ecstrat strategist Emad Mostaque discusses the biggest oil risks in 2016 with Bloomberg's Joe Weisenthal, Alix Steel and Scarlet Fu on "What'd You Miss?" (Source: Bloomberg)

Baltic Dry Shipping Index Drops to All-Time Low by Manisha Jha and Naomi Christie November 19, 2015; ...The Baltic Dry Index, a measure of shipping rates for everything from coal to ore to grains, fell to 504 points on Thursday, the lowest data from the London-based Baltic Exchange going back to 1985. Among the causes of shipowners’ pain is slowing economic growth in China, which is translating into weakening demand for imported iron ore that’s used to make the steel....

Iron Ore Bludgeoned to Record Low in Asia on China Steel Concern  by  Jasmine Ng November 19, 2015

Steel Industry Peers Into Abyss as Output to Plunge  by Bloomberg News November 18, 2015

`Bleak' Copper Seen Needing 17% Drop to Force Deeper Cuts by  Martin Ritchie November 19, 2015

China Wants Legally Binding Climate Agreement From Paris Talks by  Bloomberg News  November 19, 2015

U.K. to Shut Its Dirtiest Coal Power Plants Within a Decade by  Lars Paulsson November 18, 2015 The U.K. plans to close all coal plants that haven’t been upgraded with cleaning technology by 2025 as the government signaled an exit from the world’s most widely used power-plant fuel.

13 November 2015: Reuters - rising inventories, OPEC sees glut shrinking, Bloomberg - U.S. Stocks Fall Amid Rate Concerns as Commodity Shares Tumble, China steel output drop and speeds up fiscal spend, commodities and commodity currency review; Brent Crude  44.06

OPEC sees oil surplus shrinking in 2016, but underlines current glut Nov 12, 2015 - OPEC said its oil output fell in October and forecast supply from rival producers next year would decline for the first time since 2007 as low prices prompt investment cuts, reducing a global supply glut.
U.S. oil prices fall to over two-month lows on rising inventories Nov 12, 2015 - U.S. crude oil dipped further in early trading on Friday to over two-month lows as prices fall over 10 percent since the beginning of November. Read more at
U.S. Stocks Fall Amid Rate Concerns as Commodity Shares Tumble  by  Kate Garber, November 12, 2015 the stronger dollar and a persistent slump in demand from China sent the Bloomberg Commodity Index to the lowest since 1999. The recent weakness in commodity shares is a turnabout after energy and raw-materials helped drive a rebound from a summer correction and in October had their strongest month in four years

Steel Output Drop in China Is Highly Probable, Noble Group Says by  Jasmine Ng November 13, 2015

China Speeds Up Fiscal Spending in October to Support Growth by  Bloomberg News  November 12, 2015

Commodities: What’s Fallen the Most?

Why Are Commodity Currencies Taking a Plunge?

Is China's Newest Skyscraper a Sign of Economic Doom? Sep 8 2015... What do New York's Empire State Building, Malaysia's Petronas Towers and Dubai's Burj Khalifa have in common? Each skyscraper opened as its country's once booming economy crashed! It's known as...

19 October 2015: Iran Urges OPEC to Cut Oil Output to Lift Prices to $70-$80, Brent Crude 49.69l; TPP awaits approval, UK welcomes Xi, China AIIB  has UK, Germany, Italy, France, Israel and other allies despite US plea

Saudi's China Oil Play Has No One Over a Barrel: David Fickling  by David Fickling October 19, 2015 — 11:57 AM HKT

Iran Urges OPEC to Cut Oil Output to Lift Prices to $70-$80  by Anthony Dipaola , Golnar Motevalli Hashem Kalantari  October 19, 2015 — 4:31 PM HKT Iran's oil minister says 'no one is happy' with current prices. OPEC members to boost exports in drive to regain market share

China Misses Out From TPP Exclusion, PBOC Researcher Ma Says  by  Bloomberg News October 9, 2015 — 10:59 AM HKT China's economy would be 2.2 percent larger if it joined TPP. PBOC research chief economist Ma Jun comments in article

TPP Awaits Approval; U.S. Moves to Atlantic Trade  October 8, 2015

Trans-Pacific Partnership Arrives as World Trade Growth Slows - The TPP lowers or wipes out tariffs on thousands of items.  by Simon Kennedy, Isabel Reynolds, Keiko Ujikane  October 9, 2015 — 4:14 AM HKT

U.K. Throws Lavish Welcome for Xi in Hopes of 'Golden Era' in China Trade  by David Tweed  October 19, 2015 — 6:00 AM HKT

China’s World Bank - Adding Muscle With Infrastructure Lending By Enda Curran | Updated Sept 24, 2015 3:52 PM EDT  Since the end of World War II, the U.S., Western Europe and Japan have controlled much of the business of loaning money to poor countries to help them build public works and strengthen weak economies. These loans, made through the World Bank, International Monetary Fund and Asian Development Bank, often came with demands for strict economic, ethical and environmental behavior. Now there’s a new player: China. It’s creating the Asian Infrastructure Investment Bank — the first major multilateral development bank in a generation — to offer loans for transportation, energy and communications projects. The U.S. tried to talk its allies out of joining the AIIB, questioning its governance and concern for the environment and human rights. The U.K. ignored Washington’s pleas and signed up, followed by Germany, Italy, France, Israel and other allies that decided to join forces with China. The Situation. Since the Asian Infrastructure Investment Bank was announced in October 2013, 57 countries have been accepted by China as founding members. They want to boost links with China and to do deals in its once-protected currency, the yuan. China, the world’s second-largest economy, has long been frustrated that it has only a small say in decisions by global financial institutions. The AIIB doesn’t plan to make loans before the end of this year and hasn’t announced specific projects, though it’s expected to invest in rebuilding the centuries-old Silk Road routes that linked China to Europe with highways, rail lines and port facilities. The Asian Development Bank estimates the region will require $8 trillion in new infrastructure by 2020.

11 October 2015: Cautious view on recent commodity rebound, large countries outside of TPP trade deal have sufficient scale to offset harm, China consumers care most about food safety and environmental pollution, Brent Crude 52.65

Commodities Rebound but Investors Remain Wary - Moves boost emerging-market nations, as broader picture for developing countries is uncertain By Ira Iosebashvili and  Chiara Albanese  Updated Oct. 9, 2015 7:06 p.m. ET ; A commodity-sector rebound this week lifted raw-material prices, mining-company shares and the currencies of developing nations, the latest sign of the whipsaw trading that has racked markets this year. Behind the past week’s recovery: tentative signs that China’s economy may be stabilizing after a decline in its growth rate, which could bolster demand for commodities. Many investors also cited a belief that ultralow interest rates will persist longer in the U.S., reducing further dollar appreciation. That in turn eases...

Citigroup’s Morse Says Commodities Drop Hasn’t Hit Bottom by  Cristiane Lucchesi  October 10, 2015

In Brazil, the Dangerous Game of Bottom Fishing Is Under Way by Denyse Godoy, Paula Sambo  and Matthew Malinowski empty text October 10, 2015

Goldman Sachs: This Oil Rally Is Not Going to Last - Nothing has really changed. by Luke Kawa  October 9, 2015

Emerging Currencies Post Biggest Weekly Gain Since 1998 on Fed  by Lyubov Pronina and Lilian Karunungan   October 9, 2015   Indonesian rupiah, Russian ruble, Malaysian ringgit lead gains. Pimco, ANZ see renewed pressure from yuan devaluation, dollar...

Rupiah and Ringgit Have Best Weekly Gains in More Than a Decade  by Y-Sing Liau  and Yudith Ho  October 9, 2015, Fed speculation, rising share and commodity prices drive rally. Rebound isn't supported by fundamentals: Standard Chartered...

China news

China Plans Charging Stations for 5 Million Plug-in Cars by 2020 by   Bloomberg News  October 9, 2015 — 11:01 AM HKT...

China’s Heft Gives It Ammunition Against the Trans-Pacific Partnership Trade Deal - Sheer scale and demand at home to help offset harm from staying outside trade pact By Brian Spegele  Oct. 9, 2015 5:10 a.m. ET ; BEIJING—China’s huge domestic market, deep supply chain and push to create more consumers at home gives it heft to dispel challenges of the new Pacific trade pact that it isn’t a party to. On the surface, China appears a clear loser by its exclusion from the Trans-Pacific Partnership, which aims to deepen economic ties and lower or eliminate tariffs in the 12-member bloc led by the U.S. and Japan. But company executives and...

The Tianjin Explosions: A Signal for Reform - Commentary By Stanley Lubman Sep 7, 2015; As of this date, 161 deaths have been reported and thousands of residents displaced in Tianjin. 23 people have been detained: 11 municipal officials and port executives accused of negligence and abuse of power, and 12 people including top executives of Ruihai. There appears to have been a pattern of wholesale disregard of safety regulations that could have limited the dangers. Moreover, for years before Ruihai began to plan its facilities, local scholars had documented the dangers posed by storage of dangerous materials close to residential neighborhoods. They were unable to generate concern among regulatory officials. Ruihai began storing chemicals without obtaining a license. The company falsely stated that the location of the warehouses complied with national safety regulations, which would have required them to be situated further from residences and a highway. It then stored different volatile materials haphazardly instead of separately, “at safe distances, and in smaller quantities as recommended in the industry.” The Chinese government has previously acknowledged the need for more efficient regulation of hazardous chemicals at local levels — but local governments have been reluctant to comply, with little consequence. The head of the Ministry of Industry and Information Technology acknowledged recently that work on plans to relocate or upgrade almost 1,000 chemical plants was slowed because the Ministry’s work “is not actively supported locally in the past year.” (emphasis added).... According to a March 2015 China Youth Daily poll of Chinese citizens, more than 77 percent ranked food safety as “the most important quality of life issue,” with environmental pollution close behind. Early last month the Supreme People’s Procuratorate announced that it has begun a two-year campaign targeting corrupt officials involved in food-safety crimes. In addition, the influence of major oil and coal companies in weakening the “war on pollution” has been well documented.

29 September 2015:  Commodities regression back to the 1990s, Saudi royal calls for regime change, Glencore jitters, Congress hearings led banks to scale back before commodities plunge, JBS making killing on sinking BRL, Brent Crude 48.22

U.S. Stock-Index Futures Pare Gains Along With Commodity Prices  by  Alan Soughley and Camila Russo September 29, 2015 — 3:51 PM HKTUpdated on September 29, 2015 — 9:22 PM HKT

 - commodities index back to the 1990s chart 

The 10-Point. Gerard Baker  Editor in Chief The Wall Street Journal; Mine Collapse   -  Plunging commodity prices, sparked by an economic slowdown in China, are causing havoc for one of the world’s biggest and most famously aggressive mining and trading companies. A recent collapse in the shares of Glencore is casting a long shadow on the unique corporate structure engineered by its chief executive, even though he got a little relief this morning with a small recovery in the stock price. Global stocks were showing signs of steadying earlier today after a sharp selloff in Asia. Meanwhile, the downturn in commodities is causing other casualties. Royal Dutch Shell will become the latest big oil company to abandon the riches under the northern seas in the face of stubbornly low crude prices. The oil giant is quitting its $7 billion Arctic campaign after drilling just one well with disappointing results.

Saudi royal calls for regime change in Riyadh - Plea by grandson of state’s founder comes as falling oil prices, war in Yemen and loss of faith in authority buffet leadership of King Salman by Hugh Miles in Cairo Monday 28 September 2015 16.14 BST ; Plea by grandson of state’s founder comes as falling oil prices, war in Yemen and loss of faith in authority buffet leadership of King Salman

One Company Is Making a Killing on Brazil's Sinking Real by  Gerson Freitas Jr September 29, 2015 — 10:00 AM HKTUpdated on September 29, 2015 — 5:11 PM HKT;  Global beef king now makes more money on derivatives than meat. Strategy costs 4 billion reais a year, twice JBS's 2014 profit; Tucked away in an industrial neighborhood in Sao Paulo, six members of JBS SA’s sprawling meatpacking empire are making a fortune on the collapse in Brazil’s currency. The group may only account for 0.003 percent of JBS’s 215,000-strong workforce, but it’s on track this year to generate more profit than the beef, poultry and pork operations combined.

Glencore Shares Soar After Company Says It's Financially Robust by  Jesse Riseborough  September 29, 2015 — 3:04 PM HKTUpdated on September 29, 2015 — 9:27 PM HKT

Take Glencore Private If Market Unfair, Citi Says With `Buy' by Jasmine Ng September 29, 2015 — 1:26 PM HKTUpdated on September 29, 2015 — 5:53 PM HKT
Glencore could be the resource sector's Lehman Brothers By business editor Ian Verrender Updated about 9 hours ago
Glencore shares obliterated after analysts warn they could be worthless - The stock collapsed by 30pc in afternoon trading, wiping more than £2bn off the value of the company

With Glencore, commodity rout beginning to look like a crisis September 29, 2015 - 1:41PM  by Bradley Olson

How Congress Helped Save Goldman Sachs From Itself by  Michael J Moore  September 29, 2015 — 9:24 AM HKT; Hearings led banks to scale back before commodities plunge. `It's a dangerous business,' Goldman's Viniar said in 2007. In October 2011, things were looking bleak at Goldman Sachs Group Inc.’s commodities business. Revenue was down, competition was up, employee attrition was at an all-time high and new regulations were on the horizon.


15 September 2015: WSJ - global trade slump, oil producers financial reckoning, Glencore new low, commodity day traders; Crude Oil (Brent) 46.62

Worries Rise Over Global Trade Slump - Growth in exports and imports is lagging far behind the pace during past expansions, threatening productivity and living standards By William Mauldin  Updated Sept. 14, 2015 10:06 p.m. ET  A sharp drop in global trade growth this year is underscoring a disturbing legacy of the financial crisis: Exports and imports of goods are lagging far behind their pace of past expansions, threatening future productivity and living standards. For the third year in a row, the rate of growth in global trade is set to trail the already sluggish expansion of the world economy, according to data from the World Trade Organization and...

Oil Patch Braces for Financial Reckoning - Smaller producers are girding for cuts to credit lines, as crude prices show little sign of rebounding  By Daniel Gilbert, Erin Ailworth and Alison Sider  Sept. 14, 2015 7:50 p.m. ET

Glencore Shares Hit New Low Since Debt-Reduction Plan Announced - Collapse in commodities prices, concerns about debt push stock down  By Alex MacDonald and Josie Cox  Updated Sept. 15, 2015 9:32 a.m. ET  LONDON—Glencore PLC shares hit a new low Tuesday, reversing last week’s gains as coal prices fell and investors became fretful about the company’s debt-rescue plan. Shares in the Swiss commodities trader and producer fell nearly 8% to an intraday low of 118 pence before paring back some of the losses to 123 pence by midafternoon European trade, still down more than 3%. The rest of the U.K. mining sector also fell, with the FTSE 350...

Day Traders Struggle Amid Commodities Rout - Volatility both attracts traders and makes it far more difficult to make money By Ese Erheriene  Sept. 14, 2015 6:49 a.m. ET; While day trading is largely associated with equity markets, these investors also began moving into commodities after 2006 when some Chicago-based brokerages began offering commodities options to retail traders. There they believe they can profit from the sector’s extreme volatility and predict supply and demand for resources, like oil and gold, that they are familiar with...Oil in particular has attracted such investors....Losses from the financial crisis in 2008 wiped out many day-traders, but academics say their numbers have been building again, particularly in developing countries like Russia and China. Mr. MacDonald-Korth believes that private individuals, including day-traders, account for 80% of trading in China, for instance. The extreme volatility of recent months has encouraged day-traders, academics and traders say. Since March, London-based Amplify Trading has had a five-month waiting list for the program that it runs to train day traders. Last month, the training company arranged an open evening for 20 prospective traders, but 60 people showed up....

13 September 2015: Oil Extends Weekly Drop: How Low Can Prices Go?  El-Erian  and other views. Dollar enters pivotal week. What should the Fed do next? Crude Oil (Brent) 48.14

Oil Extends Weekly Drop: How Low Can Prices Go? 3:16 AM HKT  September 12, 2015 Bloomberg's Alix Steel updates the latest commodities markets news. She reports on "Bloomberg Markets." (Source: Bloomberg)

El-Erian: The Oil Market Is Unhinged  September 12, 2015 Bloomberg View Columnist Mohamed El-Erian discusses the price of oil. He speaks on "Bloomberg Markets." His opinions are his own. (Source: Bloomberg)

Is Goldman's $20 Oil Forecast Real or Just a Scenario? 2:31 AM HKT  September 12, 2015   Societe Generale Head of Commodities Research Michael Haigh discusses the price of oil. He speaks on "Bloomberg Markets." (Source: Bloomberg)

One Oil Chart, Two Views  September 12, 2015  Bloomberg's Alix Steel and Joe Weisenthal take a look at the outlook for oil prices. They speak on "What'd You Miss?" (Source: Bloomberg)

Canadian Stocks Slump as Oil Price Slides on Goldman Outlook  by Dani Burger and Eric Lam   September 12, 2015 — 1:01 AM HKTUpdated on September 12, 2015 — 4:50 AM HKT Benchmark index ends lower for week, erasing earlier gain. Baytex Energy and Bonavista Energy lead slump in oil companies

Dollar Enters Pivotal Week With Crisis-Period Trades Uwinding by Jennifer Surane September 12, 2015 — 12:01 PM HKT Commodity currencies staged the steepest gains this week Dollar weakens as futures suggest traders betting Fed on hold Currency traders are putting the frenzy of August behind them, signaling that global markets have calmed as Federal Reserve policy makers consider raising interest rates for the first time since 2006. As the final countdown before the Fed’s Sept. 16-17 meeting begins, traders are exiting positions taken on during last month’s market rout. Commodity currencies such as the Australian dollar and South African rand, among the biggest losers in the wake of China’s Aug. 11 yuan devaluation, staged some of the steepest gains this week. The yen, a haven during the August tumult, posted the deepest weekly loss among major currencies....

Kenneth Rogoff Slams One of the Most Popular Theories for What the Fed Should Do Next - The Fed should wait for proof on inflation. by Luke Kawa September 12, 2015 — 1:20 AM HKT' Market participants have been coalescing around the view that the Federal Reserve's liftoff from near-zero interest rates will be a "one and done" affair. That is, market metrics suggest that monetary policymakers will likely hike rates once, then wait a considerable time to assess how financial markets and the real economy digest this less stimulative stance. But in an appearance on Bloomberg Surveillance, Kenneth Rogoff, Harvard professor of economics and public policy, questioned the rationale of this view. "What is the logic of doing it, also?" he said in response to a question on the merits of a rate hike followed by a long pause. "It's very asymmetric. If we see inflation, they can start raising rates, and if you go in the wrong direction, it's harder to do something about it." Since the end of the Great Recession, other centra  banks, notably Sweden's Riksbank and the European Central Bank, were forced to backtrack on rate hikes.

11 September 2015: IEA forecasts oil supply outside OPEC to fall, Goldman says oil could drop toward $20; Crude Oil (Brent) 48.00

Oil Could Drop as Low as $20, Goldman Says by Ben Sharples September 11, 2015 — 1:45 PM HKTUpdated on September 11, 2015 — 4:41 PM HKT

Oil Supply Outside OPEC to Fall Most Since 1992, IEA Forecasts by  Grant Smith  September 11, 2015 — 4:00 PM HKT  > indepth  >  The New Oil Order  > indepth  >   China tremors

22 August 2015: No End in Sight for Oil Glut? Turmoil in Financial Markets Worsens on China Manufacturing Data. Crude Oil (Brent) 45.46

No End in Sight for Oil Glut - Crude-price plunge is deepening, yet producers keep pumping By Russell Gold  Aug. 20, 2015 7:35 p.m. ET  When oil prices started to edge down a year ago, most energy mavens thought the drop would be small and short-lived.  Instead, the price of crude has plunged by almost 60% from its 2014 peak—and suddenly looks likely to stay low for months and maybe years to come. The reason: In the global battle for market share, nobody has backed down. Nobody has even blinked. Not Saudi Arabia, not the U.S., and not even troubled producers from...

U.S. Oil Prices Hit Fresh Six-Year Low, Dipping Below $40 a Barrel;

Turmoil in Financial Markets Worsens on China Manufacturing Data  by  Stephen Kirkland and Joseph Ciolli  August 21, 2015 — 6:54 AM HKTUpdated on August 21, 2015 — 11:18 PM HKT

These Charts Show How Hard China Has Hit Global Markets - The damage is everywhere by  Trista Kelley and Camila Russo  August 22, 2015 — 1:41 AM HKT

How Much Longer Can Saudi Arabia's Economy Hold Out Against Cheap Oil? Saudi Arabia got lucky when the oil price fell in 1998. What about now? by  Vivian Nereim and Donna Abu-Nasr  August 21, 2015 — 12:01 PM HKT

Dow Plunges 531 Points in Global Selloff;... The Dow industrials lost 530.94 points, or 3.1%, to close at 16459.75, putting it in correction territory, as defined by a 10% decline from a recent high. ...

Dollar Plunges on Global Growth Worries, U.S. Rates Uncertainty;

14 August 2015: Who's going colder on renewable energy

Canada is not the first country where a feed-in tariff (Fit) scheme has been ended. The UK, which has stopped supporting onshore wind and solar energy, in 2011 withdrew tax relief from some Fits, leading a number of the larger ones to close.

14 August 2015: Yuan slide, oil price fall in peak season for oil, $58 Brent outlook in survey, most pessimistic points to cash cost of production, Crude Oil (Brent) 49.19

Yuan Slide Takes Toll on Chinese Firms - Dollar borrowers suffer $11 billion in currency-exchange loss over three days   By  Fiona Law  Updated Aug. 13, 2015 7:02 p.m. ET The yuan’s surprise fall is likely to saddle some Chinese companies with billions of dollars in foreign-exchange losses, just when borrowers are grappling with towering debt burdens and slowing growth at home.
Ultralow global interest rates and tight lending in domestic markets drove many Chinese firms to look abroad to borrow more cheaply.

Crude Prices Seen Staying Below $70 a Barrel Over The Next Year - Survey of 10 banks suggests oil oversupply will continue and weigh on prices  By Georgi Kantchev  Aug. 13, 2015 6:14 a.m. ET  As U.S. crude prices hit a six-year low Thursday, a survey of 10 investment banks by The Wall Street Journal showed increasing pessimism about the outlook for oil. The average forecast of 10 banks surveyed this month was for oil prices to stay below $70 a barrel until late next year. They expect Brent crude, the international price benchmark, to average $58 a barrel this year, down from the forecast of $62 a barrel in May’s survey.

$20 Oil? Three Things We Learned This Week - Everyone wanted to read about oil, the yuan and Google.  August 15, 2015 — 12:05 AM HKT 1) Oil As crude tumbles in its worst summer ever, experts are lining up to forecast exactly how low it will go. Among the lowest so far is $10 to $20 a barrel, which came from Gary Shilling, president of A. Gary Shilling Co., who spoke in a Bloomberg Television interview on Friday. Because fixed costs are already spent, drillers in a “price war” will keep pumping as long as prices are above the cash costs of production...

Oil's Worst-Ever Summer Signals Price Rout Is Nowhere Near Done by Grant Smith  August 14, 2015 — 6:29 PM HKTUpdated on August 14, 2015 — 8:20 PM HKT  If crude’s slump back to a six-year low looks bad, it’s even worse when you reflect that summer is supposed to be peak season for oil. U.S. crude futures have lost 30 percent since the start of June...

Oman’s Daily Oil Output Tops 1 Million Barrels for First Time  by  Maher Chmaytelli  August 15, 2015 — 6:10 PM HKT

U.S. Eases 40-Year Crude Export Ban by Allowing Mexico Swap  by Brian Wingfield and Dan Murtaugh August 15, 2015 — 1:00 AM HKTUpdated on August 15, 2015 — 12:01 PM HKT

OPEC Supply Reaches 3-Year High as Iran Pumps Most Since ’12 by  Grant Smith  August 11, 2015 — 6:30 PM HKTUpdated on August 12, 2015 — 12:12 AM HKT

11 August 2015: China's Devaluation of Yuan Jolts Global Markets  - WSJ, Crude Oil (Brent) 48.95 c 11:02AM EDT

China's Devaluation of Yuan Jolts Global Markets - China's devaluation of its currency jolted global markets, hitting stocks and commodities and boosting government bonds. The S&P 500 fell 0.7% in early trade. The pan-European Stoxx Europe 600 index was down 1.5% early afternoon. Most Asian bourses fell and currencies sank. Oil prices fell sharply, while demand for haven assets pushed down bond yields in the U.S. and Europe, as investors worried that Beijing's move signaled growth concerns over the world's second-largest economy.

Mining Stocks Are Taking a Beating by  Javier Blas and Eddie Van Der Walt  August 11, 2015 — 10:09 PM HKTUpdated on August 11, 2015 — 10:43 PM HKT

10 August 2015: Move to Allow U.S. Oil Exports Accelerates; Crude Oil (Brent) 48.46

Move to Allow U.S. Oil Exports Accelerates - Big voices in the oil industry and Congress now support a move that would have been unthinkable not long ago: opening the U.S. oil industry to exports By  Amy Harder  Aug. 9, 2015 2:12 p.m. ET; Big voices in the oil industry and Congress now support a move that would have been unthinkable not long ago: opening the U.S. oil industry to exports. The U.S. has long pushed for liberalized trade, with U.S.-produced crude being the biggest exception since the shock of the 1973 Arab oil embargo led Congress to ban oil exports under nearly all circumstances. The only other U.S. products banned under the same regulations are a type...; WSJ 10 points writes: 27% The share of U.S. petroleum from foreign sources—its lowest level since 1985. Big voices in the oil industry and Congress now support a move that would have been unthinkable not long ago: opening the U.S. oil industry to exports.

Dormant Saudi Bond Market Stirs as Oil Kingdom Seeks $27 Billion by  Daria Solovieva and Deema Almashabi  August 10, 2015 — 4:01 AM HKTUpdated on August 10, 2015 — 3:00 PM HKT

For Norway, Oil at $50 Is Worse Than the Global Financial Crisis Scandinavia's richest nation is facing a mess  by  Saleha Mohsin  August 10, 2015 — 1:19 PM HKT

S&P 500 Flouts History in Break With Bonds That Often Ends Badly  by  Lu Wang  August 10, 2015 — 12:00 PM HKT

5 August 2015: The oil price war is set to get vicious - Money Morning, California Has a Plan to End the Auto Industry as We Know It,Obama’s Climate Push Sets Up Battle Reminiscent of Obamacare; Crude Oil (Brent) 50.14

The Economist explains: The global addiction to energy subsidies  Jul 26th 2015, 23:50 by E.L

ENERGY prices have been falling for a year. Over the last month that trend has accelerated. On July 24th, the price of a barrel of oil in America reached a low of $48. In spite of this, governments are still splurging on subsidies to prop up production. Fossil fuels are reaping support of $550 billion annually, according the International Energy Agency (IEA), an organisation that represents oil- and gas-consuming countries, more than four times those given for renewable energy. The International Monetary Fund’s estimates are substantially higher. It said in May that countries will spend $5.3 trillion subsiding oil, gas and coal in 2015, versus $2 trillion in 2011. That is equivalent to 6.5% of global GDP, and is more than what governments across the world spend on healthcare. At a time of low energy prices, high government debt and rising concern over emissions there is scant justification for such spending. So why is the world addicted to energy subsidies?

California Has a Plan to End the Auto Industry as We Know It  - Mary Nichols, the California regulator who showed the world how to clean up smog, is pushing for all cars to be electric.  by John Lippert August 3, 2015 — 12:01 PM HKT

Obama’s Climate Push Sets Up Battle Reminiscent of Obamacare  Aug 4, 2015 2:28 AM WST

President Barack Obama unveiled a landmark set of regulations to combat climate change in a plan that requires states to cut emissions from power plants, setting up a red-state, blue-state battle reminiscent of Obamacare...

Gulf Arab States Voice Support for Iran Nuclear Deal - WSJ

The oil price war is set to get vicious 14 July, 2015 by Money Morning; Here’s an interesting statistic.  Saudi Arabia is pumping more crude oil than ever before.  In June, it produced 10.6 million barrels a day. That’s the highest on record, and up 200,000 barrels compared to May.  Why is it pumping out oil like there’s no tomorrow?... Saudi Arabia’s record oil output can be explained by one little magic word: competition.Oil cartel Opec got used to the feeling of having the world in the palm of its hands over the past decade or so. Oil prices soared. Everyone said that $100 a barrel was the new norm. It’d never get cheaper than that again. We’d just have to suck it up. The thing is, high oil prices made it worth everyone’s while to start looking for other sources of the stuff. And that’s when ‘fracking’ really took off in the US. At first, everyone dismissed it as overhyped. Then, as the natural gas flowed freely, the argument was that fracking might work for gas, but it wouldn’t change the oil market.Of course, it did. US crude oil output is now up to around 9.7 million barrels a day, according to the US Energy Information Administration. It’s hard to emphasise how astonishing this is. If someone had told you in 2000 that the US was less than two decades away from being as big an oil producer as Saudi Arabia, you’d have laughed them out of town. (It’s events like this that make me take the ‘secular stagnation’ argument with a hefty pinch of salt. Secular stagnation is just the latest ‘new paradigm’ view designed to justify our odd financial environment. It also provides intellectual cover for central banks to go on experimenting with monetary policy.)....

Anyway, getting back to the point in hand. I’ve mentioned this before, but think of this being like supermarket price wars.  If you own a big shop, earning decent profit margins from a captive audience, and a smaller rival opens up and starts to undercut you, what do you do? Do you keep your own prices high, and let him continue to steal market share?  No chance. You slash prices as low as possible, sit back on your copious cash reserves, and wait for the other guy to go out of business.  That’s what Saudi Arabia’s doing. It doesn’t cost much for it to increase production, so it pumps more oil. The oil price crashes, and US oil producers – who require higher prices – either stop drilling or go out of business.  There’s also the small matter of Iran re-entering the oil market now that a deal seems to have been agreed to relax sanctions. As David Sheppard puts it in the FT, Saudi Arabia “is unlikely to want to cede market share or see its regional rival enjoy a higher price.”

31 July 2015: How Cheap Oil Is Fueling a Surge In New Factories (chemical plants), Roubini on factors weighing on commodities, China stocks crash - Bloomberg, Shell and Centrica cut jobs, Iran nuclear deal; Crude Oil (Brent) 53.12 c 10:54PM EDT

How Cheap Oil Is Fueling a Surge In New Factories by Vince Golle July 31, 2015 — 2:13 AM HKT; The construction of chemical plants is making up for a slowdown in oil-well drilling

Roubini: Combination of Factors Weighing on Commodities 48:54 -  Roubini Global Economics Chairman Nouriel Roubini talks about the factors affecting commodity prices and the reduced pricing power of OPEC. He speaks on "Bloomberg Surveillance." (Source: Bloomberg)

Shell and Centrica cut 12,000 jobs

China’s Stocks Extend Slump in Worst Monthly Decline Since 2009  by Kyoungwha Kim July 31, 2015 — 9:24 AM HKTUpdated on July 31, 2015 — 11:25 AM HKT China’s stocks fell, with the benchmark index heading for its worst monthly drop in almost six years, as the government struggles to rekindle investor interest amid a $3.5 trillion rout. The Shanghai Composite Index slid 0.9 percent to 3,672.45 at 11:24 a.m. local time. The gauge has tumbled 14 percent this month, the biggest loss among 93 global benchmark gauges tracked by Bloomberg, as margin traders cashed out and new equity-account openings tumbled amid concern valuations are unsustainable.

As China Stocks Crash, This Top-Ranked Fund Steps In to Buy  July 31, 2015 — 9:00 AM HKTUpdated on July 31, 2015 — 10:28 AM HKT

The Iran Nuclear Deal – A Simple Guide By WILLIAM J. BROAD and SERGIO PEÇANHA UPDATED July 14, 2015
Negotiators reached a historic accord on Tuesday to limit Tehran’s nuclear ability in return for lifting international oil and financial sanctions. Here is a guide to the Iran nuclear deal.


21 July 2015: Bloomberg - Wall Street Lenders Growing Impatient With U.S. Shale Revolution,  Gold Leads Commodities ‘Mess’ That Has Many Investors Smarting, Oil Guru Who Called 2014 Slump Sees Return to $100 Crude by 2020; Crude Oil (Brent)  56.51

Wall Street Lenders Growing Impatient With U.S. Shale Revolution  by Asjylyn Loder, Bradley Olsonand Dawn Kopecki July 21, 2015 — 7:01 AM HKT Halcon Resources Corp. almost ran into trouble with its banks in June 2013. And again in March 2014. And in February 2015. Each time, the shale driller came close to violating debt limits set by its lenders, endangering a credit line that provided as much as $1.05 billion in much-needed cash. Each time, Halcon’s banks, led by JPMorgan Chase & Co. and Wells Fargo & Co., loosened their restrictions, allowing Halcon to keep borrowing.

That kind of patience may be coming to an end. Bank regulators have issued warnings on the risks involved in lending to U.S. drillers, threatening a cash crunch in an industry that’s more dependent than ever on other people’s money. Wall Street has been one of the biggest allies of the shale revolution, bankrolling thousands of wells from Texas to North Dakota. The question is how that will change with oil prices down by half since last year to about $50 a barrel. "Lenders in general are increasing pressure on oil companies either to raise more equity or do some sort of transaction to pay down their credit lines and free up extra cash,” said Jimmy Vallee, a partner in the energy mergers and acquisitions practice at law firm Paul Hastings LLP in Houston....

Gold Leads Commodities ‘Mess’ That Has Many Investors Smarting  by Isaac Arnsdorf July 21, 2015 — 7:00 AM HKTUpdated on July 21, 2015 — 10:17 AM HKT  Pity the commodity investor. The Bloomberg Commodities Index is holding losses after dropping Monday to a 13-year low, weaker than after the banking meltdown of 2008 and the euro-zone crisis of 2012. From oil to copper to sugar, little has escaped the rout in the year’s worst-performing asset class. “Commodities are a mess,” said Walter “Bucky” Hellwig, who helps manage $17 billion at BB&T Wealth Management in Birmingham, Alabama, in a telephone interview. “We are not looking to add to positions.”

Oil Guru Who Called 2014 Slump Sees Return to $100 Crude by 2020  by Javier Blasand Grant Smith July 20, 2015 — 11:20 PM HKT


16 July 2015: WSJ - Resurgent Dollar Shakes Off Slump - Janet Yellen’s rate-increase remarks jolt greenback higher, Investors Get Caught in Oil’s Slippery Wake - Value of shares in many energy firms sold this year in follow-on offerings has declined, Crude Oil (Brent)  57.69

Resurgent Dollar Shakes Off Slump - Janet Yellen’s rate-increase remarks jolt greenback higher By Ira Iosebashvili And  James Ramage   July 15, 2015 6:31 p.m. ET  Four months ago, a roaring rally in the dollar sputtered out. Now it is revving back up. The greenback is close to regaining all the ground it has lost since March, when it hit a 12-year high. Driving the broad gains against other currencies is growing confidence that the U.S. economy has picked up enough speed following a first-quarter slump to warrant the first interest-rate increase in nearly a decade. Higher rates tend to make a...

Investors Get Caught in Oil’s Slippery Wake - Value of shares in many energy firms sold this year in follow-on offerings has declined By Ryan Dezember And Corrie Driebusch  July 15, 2015 7:27 p.m. ET  Falling oil prices are hitting investors who bought energy shares this year. The value of shares sold by U.S. and Canadian exploration-and-production companies this year in 47 follow-on offerings sit $1.41 billion shy of the $15.87 billion investors paid for them, according to a Wall Street Journal analysis of Dealogic data. The pullback “has really taken the Street by surprise,” said William Herbert, co-head of securities at...

14 July 2015: Why Saudi Arabia is pumping record crude - Bloomberg video, The Latest Sign That Coal Is Getting Killed - Bloomberg; Crude Oil (Brent), 57.36

Why Saudi Arabia is pumping record crude - Bloomberg video

The Latest Sign That Coal Is Getting Killed, Coal is a sick dragon, and the bond market wields a heavy sword  by Tom Randall July 13, 2015 — 8:00 PM HKT; Coal is having a hard time lately. U.S. power plants are switching to natural gas, environmental restrictions are kicking in, and the industry is being derided as the world's No. 1 climate criminal. Prices have crashed, sure, but for a real sense of coal's diminishing prospects, check out what's happening in the bond market....


9 July 2015: Oil Rout Seen Ending as Demand Trumps China’s Market Crash  - Bloomberg, Crude Oil (Brent) 57.85

Oil Rout Seen Ending as Demand Trumps China’s Market Crash  by Grant Smith July 8, 2015 — 9:42 PM HKTUpdated on July 9, 2015 — 12:37 PM HKT il’s biggest slump in four years will lose momentum because the plunge in Chinese equities and Greece’s economic crisis won’t dent global demand, according to Morgan Stanley, UBS Group AG and Societe Generale SA. Crude is set for a “modest recovery” after declining 13 percent in the five sessions through Wednesday, Morgan Stanley estimates, while demand will push prices up by year-end, according to hedge fund manager Andrew J. Hall. Any nuclear deal with Iran won’t quickly revive the OPEC member’s crude exports, so wouldn’t immediately weigh on prices, Societe Generale said....

CORRECT: China’s Stocks Cap Biggest Gain Since 2009 July 9, 2015 — 9:29 AM HKT Updated on July 9, 2015 — 3:08 PM HKT; China’s benchmark stock index capped the biggest gain since 2009 in volatile trading as the government battled to restore investor confidence in a market that lost $3.9 trillion in less than a month.


8 July 2015: China stock market rout spreads to other financial markets, Refracking Is the New Fracking - Bloomberg; Crude Oil (Brent)  56.42

Refracking Is the New Fracking by Dan Murtaugh, Lynn Doanand Bradley Olson  July 7, 2015 — 7:05 AM HKTUpdated on July 7, 2015 — 9:31 PM HKT; The technique itself is nothing new. Oil crews across the world have been schooled on its simple principles for generations: Identify aging, low-output wells and hit them with a blast of sand and water to bolster the flow of crude. The idea originated somewhere in the plains of the American Midwest, back in the 1950s.... But as today’s engineers start applying the procedure to the horizontal wells that went up during the fracking boom that swept across U.S. shale fields over the past decade, something more powerful, more financially rewarding is happening.The short life span of these wells, long thought to be perhaps the single biggest weakness of the shale industry, is being stretched out. Early evidence of the effects of restimulation suggests that the fields could actually contain enough reserves to last about 50 years, according to a calculation based on Wood Mackenzie Ltd and ITG Investment Research data....

VEGOILS-Palm oil drops for 2nd day on Greek concerns, weak soyoil By Naveen Thukral SINGAPORE, July 7 (Reuters)  *Palm oil closes 1.1 pct lower on global concerns *Expectations of lower June output limit losses...The September palm oil contract on the Bursa Malaysia Derivatives exchange dropped 1.1 percent, or 25 ringgit, to 2,210 ringgit ($581.6) a tonne by close.

The C word... “China’s stock market rout is now spreading to other financial markets, creating a sweeping sense of panic and a liquidity crunch,” Zheng Ge, an analyst at Wanda Futures Co., said by phone in Beijing...…/euro-holds-drop-as-greece-deadli

China Markets Fall Sharply Despite Fresh Help From Beijing - Fears about faltering Chinese demand rattles commodities markets;  By Gregor Stuart Hunter  Updated July 7, 2015 10:06 p.m. ET, Chinese markets fell sharply early Wednesday, even as Beijing scrambled to arrest a three-week stock selloff.

China Freezes Trading in 1,300 Companies, Locking Up 40% of Market Cap  by Kyoungwha Kimand Fox Hu July 8, 2015 — 9:38 AM HKTUpdated on July 8, 2015 — 11:09 AM HKT

1 July 2015:  Crude Calculus: More Pain in Store for Investors says Citigroup, Crude Stockpiles Unexpectedly Increase, Petrobras slashes capex in bid to cut debt, restore confidence, Crude Oil (Brent) 62.89

Crude Calculus: More Pain in Store for Investors - Ed Morse, global head of commodities research at Citigroup, doesn’t think oil prices have reached a bottom this year By Nicole Friedman  June 30, 2015 11:13 a.m. ET; The oil market came roaring back in the second quarter, as traders rode a crude-price rally from $44 a barrel in mid-March to more than $60.

Oil prices lost half their value in 2014 due to booming production from the U.S. and the Organization of the Petroleum Exporting Countries and an unexpected slowdown in demand. But after prices hit near six-year lows in March, investors bet that rising demand and cutbacks in drilling would eat...

Crude Stockpiles Unexpectedly Increase by 2.39M Barrels 10:52 PM HKT  July 1, 2015 Crude stockpiles reported an unexpected build during the past week as inventories climbed by 2.39 million barrels according to the Energy Information Administration. Bloomberg’s Julie Hyman reports on “Bloomberg Markets.” (Source: Bloomberg)

UPDATE 2-Petrobras slashes capex in bid to cut debt, restore confidence By Jeb Blount (Reuters) - Brazil's state-run oil company Petrobras slashed its long-term spending plan to the lowest level in eight years on Monday as new management moved to reduce the industry's largest debt burden and restore confidence after a devastating corruption scandal. Petroleo Brasileiro SA, as the company is formally known, will invest $130.3 billion in the 2015-2019 period, the company said in a statement. The capital expenditure plan is 41 percent lower than the $221 billion projected in its previous five-year plan, covering the 2014-2018 period. It also trimmed its 2020 forecast for its global production by nearly a third to 3.7 million barrels of oil and equivalent natural gas a day (boepd), from its estimate of 5.3 million boepd a year ago. The investment plan, the company's smallest since 2008, is its first major admission that spending and expansion plans imposed on it by two successive center-left Workers' Party govern ents over the last decade were not realistic, especially in the face of falling world oil prices....

Petrobras To Announce Five Year Budget Cuts This Week 6/28/2015 @ 11:07AM ; After a grueling 9 hour budget meeting, the board of directors of Petrobras  have come up with just how much money they’ll be slicing and dicing from the country’s most important corporation. The market will get a sense of the cuts on Monday. Preliminary estimates have put cuts upwards of 40% less than previous planned at the start of the year. Petrobras has been reeling from high debts and a high profile corruption scandal that sent its share price to $5 in March and its credit rating to junk in February. As a result, the company has been shedding non-core assets, including sales of oil fields in Argentina.  The company is not expected to sell any of its pre-salt oil fields deep under the ocean floor in Brazil’s Atlantic waters, but overall capital expenditures will be drastically reduced. It is hard for investors to see how this won’t impact Petrobras’ lucrative oil finds. On Friday, in fact, Eduardo Cunha, Brazil’s leading congressman in the lower house of congress, recommended changes to current legislation on the lucrative pre-salt fields that would no longer require drillers to give Petrobras a 30% stake in the well....

27 June 2015: Oil Tankers Are Filling Up, Crude Oil (Brent)  63.26

Oil Tankers Are Filling Up and Raking It In - Surging crude-oil output has to go somewhere By Christian Berthelsen  June 25, 2015 7:11 p.m. ET The oil-tanker market is heating up, a development some analysts say is a warning flare that signals further price declines for crude. The Baltic Dirty Tanker Index, which tracks the rates to hire oil tankers plying 16 routes, has shot up 25% this month, as global oil output continues to grow. The index is now at its highest level since January 2014.....

22 June 2015: Speculators Retreat From Oil as OPEC Oversupply Crowds Out Shale and The Shale Industry Could Be Swallowed By Its Own Debt, Goldman Sees Iron Back Below $50 as Balance of Power Shifts   - Bloomberg; Crude Oil (Brent)  63.01

Speculators Retreat From Oil as OPEC Oversupply Crowds Out Shale  by Moming Zhou June 22, 2015 — 7:01 AM HKTUpdated on June 22, 2015 — 12:05 PM HKT  Hedge funds reduced both bullish and bearish bets on oil for a fourth week as rising OPEC output was met with forecasts for a contraction in U.S. supply. Money managers trimmed their short wagers in West Texas Intermediate oil by 4.3 percent and long bets by 0.2 percent, leading to a 0.8 percent gain in the net-long position, U.S. Commodity Futures Trading Commission data for the seven days ended June 16 show. Trading in futures is falling as WTI swings in a $5 range, the narrowest in 19 months. The Organization of Petroleum Exporting Countries pumped the most oil last month since October 2012, while the U.S. government says output will start falling from this month. Investors are watching a June 30 deadline for Iran and six other nations to reach a nuclear deal that could lift oil sanctions and further swell a global supply glut.

The Shale Industry Could Be Swallowed By Its Own Debt by Asjylyn Loder June 19, 2015 — 7:00 AM HKTUpdated on June 19, 2015 — 1:23 PM HKT  The debt that fueled the U.S. shale boom now threatens to be its undoing. Drillers are devoting more revenue than ever to interest payments. In one example, Continental Resources Inc., the company credited with making North Dakota’s Bakken Shale one of the biggest oil-producing regions in the world, spent almost as much as Exxon Mobil Corp., a company 20 times its size. The burden is becoming heavier after oil prices fell 43 percent in the past year. Interest payments are eating up more than 10 percent of revenue for 27 of the 62 drillers in the Bloomberg Intelligence North America Independent Exploration and Production Index, up from a dozen a year ago. Drillers’ debt ballooned to $235 billion at the end of the first quarter, a 16 percent increase in the past year, even as revenue shrank. “The question is, how long do they have that they can get away with this,” said Thomas Watters, an oil and gas credit analyst at Standard & Poor’s in New York. The companies with the lowest credit ratings “are in survival mode,” he said.

Goldman Sees Iron Back Below $50 as Balance of Power Shifts  by Jasmine Ng June 22, 2015 — 11:54 AM HKTUpdated on June 22, 2015 — 3:42 PM HKT  Iron ore is headed back below $50 a metric ton as supplies from Australia and Brazil expand and a slump in steel prices squeezes mills’ profits, according to Goldman Sachs Group Inc., repeating a forecast that recent gains won’t last. Freight data from terminals in the two biggest shippers showed volumes rose 10 percent in the first half of June compared with the average over the first five months, the bank said in a report dated June 21. The rise will be sustained, allowing inventories in China to recover and sending prices lower again, Goldman said, predicting ore will average $49 a ton in the third quarter and $48 in the final three months. Iron ore’s been on a roller-coaster ride, sinking to a decade-low in April as surging low-cost output from miners including Rio Tinto Group boosted a glut. Tumbling stockpiles in the biggest user, after imports missed expectation  helped to spur gains in April, May and the first two weeks of June. Goldman and Australia & New Zealand Banking Group Ltd. are among banks predicting higher ore prices won’t last, while Rio says further production is planned even as demand growth weakens.

“Rising supply from Brazil and Australia, which in aggregate account for 80 percent of seaborne exports, together with subdued demand from Chinese steel mills will once again shift the balance of power from producers to consumers,” analysts Christian Lelong and Amber Cai wrote.

8 June 2015: Iran to Boost Oil Exports After Sanctions; Crude Oil (Brent) 63.31

Iran to Boost Oil Exports After Sanctions Even If Prices Fall by Claudia Carpenter June 7, 2015 — 7:39 AM BSTUpdated on June 7, 2015 — 9:03 AM BST

Iran will increase crude exports with the end of international sanctions even if oil prices decline, the country’s representative to OPEC said, adding supply after a surplus sent Brent falling almost 50 percent last year

1 June 2015: Bloomberg - WTI Holds Near $60 as Saudis Pump at Record Before OPEC Meeting  and other news links; Crude Oil (Brent)  65.33

WTI Holds Near $60 as Saudis Pump at Record Before OPEC Meeting  By'Mark Shenkand Rupert Rowling 7:46 AM HKT  June 1, 2015 Oil traded around $60 a barrel in New York as Saudi Arabia maintained crude output at a record in May before OPEC meets this week to discuss its production policy.

Nigerian Oil Hurt by Tussle Between OPEC and U.S. - Once a highly desired, easy-to-refine product, Nigeria’s oil is now hard to sell By  Sarah Kent  June 1, 2015 2:36 a.m. ET   LONDON—In the escalating duel between U.S. and OPEC oil production, few countries’ oil industries have been hit as hard as Nigeria, highlighting a challenge for the petroleum cartel ahead of its meeting Friday. The West African nation has lost business in its main market in the U.S. and struggled to gain footholds elsewhere, raising a question for the Organization of the Petroleum Exporting Countries over whether its decision to fight for market share may have left behind more vulnerable members.

OPEC likely to keep output unchanged at June 5 meeting: delegates VIENNA  |  By Rania El Gamal and Alex Lawler Sun May 31, 2015 1:23pm EDT

OPEC’s Pricing Leverage Is Weakening - OPEC expected to leave crude oil output unchanged, showing how cartel’s power to sway prices has ebbed

OPEC’s Front Lines in the Shale Fields and Wall Street - U.S. oil output, aided by capital markets, is looking resilient.

Morgan Stanley Sees ‘Some Risk’ OPEC May Increase Output Target 'By'Ben Sharples 9:08 AM HKT  June 1, 2015


29 May 2015: The Tanker Market Is Sending a Big Warning to Oil Bulls  - Bloomberg; Crude Oil (Brent)  63.08

The Tanker Market Is Sending a Big Warning to Oil Bulls 'By'Naomi Christieand Bill Lehane May 28, 2015 Four months into oil’s rebound from a six-year low, the tanker market is sending a clear signal that the rally is under threat. A sudden surge in demand for supertankers drove benchmark charter rates 57 percent higher in the two weeks through May 20. OPEC will have almost half a billion barrels of oil in transit to buyers at the start of June, the most this year, while analysts say about 20 million barrels is being stored on ships in another indication the glut has yet to dissipate.

The Organization of Petroleum Exporting Countries is pumping the most oil in more than two years, determined to defend market share rather than prices. A record cut to the number of active U.S. drilling rigs and billions of dollars of spending reductions by companies since last year’s price plunge has yet to translate into a slump in barrels produced. The world is pumping about 1.9 million barrels a day more crude than it needs, according to Goldman Sachs Group Inc. “Supply of oil continues to build,” said Paddy Rodgers, the chief executive officer of Antwerp, Belgium-based Euronav NV, whose supertanker fleet can haul 56 million barrels of crude. “All of this oil needs to go somewhere,” he wrote in an e-mail May 19.....


27 May 2015: Iraq About to Flood Oil Market in New Front of OPEC Price War; Crude Oil (Brent)  63.88

Iraq About to Flood Oil Market in New Front of OPEC Price War - If shipping schedules are correct, a tidal wave of oil is coming....

14 May 2015: Crude has been moving up nicely, but some think it a trading bottom fish while fundamentals not changed much; Crude Oil (Brent)  66.53

Crude Oil (Brent)  66.53 9:22PM EDT

Oil's Not Coming Back. Here's Why 'By'Moming Zhou 7:01 AM HKT   May 13, 2015

Global oil demand will grow just 1.3 million barrels a day to 94.58 million next year, the Energy Information Administration said Tuesday. Photographer: David Paul Morris/Bloomberg
Oil bulls who’ve cheered a rebound of 40 percent from a six-year low should take heed: Unless demand accelerates, the rally is in danger. The omens aren’t good. The U.S. government expects global consumption to grow next year at less than half the rate of 2010, when the world was emerging from a previous recession. The growth is insufficient to close the gap with rising supply, according to Royal Dutch Shell Plc, Europe’s biggest energy producer. The last time oil crashed, during the 2008 financial crisis, China’s appetite for commodities seemed insatiable, and powered prices higher. This time, Chinese fuel use is growing at half the rate of the past decade, and sliding U.S. shale output could reverse as prices rise, smothering the gains. “The recent rally appears driven by investors looking at catching the bottom of the market and the expectation that U.S. oil production has reached a turning point,” said Harry Tchilinguirian, BNP Paribas SA’s London-based head of commodity markets strategy. “But fundamentals, notably in the U.S., have not changed much.”...

Looking for 24 Billion Barrels - Shell Wins U.S. Approval to Explore for Oil Off Alaska’s Arctic

Three years after the company halted Arctic operations, the Interior Department endorsed Shell’s exploration plan for the warm-weather drilling season in the Chukchi Sea.

Saudi Arabia Is Making Its First Real Attempt to Be a Military Power 'By'Glen Carey 4:00 AM HKT   May 14, 2015

Korea’s Fuel-Cell Strategy Takes Page From China Solar Playbook 'By'Christopher Martin 7:00 AM HKT   May 14, 2015

5 May 2015:To buy or not to buy: M&A in the E&P sector and The significance of the physical and the benefits of oil barrels - Platts blog; Crude Oil (Brent)  68.15

To buy or not to buy: M&A in the E&P sector — Energy Economist By Ross McCracken | May 1, 2015 10:37 AM Comments (0)  In this month’s highlight of material from Platts Energy Economist, managing editor Ross McCracken delves into the best places to sink capital in a time of low oil prices and whether recent investments have truly trickled through the industry yet. It is not hard to find proponents of the view that the current clampdown on capital expenditure by oil and gas companies will cause a shortage of oil in the future. Weak investment now causes low production in years to come. At the same time, low prices prompt greater demand. As soon as these two processes become entrenched, oil traders will look ahead to the impending shortage and prices will rise. Boom time returns. In this month’s edition of Energy Economist, Robert Smithson of Taube Hodson Stonex puts forward a very different scenario. Smithson argues that in production terms, the impact of record levels of E&P investment in recent years has still to feed through. Moreover, he says that US tight oil production is much more like traditional ‘long cycle’ conventional oil production than it appears.

The significance of the physical and the benefits of oil barrels: Petrodollars By Ned Molloy | April 27, 2015 12:01 AM Comments (0); Ned Molloy explains the benefits of having ownership of physical barrels — and how companies that do so are still competing in trading with those armed only with information — in this week’s Oilgram News column, Petrodollars. Owning a flow of oil, either through an equity stake in fields or a long-term off-take agreement, is not limited to majors or independent producers of course. It is one way oil trading houses have tried to deepen their insight into the markets in which they compete....... While buying fixed logistical assets can be a way to access information, it is also partly a response to other market participants having more information. Most trading houses own mid-stream assets like terminals and storage tanks — these have always been crucial in their business of exploiting fleeting, time-sensitive arbitrage opportunities, instead of waiting in a queue to use someone else’s facilities while the opportunity passes........ But some analysts say that increasing levels of transparency in the oil market are actually driving trading firms towards ownership of fixed assets, as information that isn’t in the public domain becomes more valuable....... Physical assets and end-to-end supply chains give traders access to exclusive and non-public information about the market. So as a result of the ever-increasing transparency brought to oil markets by price reporting agencies like Platts, “the informational value of physical-asset ownership is increasing,” according to a McKinsey consultancy paper........

29 April 2015: Bloomberg - The Oil Rally Looks Doomed, in Five Charts - The glut remains, and producers are ready to pounce with fresh supplies; Reuters - VEGOILS-Palm slides to 8-month low as ringgit continues to climb; Crude Oil (Brent)  64.50

The Oil Rally Looks Doomed, in Five Charts - The glut remains, and producers are ready to pounce with fresh supplies. 'By'Isaac Arnsdorf 10:07 PM HKT   April 28, 2015

Oil has surged 20 percent this month to $57 a barrel as expanding violence in Yemen stoked concern that supplies could be disrupted. The rally follows the biggest drop since 2008, with crude falling as low as $43.46 a barrel in March, as a price war broke out between OPEC producers and U.S. shale drillers. West Texas Intermediate oil, the U.S. benchmark, is now back up at close to a four-month high. Prices gained in each of the last six weeks, the longest stretch in more than a year. Before deciding prices will race back to $100, here are five charts worth keeping in mind. "The cart is moving ahead of the horse," Barclays Plc analysts said in an April 27 report....

VEGOILS-Palm slides to 8-month low as ringgit continues to climb 28-Apr-2015 06:16:40 PM By Anuradha Raghu;  Malaysian ringgit rises as high as 3.5440 per U.S. dollar Palm oil to test support at 2,076 ringgit - technicals Climate indicators suggest El Nino is forming - Australian weather bureau

KUALA LUMPUR, April 28 (Reuters) - Malaysian palm oil futures slid to an eight-month low on Tuesday as the ringgit continued to gain traction, stoking worries that overseas buyers may shy away from palm at a time when the tropical plant enters a higher production cycle. The Malaysian currency rose as high as 3.5440 against the U.S. dollar, its strongest since Feb. 9, in its third straight session of gains, making the ringgit-priced palm feedstock more expensive for foreign customers. "Palm is under pressure because of the strong ringgit, and talk of higher production estimates," said a trader with a foreign commodities brokerage in Malaysia....."It (the discount) has to be at a level where it can attract demand. At the moment, it is not enough," the Malaysia-based trader added.
Palm olein POL-MYRBD-M1 is currently around $70 cheaper than Argentine soyoil BO-ARGUPR-P1, from an under $25 discount early April, but narrower than $160 at the start of 2015.....

24 April 2015: Saudi-led airstrikes in Yemen, all sides willing to enter peace talks, opinion - Why the Crisis in Yemen Could Tilt Mideast Power From Saudi Arabia Toward Iran, Turkey and Pakistan; Crude Oil (Brent)  64.66

Oil Set for 6th Weekly Gain as Airstrikes Shift Focus From Glut  after 'By'Heesu Lee 7:09 AM HKT  April 24, 2015; Oil headed for a sixth weekly advance as renewed speculation that Middle East shipments may be disrupted amid Saudi-led airstrikes in Yemen shifted focus from the expanding U.S. glut.... Futures were little changed in New York and are up 3.2 percent this week. Raids by a coalition of mostly Sunni Muslim nations against Shiite rebels marked an escalation of the civil war in Yemen, a country near major oil fields and adjacent to key shipping routes. While U.S. crude stockpiles are at an 85-year high, data on Wednesday showed the nation’s output slid for a second week amid a drop in drilling activity....

AP Interview: Yemen Peace Talks Inevitable, Says UN Official By KARIN LAUB Associated Press  AMMAN, Jordan — Apr 23, 2015, 3:33 PM ET; A renewal of talks on ending Yemen's conflict is "inevitable" and behind-the-scenes diplomatic efforts could bring results in the coming weeks, including a possible U.N.-hosted conference involving most parties, the head of U.N. operations in Yemen said Thursday.... The Gulf nation of Oman is also involved in mediation, Paolo Lembo, the U.N. resident coordinator in Yemen, told The Associated Press in an interview.... Lembo, speaking at a hotel in Amman, Jordan, said all sides "are aware that there is no other solution" than a political settlement, but that fighting will likely continue for some time.... All sides have declared their willingness to enter talks, but none have taken steps so far to halt the fighting. On Thursday, Shiite rebels pressed ahead with an offensive in the south and a Saudi-led coalition bombarded them from the air, less than two days after it said it was scaling back air strikes.... The battle in Yemen, the Arab world's poorest country, pits the Houthi rebels and their allies— military units loyal to former President Ali Abdullah Saleh — against the Saudi-led coalition and the forces of President Abed Rabbo Mansour Hadi, Yemen's internationally recognized leader....

Graham E. Fuller - Former vice chairman, CIA’s National Intelligence Council: Why the Crisis in Yemen Could Tilt Mideast Power From Saudi Arabia Toward Iran, Turkey and Pakistan Posted:  04/23/2015 4:30 pm EDT    Updated:  4 hours ago; Does anybody remember the old Cold War geopolitical concept of the "northern tier states?" They consisted of three countries -- Turkey, Iran and Pakistan (and sometimes Afghanistan) that lay along the southern border of the Soviet Union; they were perceived in the West as a potential bulwark against Soviet aggression southward into the Middle East. Is it possible that today we are witnessing the recrudescence of a "northern tier" bloc? This time, however, the bloc would not be united against Russia at all. On the contrary, these three states demonstrate warming congeniality with many aspects of Russian, Chinese and Eurasian geopolitical views.... The ongoing crisis in Yemen may have become the midwife to such a development. If so, it is Iran that seems to be pulling the pieces together of a new loose power coalition in the Middle East.... Saudi Arabia's much-publicized creation of a Sunni coalition to fight "the Iranian and Shiite threat" in Yemen and the Gulf recently took two major body blows: the unexpected defection of both Turkey and Pakistan as active partners in Saudi Arabia's military campaign in Yemen, after having initially indicated they would join in.... Yes, it's notable that Turkey, Iran and Pakistan are all non-Arab states in the Middle East. But in speaking of a new "northern tier," we're not really talking about an Arab versus non-Arab bloc. The differences are more ideological and geopolitical; they involve differing visions of the future that may reorder the geopolitical map in the Middle East. The "northern tier states" could come to constitute a new informal power bloc that challenges Riyadh's bold, new, reactionary ambitions in the region....

19 April 2015: Fresh forecasts of US close to oil output peak, global markets shudder, Canada outlook on $40 oil, Crude Oil (Brent)  63.45

The 10-Point.  Gerard Baker Editor in Chief of The Wall Street Journal 
.... Meanwhile, crude-oil production remains strong, but fresh forecasts, including one yesterday from the Organization of the Petroleum Exporting Countries, suggest that the U.S. is at—or very close to—an oil-output peak. The boom will end this year, OPEC said, joining other energy forecasters this week in pointing to an imminent fall in U.S. production. It remains unclear whether America will start pumping a lot less oil or just stop adding thousands of new barrels each month.

U.S. Stocks Close Sharply Lower as Global Markets Shudder - The Dow Jones Industrial Average fell 279.67 points, or 1.5%, to 17826.10 on Friday as global stocks slumped, driven by a new round of jitters over Greece's finances, a crackdown on stock-market borrowing in China and a flurry of subpar U.S. corporate earnings. The S&P 500 declined 23.83 points, or 1.1%, to 2081.16, and the Nasdaq Composite fell 75.98 points, or 1.5%, to 4931.81. The Stoxx Europe 600 index was 1.8% lower, mirroring declines in other major indexes across the continent. Yields on 10-year German government bonds hit a record low of 0.07%, as investors pulling cash out of stocks sought safety.

What Canada will look like with $40 oil By Andrew Seale | Insight – Tue, 7 Apr, 2015 1:57 PM EDT.. Reuters/REUTERS - A rusty oil barrel lies in the middle of a road in the largely empty new township built for workers of the Pengerang Integrated Petroleum Complex in Pengerang, in the southeastern tip of Johor, February 4, 2015. A collapse in oil prices …more  It’s looking like a dreamy summer for roadtrippers.... According to TD Economics’ latest Commodity Price report, oil could hit US$40 a barrel in the second quarter of 2015. “While crude oil prices appear to have stabilized over the last two months, more weakness is likely in store,” says the report. “The market is amply supplied, and storage in the U.S. is expected to bump up against full capacity within the next few months, which should lead to another leg down in oil prices.” But while the bargain barrel prices won’t hurt the wallet when it comes to filling up the car, long-term effects will be harder to spot says Ambarish Chandra, assistant professor of economics at University of Toronto’s Rotman School of Management.... “Oil is fundamentally volatile, we know that, so I wouldn’t be shocked if it spikes again but if it does stay at this level for awhile, I think of exchange rates first,” says Chandra.

For starters, Canada will be exporting less oil products and what is exported will bring in less revenue, hurting the dollar.... “The loonie would be relatively weak for awhile,” he adds. “For a lot of Canadian households it just means foreign goods become more expensive, travel to the U.S. will be harder and less attractive, the same with foreign travel.”... In theory, local goods may be less expensive but Chandra points out companies are sluggish when it comes to adjusting their prices to match lower transportation costs. “Prices are sticky, they tend not to move,” he says. “They don’t want to change prices and then have to change them back again three months later or six months later knowing the price of oil is volatile.” He points to the airline industry as a prime example. “People keep expecting airlines to lower their prices, because after all they raised them in response to the higher price of oil,” he says. “I wouldn’t be shocked if the drop in oil prices doesn’t effect airline prices at all.”........

13 April 2015: China growth slows, HK stocks chase, USD strength, BHP and Rio are flooding an oversupplied iron ore market; Germany renewables control center ensures uninterrupted power; Brent 57.96

Crude Oil (Brent) 57.96 12:52AM EDT

China Growth Last Quarter Seen Worst Since Global Recession,

Major Warning Signs From China's Economy April 10, 2015,

Greed Never Felt So Good to Hong Kong Bulls Chasing Stock Gains,

The $9 Trillion Short That’s Seen Sending the Dollar Even Higher,

BHP, Rio Faulted by Barnett on Iron as Citigroup Sees $30s 'By'Jasmine Ng 7:59 AM HKT   April 13, 2015; The biggest iron ore producers including BHP Billiton Ltd. and Rio Tinto Group are pursuing a flawed strategy of flooding an oversupplied market and they should slow down expansions, the premier of Western Australia said. Shares fell.

Germany Proves Life With Less Fossil Fuel Getting Easier 'By'Stefan Nicolaand Reed Landberg 7:00 AM HKT   April 13, 2015; Sitting in a control center that helps ensure uninterrupted power for 82 million Germans, Gunter Scheibner is proving that renewable energy from the sun and wind can be just as reliable as fossil fuels..... Scheibner, in charge of keeping flows stable over 6,200 miles (9,976 kilometers) of transmission lines in eastern Germany, must keep power from solar and wind in harmony whether it’s sunny or overcast, windy or still. In doing so, he’s overcoming the great challenge for renewable energy: how to keep supplies steady when the weather doesn’t cooperate.

The system Scheibner manages has been so successful that Germany experiences just 15 minutes a year of outages, compared with 68 minutes in France and more than four hours in Poland. The model in Germany, the biggest economy in the world to rely so heavily on renewables, is being copied from California to China as wind and solar displace traditional fuels such as nuclear and coal.....

4 April 2015: Oil falls after tentative nuclear deal for Iran,  Crude Oil (Brent)  54.95

Crude Oil (Brent)  54.95

Oil falls nearly 4 percent after tentative nuclear deal for Iran NEW YORK  |  By Barani Krishnan Thu Apr 2, 2015 8:07pm EDT (Reuters) - Brent oil fell nearly 4 percent on Thursday after a preliminary pact between Iran and global powers on Tehran's nuclear program, even as officials set further talks in June and analysts questioned when the OPEC member will be allowed to export more crude.

Traders had been fixated on the talks held in Lausanne, Switzerland for over a week as Iran tried to agree with six world powers on concessions to its nuclear program to remove U.S.-led sanctions that have halved its oil exports. The sanctions against Iran will come off under a "future comprehensive deal" to be agreed by June 30, after it complies with nuclear-related provisions, Iranian Foreign Minister Javad Zarif told a news conference. "If nothing is going to be signed until June, something could go wrong between now and then," said Phil Flynn, analyst at Price Futures Group in Chicago.
Bob McNally, an adviser to former U.S. president George Bush who heads energy research firm Rapidan Group, noted Iran will need much patience as the "sanctions are not likely to be lifted until late 2015 or early 2016, though we could see slippage beforehand." North Sea Brent crude futures, the more widely-used global benchmark for oil, settled down $2.15, or 3.8 percent, at $54.95 a barrel, almost $1 above the session low. U.S. crude futures settled down 95 cents, or 2 percent, at $49.14 a barrel, after falling nearly $2 earlier.

U.S. oil rig count cull eases, approaches low point NEW YORK  |  By Edward McAllister  Thu Apr 2, 2015 2:23pm EDT  (Reuters) - Two weeks of thin declines in the U.S. rig count have raised expectations that drilling activity is nearing a pivotal level that could dent production, bolster prices and coax idle rigs back to the field after a precipitous cull since October. Energy producers responded quickly to a steep drop in oil prices over the last six months, idling nearly 800 rigs, or 50 percent, since a peak of 1,609 rigs in October. In the last week of January, rigs fell by 94, the biggest drop on record, according to a weekly survey by oil service firm Baker Hughes. [RIG/U] U.S. companies remain nervous about oil prices. Spending has been cut as prices fail to rebound significantly, and further price drops could quickly lead to more shrinkage in the rig count.  But the decline has slowed, dropping by just 23 rigs in the last two weeks, the smallest weekly cuts since December, according to the latest survey released on Thursday, a sign that the rig count could be approaching its low point. Some reckon that a 50-60 percent drop is as far as it will fall, once energy firms remove their least efficient rigs. "Production companies are in a holding pattern for now," said Eric Lee, analyst at Citi in New York. "It could be the beginning of the flattening of the decline in the rig count."

2 April 2015: Iron ore slump to extend? Thailand amassing rubber hoard. Brent 55.70

Crude Oil (Brent)  55.70

Iron Ore Seen Extending Slump Below $50 as BHP, Rio Decline 'By'Jasmine Ng 12:30 PM HKT  April 2, 2015; Iron ore, which fell below $50 a metric ton on Wednesday, may extend losses as weakening producer currencies cut mining costs, reducing incentives for the supply cuts needed to balance the market, according to Societe Generale SA.... Lower energy prices have lessened freight expenses and the inability of many high-cost Chinese miners to cut output means that iron ore will stay weak, Mark Keenan, Singapore-based head of commodities research for Asia, said on Thursday. The steel-making raw material will probably drop into the low $40s a ton in the coming weeks, IG Markets Ltd. said in an e-mailed note....

As Rice Mountain Shrinks, Thailand Risks Amassing Rubber Hoard 'By'Supunnabul Suwannakijand Jasmine Ng 9:42 AM HKT  April 2, 2015; Eight months after Thailand’s military junta started selling rice into an oversupplied global market, the officers are taking a different tack amid a rubber glut.

But this approach by Thailand, the world’s biggest exporter of both commodities, may cause as many problems in global markets as the old one, analysts say. That’s because while the rubber purchases revived domestic prices that touched a five-year low in October, they’re failing to cut a global production surplus that is entering its fifth year, according to data from the International Rubber Study Group.... Demand is slowing in China, the world’s top buyer and tire exporter, and natural rubber faces stiffer competition from synthetic material made from crude oil, which costs half what it did a year ago. Rubber prices are down more than 70 percent from their 2011 peak as trees planted in Asia over the past decade matured and flooded the market. That hurt farmers and cut costs for users of the raw material, including Goodyear Tire & Rubber Co. and Michelin & Cie.... “Thailand’s approach is just pushing the problem down the road,” Colin Hamilton, head of commodities research at Macquarie in London, said by e-mail on March 20. “The market needs supply to exit, not be encouraged.”...

30 March 2015: Brent eases back to $56 on renewed glut worries, Iran deal eyed, fracking link to earthquakes?

Crude Oil (Brent)  55.80

Iran Deal Unlikely Before March 31 as Russia Leaves Talks  'By'Jonathan Tirone, Kambiz Forooharand Henry Meyer 4:46 PM HKT  March 30, 2015 (Bloomberg) -- Russian Foreign Minister Sergei Lavrov planned to leave nuclear talks with Iran, suggesting any accord may not come until the final hours before a March 31 deadline.... Lavrov and his counterparts from five world powers and Iran met around the same table Monday for the first time in the latest round of talks in Lausanne, Switzerland. He’ll return if there’s a “realistic understanding of a deal,” Russian Foreign Ministry spokeswoman Maria Zakharova said. “The main thing that gives us optimism is the determination of all the ministers to reach a result without taking a pause,” said Lavrov’s deputy, Sergei Rybakov. Negotiations are in “a critical phase,” German Foreign Ministry spokesman Sebastian Fischer said in Berlin.... After a 12-year standoff, envoys remain divided over the pace of easing sanctions on Iran and the limits to be imposed on its nuclear program. A framework accord by March 31 would be a step toward ending Iran’s economic isolation, though another three months are envisaged to reach a detailed final agreement..... If a deal is reached, Iran could add more crude to an oversupplied oil market where prices have fallen more than 50 percent since June. Iran has stored excess crude on tankers for the past 2 1/2 years as restrictions deterred buyers, according to the International Energy Agency. The country now exports about 1 million barrels of crude per day, down from 2.5 million in mid-2012, IEA data show. ...

Iran Riches Coveted by Big Oil After Decades of Conflict  'By'Javier Blas 7:01 AM HKT  March 30, 2015 Bloomberg) -- Outside the boardroom of BP Plc’s headquarters on London’s swanky St. James’s Square, a display case houses the geological data from Masjid-i-Solaiman, Iran’s first oil well. The discovery of crude in 1908 laid the foundations for the company that would become British Petroleum and opened one of the richest opportunities that Western oil companies have ever enjoyed in the turbulent Middle East. Since then, the industry’s history in Iran is intertwined with CIA-backed coups, colonial exploitation and the anti-Western resentment surrounding the 1979 Islamic Revolution.... Foreign oil companies and Tehran would need to straighten out that turbulent past that stretches all the way to the Masjid-i-Solaiman oil well. The perception among the foreign oil companies is that the history would be put aside. Sultan, the former head of Kuwait Petroleum, said Iranian leaders would play along too.  “There is a new momentum in Iran, and that momentum also includes a desire to show success in the oil front,” he said....

Oil Speculators Focused on Glut Miss Surge as Bombs Hit Yemen  By 'Moming Zhou 7:01 AM HKT  March 30, 2015 (Bloomberg) -- Speculators were the least bullish on crude in two years before prices surged as Saudi Arabia and its allies bombed rebels in Yemen, threatening supply disruptions in the largest oil-producing region.  Hedge funds and other money managers cut their net-long position in West Texas Intermediate crude by 3.8 percent in the seven days ended March 24, U.S. Commodity Futures Trading Commission data show. Futures jumped more than 8 percent in the next two days before dropping 5 percent on Friday as shipping groups said there were no disruptions for now.

Refineries are set to boost rates further as seasonal maintenance ends. Plants have increased crude demand by an average 601,000 barrels a day in April and May over the past five years.... “The dollar and the rising refinery runs supported the market,” Phil Flynn, senior market analyst at the Price Futures Group in Chicago, said by phone March 27. “It doesn’t look like the market fundamentals have changed.”

Big Oil Pressured Scientists Over Fracking Wastewater's Link to Quakes - Energy firms tried to slow science inquiries blaming them for earthquakes in Oklahoma 'By'Benjamin Elginand Matthew Philips 7:00 PM HKT  March 30, 2015; In November 2013, Austin Holland, Oklahoma’s state seismologist, got a request that made him nervous. It was from David Boren, president of the University of Oklahoma, which houses the Oklahoma Geological Survey where Holland works. Boren, a former U.S. senator, asked Holland to his office for coffee with Harold Hamm, the billionaire founder of Continental Resources, one of Oklahoma’s largest oil and gas operators. Boren sits on the board of Continental, and Hamm is a big donor to the university, giving $20 million in 2011 for a new diabetes center. Says Holland: “It was just a little bit intimidating.”....... Today, as the number of earthquakes continues to soar, Holland has evolved in his position. He recently told Bloomberg that the vast majority of the increase in earthquakes is due to the injection of oil and gas wastewater. Yet he bristles at any suggestion that industry pressure slowed him from reaching that conclusion. Oklahoma has naturally occurring earthquakes, he says, and there have been large spikes of natural earthquakes in the past where no oil and gas development was occurring. It was proper, Holland says, to start with the hypothesis that the quakes were not man-made. “Science doesn’t operate in beliefs,” he says. “It operates in demonstrable facts.”

26 March 2015: Spike up on Yemen attacks. Short squeeze to nearly $60?

Moneyweek writes in its daily newsletter with note on talk of a short squeeze: Oil prices spiked higher yesterday, as Saudi Arabia launched air strikes on Yemen. The price of Brent went up to nearly $60 a barrel, while WTI (the US benchmark) rose to around $52.... As ever in the Middle East, the details are complicated (we’ll look into it in more detail in the next issue of MoneyWeek magazine). But keeping things simple, the Saudis and other Gulf Arab states are fighting Iran-backed rebels in Yemen, in an attempt to defend the Yemeni government. ... As the FT describes it, it’s basically a Sunni-Shia cold war, with Shia Iran on one side, and the largely Sunni Arab nations on the other.... Now, Yemen doesn’t matter much to the oil price. As various pundits on CNBC point out, Yemen isn’t a big oil supplier, and the trouble isn’t directly disrupting trade routes – yet. “This could help move oil prices partly, but we don’t see that this will disrupt actual oil supply,” said one South Korean oil expert......

17 March 2015: Strong dollar, US oil price dropping, Iran deal could open oil flood, OPEC's days could be numbered, Big Oil profits from the slump, rigs running hot offshore, Brent 53.44

Unprecedented Sugar Glut Expanding as World Output Soars  by Marvin Perez, Luzi Ann Javierand Gerson Freitas Jr 7:00 AM HKT  March 17, 2015 (Bloomberg) -- The world has never been so awash in sugar. Just as cane harvests expand in India and Thailand, farmers in Brazil, the world’s largest producer, are ramping up exports to take advantage of a tumble in the exchange rate that has swelled their profit margins. And crops that were hurt by drought last year have been revived by rain. Global output is set to exceed demand for a fifth straight year, leaving the biggest stockpiles on record, the International Sugar Organization said.  All of that sugar signals global prices, already down 50 percent in three years, are poised to fall further, cutting costs for buyers like Krispy Kreme Donuts Inc. and Mondelez International Inc., the maker of Cadbury chocolates and Oreos. New York sugar futures probably will slide 5.4 percent by July to 12.02 cents a pound, the lowest since January 2009, a Bloomberg survey of nine analysts showed.

Saudi Arabia Wooing Fired U.S. Shale Workers to ‘Join Our Team’ by Kelly Gilblom 8:00 AM HKT   March 17, 2015 (Bloomberg) -- Workers fired from U.S. shale fields after the collapse in oil prices could soon have a new boss: the nation some blame for driving that decline.... The state-owned Saudi Arabian Oil Co., also known as Saudi Aramco, is posting new job ads online aiming to snap up experts in extracting oil from shale as the country seeks to become a leader in that rapidly expanding effort. Tens of thousands of U.S. workers have been fired since November as oil prices plunged because of oversupplies, driven in part by an OPEC decision supported by Saudi Arabia.... Previously, Saudi Aramco didn’t need expertise in shale oil and natural gas exploration because it has large conventional oil reserves that don’t require expensive extra steps to develop, such as the hydraulic fracturing or horizontal drilling used in shale rock. As those highly productive fields age, however, development of shale resources, along with other hard-to-reach oil categorized as “unconventional,” may help Saudi Aramco maintain its dominance in the oil market, according to John Kingston, president of the McGraw Hill Financial Institute.

Bloomberg - Can Asia Survive a Strong Dollar?

Bloomberg - Oil Is Getting Slammed Again, and Falling to Its Lowest Level in Years

Bloomberg - Oil Prices May Have Further to Fall

Iran’s Nuclear Deal Could Open Oil Flood - WSJ

Bloomberg - Iran Can Add Million Barrels a Day of Oil Without Sanctions

Bloomberg - History Suggests OPEC's Days Could Be Numbered

Bloomberg - How Big Oil Is Profiting From the Slump

Bloomberg - Rigs Running Hot Offshore as Shale Scales Back

15 March 2015: Matt Ridley argues that the future is in fossil fuel efficiencies, says environmental movement helped crony capitalists advantage from subsidies in renewables schemes; US deployment of drilling rigs since 2011;  GE's energy division troubles, WSJ - effects of a weak euro are reverberating through economies around the world

In conversation with specialists: The structure of some biofuels sectors - often with quite concentrated ownership of biofuel processing facilities in a few hands - is noted by various observers. NGO influenced  green standards can also help to attract new margins or earnings for entrepreneurial processors adept at navigating regulatory settings.

The Saturday Essay: Fossil Fuels Will Save the World (Really) - There are problems with oil, gas and coal, but their benefits for people—and the planet—are beyond dispute By Matt Ridley March 13, 2015 5:33 p.m. ET; That fossil fuels are finite is a red herring. The Atlantic Ocean is finite, but that does not mean that you risk bumping into France if you row out of a harbor in Maine. The buffalo of the American West were infinite, in the sense that they could breed, yet they came close to extinction. It is an ironic truth that no nonrenewable resource has ever run dry, while renewable resources—whales, cod, forests, passenger pigeons—have frequently done so..... Nuclear’s problem is cost. In meeting the safety concerns of environmentalists, politicians and regulators added requirements for extra concrete, steel and pipework, and even more for extra lawyers, paperwork and time. The effect was to make nuclear plants into huge and lengthy boondoggles with no competition or experimentation to drive down costs. Nuclear is now able to compete with fossil fuels only when it is subsidized.... As for renewable energy, hydroelectric is the biggest and cheapest supplier, but it has the least capacity for expansion. Technologies that tap the energy of waves and tides remain unaffordable and impractical, and most experts think that this won’t change in a hurry. Geothermal is a minor player for now. And bioenergy—that is, wood, ethanol made from corn or sugar cane, or diesel made from palm oil—is proving an ecological disaster: It encourages deforestation and food-price hikes that cause devastation among the world’s poor, and per unit of energy produced, it creates even more carbon dioxide than coal.... Although the world has certainly warmed since the 19th century, the rate of warming has been slow and erratic. There has been no increase in the frequency or severity of storms or droughts, no acceleration of sea-level rise. Arctic sea ice has decreased, but Antarctic sea ice has increased. At the same time, scientists are agreed that the extra carbon dioxide in the air has contributed to an improvement in crop yields and a roughly 14% increase in the amount of all types of green vegetation on the planet since 1980.... That carbon-dioxide emissions should cause warming is not a new idea. In 1938, the British scientist Guy Callender thought that he could already detect warming as a result of carbon-dioxide emissions. He reckoned, however, that this was “likely to prove beneficial to mankind” by shifting northward the climate where cultivation was possible.... Patrick Michaels of the libertarian Cato Institute has written, since 2000, 14 peer-reviewed papers, published by 42 authors, many of whom are key contributors to the reports of the IPCC, have concluded that climate sensitivity is low because net feedbacks are modest. They arrive at this conclusion based on observed temperature changes, ocean-heat uptake and the balance between warming and cooling emissions (mainly sulfate aerosols). On average, they find sensitivity to be 40% lower than the models on which the IPCC relies.... If these conclusions are right, they would explain the failure of the Earth’s surface to warm nearly as fast as predicted over the past 35 years, a time when—despite carbon-dioxide levels rising faster than expected—the warming rate has never reached even two-tenths of a degree per decade and has slowed down to virtually nothing in the past 15 to 20 years. This is one reason the latest IPCC report did not give a “best estimate” of sensitivity and why it lowered its estimate of near-term warming.... We should encourage the switch from coal to gas in the generation of electricity, provide incentives for energy efficiency, get nuclear power back on track and keep developing solar power and electricity storage. We should also invest in research on ways to absorb carbon dioxide from the air, by fertilizing the ocean or fixing it through carbon capture and storage. Those measures all make sense. And there is every reason to promote open-ended research to find some unexpected new energy technology.... The one thing that will not work is the one thing that the environmental movement insists upon: subsidizing wealthy crony capitalists to build low-density, low-output, capital-intensive, land-hungry renewable energy schemes, while telling the poor to give up the dream of getting richer through fossil fuels.... Mr. Ridley is the author of “The Rational Optimist: How Prosperity Evolves” and a member of the British House of Lords.

Watch Four Years of Oil Drilling Collapse in Seconds By Tom Randall  Julian Burgess  and Blacki Migliozzi  | March 13, 2014; The crash in oil prices kicked off intense debate over when, and how, American producers would react. So far they’re still cranking out oil, but there are signs that a slowdown is looming. Chief among them: the record drop-off in drilling for new oil. The animation below shows the deployment of drilling rigs since 2011, culminating recently in a sudden collapse.

A Crude Awakening for General Electric - Its energy division will cut jobs and buy companies by Richard Clough 2:25 AM HKT  March 13, 2015; Not long ago, oil looked like a black gold mine for General Electric. The company known for toaster ovens and lightbulbs wrapped up a three-year, $10 billion buying spree in 2013 to bolster the growing oil and gas equipment unit that helped GE recover from the financial crisis. The company bulked up with the expectation that crude prices would remain at about $100 a barrel for years.... These days, with the price of oil 40 percent lower than six months ago, energy companies are buying less drilling and processing equipment. The industry plans to slash spending by $40 billion and cut 100,000 jobs globally. GE’s oil unit is cutting costs and laying off employees, too. In December the company warned investors that the oil and gas division in 2015 could face its first sales decline—of as much as 5 percent—in five years. “I am not being Pollyannaish in any way,” says Jeff Bornstein, GE’s chief financial officer. “It’s going to be a very tough orders year, and we’re going to see an impact.”...

The 10-Point. Gerard Baker, Editor in Chief of The Wall Street Journal, 13 March 2015. Two Sides of the Coin -  The effects of a weak euro are reverberating through economies around the world. Our story looks at how the tumbling euro is boosting optimism in corporate Europe while, at the same time, causing a headache for U.S. competitors. It remains unclear whether the weak euro, monetary stimulus and cheap energy prices will be enough to lift the eurozone out of its prolonged growth malaise. Past episodes of sharp devaluations in developed economies show the impact often boosts growth, but positive results aren’t guaranteed—a lesson relevant for Europe today. Meanwhile, the surging dollar and a global slowdown are likely to restrain the U.S. economy through at least the first half of the year, according to the Journal’s March survey of economic forecasters. 

14 March 2015: Brent slides to $54.67, Alan Greenspan: Oil Price Hasn’t Hit Bottom Yet

Crude Oil (Brent)  -2.41  54.67 -4.22% Closed:  6:00PM EDT; Reuters reports worries about US oil storage running out of space.

Alan Greenspan: Oil Price Hasn’t Hit Bottom Yet 9:13 PM HKT  March 13, 2015

Former Federal Reserve Chairman Alan Greenspan talks about the outlook for oil markets, the U.S. economy and the dollar. Greenspan speaks with Betty Liu on Bloomberg Television's "In the Loop." (Source: Bloomberg)

12 March 2015: Reuters reports on Ringgit at 6-year low, Brent rebounds and widens gap on US crude down on new record US oil inventories, Euro slumps to 12-year low - Brent 57.82

VEGOILS-Market factors to watch March 12 - RTRS  12-Mar-2015 08:23

 * Malaysian palm oil futures snapped a five-day losing streak on Wednesday as the ringgit slid to its weakest in six years, although gains were capped by palm's narrowing discount to rival soyoil.
 * U.S. wheat futures rose 1.2 percent to a one-week high on Wednesday, extending four-day gains to nearly 4 percent on short-covering and concerns about dry weather in U.S. growing regions.
 * Benchmark Brent oil jumped 2 percent on Wednesday, rebounding from a one-month low and widening its gap to U.S. crude, which closed slightly down after a new record high for oil inventories in the United States.
 * The euro slumped to a 12-year low against the dollar on Wednesday, driving European stocks higher as shares of big exporters gained, while U.S. stocks slipped on concern over when the Federal Reserve would begin to raise U.S. interest rates.

5 March 2015: Oil price will blow a hole in corporate accounting - Bloomberg; Brent 60.55 6:00PM EST

The Price of Oil Is About to Blow a Hole in Corporate Accounting 'By'Asjylyn Loder 8:00 AM AWST  March 4, 2015; (Bloomberg) -- There’s one place in the world where oil is still $95 a barrel. On paper. The U.S. Securities and Exchange Commission requires drillers to calculate the value of their oil reserves every year using average prices from the first trading days in each of the previous 12 months. Because oil didn’t start its freefall to about $45 till after the OPEC meeting in late November, companies in their latest regulatory filings used $95 a barrel to figure out how much oil they could profitably produce and what it’s worth. Of the 12 days that went into the fourth-quarter average, crude was above $90 a barrel on 10 of them.... So Continental Resources Inc., led by billionaire Harold Hamm, reported last month that the present value of its oil and gas operations increased 13 percent last year to $22.8 billion. For Devon Energy Corp., a pioneer of hydraulic fracturing, it jumped 31 percent to $27.9 billion.... This year tells a different story. The average price on the first trading days of January, February and March was $51.28 a barrel. That means a lot of pain -- and writedowns -- are in store when drillers’ first-quarter numbers are announced in April and May....

27 February 2015: Saudi oil price war paying off says BofA, Noble shares plunge after loss as accounting criticized

Crude Oil (Brent) 61.31

Saudis’ Oil Price War Is Paying Off by Grant Smithand Anthony Dipaola 8:01 AM AWST   February 27, 2015 (Bloomberg) -- Three months after Saudi Arabia made clear it was going to let oil prices keep tumbling, the strategy is showing signs of working.  U.S. drillers are idling rigs at a record pace, gutting investment plans and laying off thousands of workers.  Those steps highlight how the Saudi-led OPEC decision on Nov. 27 to maintain output levels and protect its market share is having the desired effect -- pushing prices down so far that they threaten to curb output in the U.S. and other non-OPEC countries. Saudi Arabia, the most powerful member of the Organization of Petroleum Exporting Countries, will maintain that tack when the group next meets in June, according to some of the world’s biggest banks.  The strategy “is working,” Francisco Blanch, head of commodities research at Bank of America Corp. in New York said by phone. “It is having the effect that we would expect, which is a decline in investment and ultimately supply, and somewhat higher demand. We think this change is for good.”

Noble Shares Plunge After Loss as Accounting Is Criticized by Yuriy Humberand Jonathan Burgos 5:52 PM AWST   February 26, 2015; (Bloomberg) -- Noble Group Ltd. shares fell to the lowest in almost two weeks after reporting a first quarterly loss in more than three years, following allegations of accounting malpractice that the company believes to be the work of a disgruntled ex-employee.

Noble took a $438 million writedown, including charges on assets scrutinized by the anonymous Iceberg Research as part of its allegations. Noble’s shares fell 5.2 percent to S$1.005 as of 11:02 a.m. in Singapore, after a suspension yesterday.... Asia’s largest commodity and energy trader by revenue swung to a $240 million fourth-quarter loss following tumbling commodity prices that hit revenues at its mining and mineral operations and required more capital for provisions, according to a statement yesterday.... The results come on the heels of Iceberg’s two reports critical of the Hong Kong-based company’s accounting practices. The initial report last week included allegations that Noble was overstating the value of associate companies including Yancoal Australia Ltd., sparking a decline of as much as 15 percent in the stock over two days....

24 February 2015: Bloomberg on oil prices yet to hit bottom on OPEC meeting and "dead cat bounce"; US banks hoard cash instead of lending, banks face scrutiny on rigging precious-metals markets; Crude Oil (Brent) 59.10

Why Oil Prices Have Not Yet Hit Bottom 6:10 AM AWST  February 24, 2015

Feb. 23 -- Crude fell, extending last week’s decline on speculation excess global supply will accumulate after U.S. drillers idled fewer oil rigs and Libya restarted a pipeline. Bloomberg's Isaac Arnsdorf reports on "Street Smart."

U.S. Banks Hoard $2 Trillion of Ultra-Safe Bonds 'By'Liz McCormickand Daniel Kruger 8:00 AM AWST  February 23, 2015 (Bloomberg) -- What do America’s banks know about the state of the U.S. economy that has them hoarding ultra-safe bonds? Growth is on a tear, hiring is the strongest in decades and households are the most upbeat since 2011. Yet banks such as Bank of America Corp. keep plowing their burgeoning deposits into U.S. government and related debt -- pushing the industry’s holdings past $2 trillion -- instead of lending it all out....

WSJ MARKETS ALERT: Big Banks Face Scrutiny Over Pricing of Metals - U.S. officials are investigating at least 10 major banks for possible rigging of precious-metals markets, even though European regulators dropped a similar probe after finding no evidence of wrongdoing, according to people close to the inquiries. Prosecutors in the Justice Department's antitrust division are scrutinizing the price-setting process for gold, silver, platinum and palladium in London, while the Commodity Futures Trading Commission has opened a civil investigation, these people said.

21 February 2015: Cheaper oil helps more spending Lunar New Year treats; Buffet dumping Exxon for Suncor, Phi9llips 66 and others; inventories are up and US running out of storage space while US oil rigs fall again; Why oil may fall more; Crude Oil (Brent) 60.22

Another Happy Consequence of Cheap Oil - Falling oil is leaving more money for Lunar New Year treats by 'By'Rina Chandranand Ailing Tan 10:05 AM AWST  February 18, 2015 Each year, Singapore's inflation has usually ticked up in the weeks before Chinese New Year, partly because of the higher prices of the beloved bak kwa, or barbecued pork, that is gifted and consumed in enormous quantities during the festival. While the delicacy is available all year round, long lines can be seen outside the most popular shops in the weeks before the holiday, which even impose limits on individual purchases. An exception to the inflation-bak kwa relation was 2014, when lower COE or vehicle-permit prices caused inflation to slow. This year, it's oil. The Bloomberg bak kwa index -- which tracks prices of the traditional barbecued pork at four of Singapore's most popular vendors -- shows prices are at a record high this year. Inflation though, is at a five-year low, as cheaper oil more than offsets pricier bak kwa. So there are even longer lines at the shops.

U.S. Stocks Rise to Records in Week on Greek Deal, Fed Rate Bets 'By'Callie Bost 6:15 AM AWST  February 21, 2015

Buffett Dumping Exxon Points Investors to Review Oil Bets 'By'Joe Carroll 1:40 AM AWST February 19, 2015 (Bloomberg) -- Warren Buffett’s decision to dump his stake in Exxon Mobil Corp. after oil prices plunged is pointing investors toward smaller, more nimble producers that will deliver higher returns during a market recovery.  Buffett’s Berkshire Hathaway Inc. sold its entire position in Exxon during the final three months of last year, according to a regulatory filing on Tuesday. The exit marks the end of a $3.7 billion investment in 2013 that at the time was Buffett’s biggest single bet since he bought into International Business Machines Corp. two years earlier.  Berkshire is focusing energy investments on more promising names, said Allen Good, an analyst at Morningstar Inc. in Chicago. The Omaha, Nebraska-based company added to its holdings in Canadian oil-sands miner Suncor Energy Inc. and crude refiner Phillips 66, according to the filing that detailed Buffett’s portfolio as of Dec. 31.

Another Big Reason to Think Oil Prices Aren't Going Up Soon - Inventories bursting at the seams 'By'Tom Randall 5:57 AM AWST   February 21, 2015 Oil just had its first weekly decline in a month, breaking a rally in crude prices. A bit of context: After what's happened over the last year, "rally" seems a bit of an overstatement.  One big factor that may be driving prices down this week: The U.S. is pumping so much oil it's running out of places to stash it.  Crude oil in storage in the U.S. has jumped to the highest levels in at least 80 years, according to a Bloomberg Industries analysis. The EIA this week reported that U.S. inventories rose 7.7 million barrels to 425.6 million. That's more than 20 percent higher than the five-year average.  The buildup of supply has been "colossal" and is responsible for oil prices falling this week, Thomas Finlon, director of Energy Analytics Group LLC, told Bloomberg News.

Get Ready for $10 Oil by A. Gary Shilling  Feb 16, 2015 6:00 PM EST At about $50 a barrel, crude oil prices are down by more than half from their June 2014 peak of $107. They may fall more, perhaps even as low as $10 to $20. Here’s why.

U.S. Oil Rigs Tumble Again, in Line With Twitter Estimates 'By'Tom Randall 2:13 AM AWST  February 21, 2015 U.S. oil and gas rigs continued to fall this week despite still-rising levels of production. Drillers idled 48 rigs (37 of which were oil rigs), dropping the number to 1,310 and marking the 11th consecutive decline, Baker Hughes reported on Friday. The total U.S. rig count is down 32 percent since October, an unprecedented retreat. The median forecast from a Bloomberg survey of ten #RigCountGuesses on Twitter was for a decline of 52.

Arctic Oil Drillers Face Tighter U.S. Rules to Stop Spills 'By'Mark Drajem 2:35 AM AWST  February 21, 2015 (Bloomberg) -- Royal Dutch Shell Plc and any oil drilling company that prospects in the Arctic Ocean must boost safety practices to prevent spills in the frigid and often hostile waters or mitigate the impact, U.S. regulators proposed Friday.  The Interior Department’s first Arctic-specific drilling rules respond to mishaps that plagued Shell’s efforts three years ago, by shortening the drilling season and requiring companies to have a backup rig nearby. Shell had already agreed to do much of what’s in the proposal as part of its 2012 exploration plan, which was suspended after the stumbles.

16 February 2015: Crude Oil Bears Betting on Supply Glut Miss Market Rally - Bloomberg, why the number of oil rigs may not matter anymore, more on the Goldman view; Brent 61.30

Crude Oil Bears Betting on Supply Glut Miss Market Rally (Bloomberg) -- Speculators cut bullish oil bets for a fourth week, missing a market rebound.  Hedge funds and other money managers decreased net-long positions in West Texas Intermediate crude by 9.1 percent since Jan. 13, U.S. Commodity Futures Trading Commission data show.  Futures climbed for a third week as companies including Apache Corp. and Total SA announced spending cuts. Bad weather kept tankers from loading in southern Iraq and Libya’s production decreased. Baker Hughes Inc. said rigs targeting oil in the U.S. dropped to the lowest in almost five years.... “U.S. production hasn’t started to decline yet, but it is probably going to go flat in June, maybe as early as May,” James Williams, an economist at WTRG Economics, an energy-research firm in London, Arkansas, said by phone Feb. 13. “We’ll have a decline in production in the second half.” ...
This Chart Shows Why the Number of Oil Rigs May Not Matter Anymore  - Rig history repeats itself by Tom Randall 5:31 AM AWST   February 14, 2015; The number of oil rigs drilling new wells in the U.S. has collapsed at an unprecedented rate. The weekly number has gathered a huge following as investors try to figure out when the crash in oil prices has reached its bottom. Strangely, the number may be irrelevant.... But production isn't slowing yet. In fact, last week the U.S. pumped more crude than at any time since the 1970s. “The headline U.S. oil rig count offers little insight into the outlook for U.S. oil production growth,” Goldman Sachs analyst Damien Courvalin wrote in a Feb. 10 report.
We've seen this before, in natural gas. The chart below shows a striking separation between natural gas production, in orange, and natural gas rigs, in blue. The massive increase in efficiency this represents helped fuel the U.S. fracking boom and has led to some of the world's lowest prices in natural gas, in gray....

Goldman: Here's Why Oil Crashed—and Why Lower Prices Are Here to Stay - Too. Much. Oil.  by Tom Randall 4:37 AM AWST  February 12, 2015; Goldman’s model is simple on its face, looking at just two variables over time: the price of oil and the value of U.S. stocks (as measured by the S&P 500). The idea is that the stock market is a pretty good indicator of economic demand. So when stocks move in tandem with oil prices, demand is in the driver’s seat. When the price of oil moves in the opposite direction of stocks, the shock is coming from supply.... It’s a bit more complicated than that—for the statistically inclined, Goldman uses a “vector autoregression with sign restrictions”—but you get the idea.... The big take-away: “[T]he decline in oil has been driven by an oversupplied global oil market,” wrote Goldman economist Sven Jari Stehn. As a result, “the new equilibrium price of oil will likely be much lower than over the past decade.”

11 February 2015: Goldman, Citi expect resumption of lower prices; Russia oil taxes, Germany-Greece tussle, White House concern on Climate Change impact more than Terror; Brent 56.43

Goldman: The Plunge in Rig Count Still Isn't Enough to Stop Oil From Tumbling 'By'Ann Koh 7:15 PM AWST February 11, 2015; (Bloomberg) -- The slump in oil prices may not be over, according to Goldman Sachs Group Inc.... The decline in the number of U.S. drilling rigs that’s helped crude futures in New York rebound 14 percent from this year’s low isn’t enough to reduce an oversupply, the U.S. bank said in a note dated Feb. 10. Lower prices are needed for American output to slow sufficiently to rebalance global markets, it said.... Goldman joins Citigroup Inc. and Vitol Group, the world’s biggest independent oil trader, in signaling prices may resume a decline amid unrelenting production growth. West Texas Intermediate crude is still down by half from last year’s peak as the U.S. pumps the most in three decades. While companies have idled rigs and cut spending, it will be some time before production is affected, according to the International Energy Agency....

Why Oil Could Fall to $20 a Barrel

Russia Faces Fight Over Billions in Oil Taxes on Crude Slump - Bloomberg Business

Germany Toughens Tone With Greece Before EU Meetings - Bloomberg Business

White House: Climate Change Has Bigger Impact Than Terror -; U.S. Estimates 20,000 Foreign Fighters Heading to Syria, Iraq - WSJ -

10 February 2015: IEA talks oil price rebound but Citi report lowers forecast for crude (says $20 on way after current head-fake surge, rebound to $75 and $54 for the year), survival skills, undervalued stocks bottoming talk, oil jobs start drying up....Crude Oil (Brent) 57.77

Crude Oil (Brent) 57.77

Oil-Price Rebound Predicted - In the latest sign that the seven-month selloff in crude-oil prices may be nearing a bottom, an energy watchdog said that a recovery seems "inevitable" and the glut that has driven down prices by more than 50% since June could start to ease as soon as the second half of the year.... A wave of spending cuts by oil producers and a sharp decline in the number of rigs drilling for crude in the U.S. likely will slow the nation's oil-output growth, spurring a rebound in prices, the International Energy Agency said in a report.

WSJ: The seven-month selloff in crude-oil prices may be nearing a bottom. We report that the International Energy Agency, which coordinates energy policy among industrialized countries, added its voice to the chorus ofexperts who say that the global glut is abating. A day earlier, OPEC also said demand for the group’s oil would rise in 2015, reversing an earlier estimate that predicted a decline. Our story examines the implications of the new forecasts. If sustained, rising oil prices would curb the boon consumers have reaped from lower gasoline prices. They could also create headwinds for a global economy already struggling with fragile growth in some corners. But a stabilization in oil prices would also spell relief across financial markets, which have been rocked by the recent plunge in prices. U.S. stocks rebounded last week amid hopes that the fall in oil prices might finally be over. However, prices fell again in Asian trade this morning, amid uncertainty over whether they will stabilize and weak Chinese inflation data.....

Citi: Oil Could Plunge to $20, and This Might Be 'the End of OPEC' ; This time is different... The recent surge in oil prices is just a "head-fake," and oil as cheap as $20 a barrel may soon be on the way, Citigroup said in a report on Monday as it lowered its forecast for crude....A pullback in production isn't likely until the third quarter, Morse said. In the meantime, West Texas Intermediate Crude, which currently trades at around $52 a barrel, could fall to the $20 range "for a while," according to the report. The U.S. shale-oil revolution has broken OPEC's ability to manipulate prices and maximize profits for oil-producing countries.....Citi reduced its annual forecast for Brent crude for the second time in 2015. Prices in the $45-$55 range are unsustainable and will trigger "disinvestment from oil" and a fourth-quarter rebound to $75 a barrel, according to the report. Prices this year will likely average $54 a barrel.....

Undervalued Energy Stock May Have Bottomed -

Oil Producers Stress Survival Skills - WSJ -

OPEC Sees More Demand for Its Oil, Less U.S. Output - WSJ -

Oil Jobs Start Drying Up - Bloomberg Business -

6 February 2015: WSJ articles "A Crude Awakening" on oil price dip on US 80-year high inventories, why cheaper oil may not lead to economic growth, analysts failing to see price fall; Brent holding up at $57.20, Saudis deepen Asia oil discount

A Crude Awakening by  The 10-Point from Gerard Baker, 5 February 2015

Falling oil prices were supposed to boost growth in a host of major oil-importing economies. But so far, at least, it doesn’t seem to be working that way. Our story looks at the economic consequences of tumbling oil prices. Some governments have already moved to use the opportunity of lower energy prices to shore up their flagging revenues. We note also that falling oil costs have pumped up deflation fears across Europe and Japan, adding to the risk that consumers and businesses will hold back on spending and investment. And one expert noted that the more oil prices lower inflation expectations in those countries, the less effective new central bank easy-money policies meant to spur growth will be. So far, political and economic headwinds appear to be offsetting any gains seeping in from cheaper energy costs. Meanwhile, oil prices posted their largest one-day drop in two months on Wednesday as data showed U.S. crude supplies near 80-year highs. And we examine the failure of Wall Street analysts to foresee the depth of the oil decline.  

Saudis Deepen Asia Oil Discount to a Record Low  'By' Mark Shenkand Anthony Dipaola

8:00 AM BNT   February 6, 2015 (Bloomberg) -- Saudi Arabia, the world’s largest crude exporter, cut prices for March oil sales to Asia, a sign that the desert kingdom is fighting for market share.
State-owned Saudi Arabian Oil Co. lowered its official selling price for Arab Light 90 cents to $2.30 a barrel less than Middle East benchmarks, the company said in an e-mailed statement Thursday. That’s the lowest in at least 14 years since Bloomberg began gathering data.....

Oil Prices Slump as Inventories Rise Near 80-Year Highs - Nymex Crude Posts Biggest One-Day Drop in Two Months By Nicole Friedman; Oil prices tumbled 8.7% on Wednesday, halting a robust four-day rally, after data showed that U.S. crude supplies had climbed to their highest level in about 80 years.... U.S. crude oil for March delivery sank $4.60, or 8.7%, to $48.45 a barrel on the New York Mercantile Exchange, the largest one-day decline since Nov. 28, 2014....

Why Cheaper Oil Doesn’t Always Lead to Economic Growth - Some Governments Raise Taxes, Keeping Pump Prices High; Lower Costs Also Stoke Deflation Fears  By Ian Talley in Washington and Brian Spegele in Beijing... Tumbling oil prices were supposed to boost growth in a host of major oil-importing economies. It isn’t necessarily working out that way....

Analysts Blow Calls on Oil Stocks - In Assessing Energy Companies, Many Failed to Foresee Depth of Crude’s Decline By Alexandra Scaggs In late November, as collapsing oil prices pummeled energy-company shares, a Raymond James & Associates analyst told investors that energy stocks were still a good bet....

4 February 2015: Oil price has been rebounding smartly (Brent now at $57.75), US producers' strike helps, BP and Exxon news, Rabobank sees limited impact of lower oil price on food industry, palm oil price has poor start in 2015


U.S. Oil Settles Up 7% at Highest Level of the Year - Oil prices soared Tuesday, providing investors some respite from a prolonged selloff that rattled financial markets, the energy sector and oil-dependent economies. The benchmark crude-oil contract on the New York Mercantile Exchange settled up 7% at $53.05 a barrel, the highest level since Dec. 31. Nymex crude is up 19% from its Jan. 28 low.

Bloomberg - U.S. Producers’ Strike Pushes Oil Prices Higher

Lower oil price to have ‘limited’ impact on food industry: Rabobank

Palm oil price has poor start for the year - Bloomberg,

Bloomberg - BP Fourth-Quarter Profit Falls on Slumping Crude Oil Prices

Bloomberg - Obama to Oil Industry: Drill There, Not Here

Bloomberg - Seven Reasons Cheap Oil Can't Stop Renewables Now

Bloomberg - I Survived the Global Crisis Only to Find It's the Recovery That Hurts: Australia

Exxon Could Be the Big Winner of the Oil Crash - Bloomberg Business,

Exxon’s Profit Drops 21% as Production Declines - WSJ,

Bloomberg - Bankers See $1 Trillion of Zombie Investments Stranded in the Oil Fields

28 January 2015: Views from an oil economist, Bloomberg reports hedge funds bet on further price fall, S&P cuts Russia to Junk, falling oil prices and wind and solar

Brent Crude this morning $49.60

In conversation with an oil economist from an oil and gas company (a few days ago), some views shared: oil price could drop further as inventories are building up and storage getting full with China turning back cargo. Saudi marginal cost of production is low around $5. It may take 3 years or so for oil prices to recover toward $100 and cash rich oil companies are seeking buying opportunities. The offer of sale of assets was apparent in the industry, even before the oil price collapse.

Bloomberg - Hedge Funds Bet Oil Will Fall Further

S&P Cuts Russia Credit Rating to Junk, Standard Poor's Ratings Services on Monday cut its credit rating on Russia to junk, deeming the country below investment grade for the first time in more than 10 years.  The one-notch downgrade of Russia's long-term foreign-currency rating was largely expected and priced into Russian asset prices.

Will falling oil prices kill wind and solar?

26 January 2015: Saudis worry most about falling demand, Saudi's King Abdullah died age 90, new King Salman to maintain oil policies, Alwaleed: no more $100+ oil; Brent now around $48

For Saudis, Falling Demand for Oil Is the Biggest Concern By Isaac Arnsdorf  Jan 26, 2015 11:55 AM GMT+0800 ; As the world’s oil producers wring their hands over a global glut that’s pushing down prices, evidence is mounting that Saudi Arabia is more concerned about shrinking demand.

The world’s largest exporter has chosen not to cut production, counting instead on lower prices to stimulate consumption, said Mohammad Al Sabban, an adviser to Saudi Arabia’s petroleum minister from 1988 to 2013. The Saudis are keeping an eye on investments in fuel efficiency and renewable energy, according to Francisco Blanch, Bank of America Corp.’s head of global commodity research.

Prince Alwaleed: We'll Never See Oil at $100-Plus Again;

Saudi Arabia’s King Salman to Maintain Oil Policies;

It's downhill for US after Saudi king dies: Experts by Tom DiChristopher

Friday, 23 Jan 2015 | 1:38 PM ET;

Saudi Arabia’s King Abdullah dies at 90 - Abdullah’s half-brother Salman pledges to continue predecessors’ policies after ascending the throne

King Abdullah of Saudi Arabia obituary - Monarch whose reign saw the spread of division, corruption and strife, and was saved only by ‘black gold’

by Madawi al-Rasheed, The Guardian, Thursday 22 January 2015 23.43 GMT

20 January 2015: US resists price intervention, Iran says it can withstand $25; contango, oil storage and offshore supertankers

Oil Drops Below $48 a Barrel as U.S. Resists Market Intervention  By Ben Sharples  Jan 20, 2015 8:53 AM GMT+0800; Oil traded below $48 a barrel as the U.S. signaled it won’t intervene in the market even as prices decline.... Futures fell as much as 3 percent in New York from the Jan. 16 settlement after floor trading was closed Monday for the Martin Luther King Jr. holiday. The U.S., the world’s biggest oil user, will let the market decide what happens, according to Amos Hochstein, the State Department’s energy envoy. Iran is strong enough to withstand a deeper slump even if it must sell at $25 a barrel, Oil Minister Bijan Namdar Zanganeh said....

World’s Largest Traders Use Offshore Supertankers to Store Oil - Companies Are Buying Oil Now to Sell Later When Prices Rise  By Sarah Kent And Georgi Kantchev; The supertanker TI Oceania was built to ferry vast quantities of oil across oceans, but for the next year it is expected to remain anchored off the coast of Singapore, storing millions of barrels of oil for Vitol SA, a giant trading house.... According to shipbrokers and analysts, the 3-million-barrel megaship—one of the largest in the world—is just one example of efforts by traders to turn a profit in the slumping global oil market....

Commodity Traders Exploit Crude Crash to Make Oil Storage King By Andy Hoffman and Rupert Rowling  Jan 14, 2015 1:00 PM GMT+0800 While the 28-company STOXX 600 Oil & Gas Index has fallen 3.7 percent this month, shares of Rotterdam-based Royal Vopak NV (VPK), the world’s largest independent storage tank operator, have surged 14 percent.... “We don’t know specifically about occupancy rates but we hear from companies that inquiries for tank storage are growing,” Ronald Backers, adviser for business intelligence at the Port of Rotterdam, said by phone Jan. 12. Europe’s largest port has crude oil tank storage of 85.6 million barrels.... Refiners, tankage firms and traders that invested in oil storage capacity are benefiting as the slump in crude to below $45 a barrel deepened what’s called contango, a relatively rare situation where prices for oil delivery later this year are higher than current prices. Vitol Group, Mercuria Energy Group Ltd. and Gunvor Group Ltd. are among the commodity houses poised to profit by storing oil and petroleum products to sell in the future....

18 January 2015: Brent ends the week at $50.17

14 January 2015: Bloomberg reports oil at "$40 and below" gaining traction in financial markets, 1980s OPEC and supply shock history; palm oil watchers worry about its biodiesel demand (16% of output) on its wide price premium as oil price sinks

Oil at $40, and Below, Gaining Traction on Wall Street By Grant Smith  Jan 14, 2015 8:01 AM GMT+0800; Brace for $40-a-barrel oil. The U.S. benchmark crude price, down more than $60 since June to below $45 yesterday, is on the way to this next threshold, said Societe Generale SA and Bank of America Corp. And Goldman Sachs Group Inc. says that West Texas Intermediate needs to remain near $40 during the first half to deter investment in new supplies that would add to the glut....

Arctic Explorers Retreat From Hostile Waters With Oil Prices Low By Mikael Holter  Jan 14, 2015 7:01 AM GMT+0800; When Statoil acquired the last of three licenses off Greenland’s west coast in January 2012, oil at more than $110 a barrel made exploring the iceberg-ridden waters an attractive proposition.....

Oil Collapse of 1986 Shows Rebound Could Be Years Away By Mark Shenk  Jan 14, 2015 8:00 AM GMT+0800; The last time excess supply caused a plunge in oil, it took almost five years for prices to recover......

Trees Under Water in Malaysia Fueling Rally in Palm Oil By Ranjeetha Pakiam  Jan 13, 2015 5:27 PM GMT+0800; .....The slump in crude-oil prices may erode the appeal of palm oil as a source of fuel. About 16 percent of the world crop is used to make biodiesel. Rising crude output and slowing demand sent prices down 52 percent in the past year in New York to $44.41 a barrel today, the lowest intraday price since 2009.... “When you’ve got an oil-price environment that I see, you can’t be bullish on any commodities,” said London-based Doug King, the chief investment officer at the Merchant Commodity Fund, which manages $260 million. Crude may drop below $40 as U.S. output compounds the surplus, he said....

13 January 2015: As oil slide continues, despondency on energy sector debt problems, US production shut down, across sector earnings cut gloom, fossil fuel riches naivety, Norway considers tapping reserves and call to revamp government spending. Canada tar sands output growth seen as robust.

The 10-Point: My Guide to The WSJ, 13 January 2015: The war of attrition among top oil-producing nations is far from over. Even as oil prices settled below $50 a barrel yesterday for the first time in nearly six years, our story looks at why oil-sands operators aren’t likely to shut off the tap any time soon. Yesterday major producer Canadian Natural Resources Ltd. became the latest to underscore the resilience of oil-sands growth. The company said lower oil prices will force it to trim investment on new projects and curtail its grow, but it still expects output to grow. “It’s not well understood just how robust the oil sands are. If you stopped expansion of the oil sands tomorrow, you would have no decline in the production base for decades,” the chief executive of one operator said. Meanwhile, oil prices continued to fall this morning after the United Arab Emirates’ oil minister said that OPEC would keep output unchanged, pushing the U.S. oil benchmark below the $45 a barrel mark. And energy-producing U.S. states are paring budget forecasts and planning spending cuts amid the plunge in prices.  

As Oil Slips Below $50, Canada Digs In for Long Haul By Chester Dawson  Jan. 12, 2015 9:04 p.m. ET Oil-Sands Operators, Seeing Long-Term Value, Aren’t Likely to Shut Off the Tap Any Time Soon; Canadian Natural will continue expanding production because it expects higher volume will cut operating expenses at its mainstay Horizon mine, currently at 37.13 Canadian dollars a barrel, by at least another 10 Canadian dollars a barrel.“A lot of the costs are fixed in nature,” Chief Financial Officer Corey Bieber said in an interview Monday. “You don’t necessarily increase your workforce in a corresponding ratio [with production]. If you can increase your denominator and manage your numerator effectively, you wind up with a lower cost per barrel.”

Brent Crude Settles Below $50 for First Time in Nearly Six Years; The global oil benchmark settled below $50 a barrel for the first time in nearly six years Monday as major banks continued to slash their forecasts, saying lower prices are needed to reduce global supplies.... Brent dropped $2.68, or 5.3%, to $47.43 a barrel on ICE Futures Europe, the lowest settlement since March 2009. After dropping in half in 2014, Brent oil prices are already down 17% for the year, as robust global supply growth continues to outpace demand....

source: 13 Jan 2015, 1.35pm Singapore

Headlines / snippets from

Shale Drillers Can Brag About Their Holdings. Investors Ask: How's Your Debt?  By Oliver Renick and Isaac Arnsdorf  Jan 13, 2015 3:38 AM GMT+0800  U.S. shale drillers may tout how much oil they have in the ground or how cheaply they can get it out. For stock investors, what matters most is debt. The worst performers among U.S. oil producers in a Bloomberg index owe about 5.7 times more than they earn, before certain deductions, compared with 1.7 times for companies that have taken less of a hit. Operations, such as where the companies drill or how much oil versus gas they pump, matter less.... “With oil prices below $50 and approaching $40, we’re in survivor mode,” Steven Rees, who helps oversee about $1 trillion as global head of equity strategy at JPMorgan Private Bank, said via phone. “The companies with the higher degrees of leverage have underperformed, and you don’t want to own those because there’s a fair amount of uncertainty as to whether they can repay that debt.” ....

America's Going to Lose the Oil Price War by Leonid Bershidsky Jan 12, 2015 12:0 PM EST  The financial debacle that has befallen Russia as the price of Brent crude dropped 50 percent in the last four months has overshadowed the one that potentially awaits the U.S. shale industry in 2015. It's time to heed it, because Saudi Arabia and other major Middle Eastern oil producers are unlikely to blink and cut output, and the price is now approaching a level where U.S. production will begin shutting down.....

Oil Whacks S&P 500 Earnings Growth By Lu Wang  Jan 13, 2015 5:41 AM GMT+0800   While stock investors wait for the benefits of cheaper oil to seep into the economy, all they can see lately is downside.  Forecasts for first-quarter profits in the Standard & Poor’s 500 Index have fallen by 6.4 percentage points from three months ago, the biggest decrease since 2009, according to more than 6,000 analyst estimates compiled by Bloomberg. Reductions spread across nine of 10 industry groups and energy companies saw the biggest cut.....

Goldman Sees Need for $40 Oil as OPEC Cut Forecast Abandoned By Chou Hui Hong  Jan 12, 2015 6:20 PM GMT+0800  Goldman Sachs said U.S. oil prices need to trade near $40 a barrel in the first half of this year to curb shale investments as it gave up on OPEC cutting output to balance the market.....

$50 Oil Kills Bonanza Dream That Made Greenlanders Millionaires By Peter Levring  Jan 12, 2015 7:00 AM GMT+0800 Greenland, an island that may be sitting on trillions of dollars of oil, has had to acknowledge that its dream of tapping into that wealth looks increasingly far-fetched. Back when oil was headed for $150 a barrel, Greenlanders girded for a production boom after inviting in some of the world’s biggest explorers, including Chevron Corp. and Exxon Mobil Corp. (XOM) Now, with Brent crude dipping below $50 last week, Deputy Prime Minister Andreas Uldum says Greenland’s hope of growing rich quickly on fossil fuels was “naïve.” ... ://

Oil Losses Force Norway to Consider Measures to Back Economy By Mikael Holter, Saleha Mohsin and Jonas Cho Walsgard  Jan 9, 2015 6:37 PM GMT+0800; Norway is considering tapping reserve funds to shield western Europe’s biggest oil producer from the worst slump in crude prices in more than half a decade.... Prime Minister Erna Solberg said the government is now “on alert” to respond to the rout. “If the economic situation requires it, we can react quickly,” she said yesterday at a conference in Oslo organized by Norway’s confederation of industry. Erna Solberg, Norway's Prime Minister, said her government is working on models that...

Hayman’s Bass Sees Oil Slump Disciplining Petro-State Norway By Saleha Mohsin  Jan 8, 2015 5:20 PM GMT+0800  Hayman Capital Management founder and chief investment officer Kyle Bass said, Norway... Read More The oil rout that has dragged down Norway’s krone since June will ultimately discipline a government that has relied too much on its petro-dollars to finance expenditure. That’s according to Kyle Bass, the founder and chief investment officer of Hayman Capital Management LP, who was in Oslo yesterday to attend a Skagen AS conference.... Norway “trades like an emerging market because of its dependence on crude,” Bass, one of the first hedge-fund managers to predict and make money on the U.S. subprime mortgage crisis, said in an interview. “A traditional cleansing is a good thing in the long run, it keeps government spending in check. Politicians are going to have to figure out how to cut back on the spending that they shouldn’t have been doing in the first place.” ....

12 Jan 2015: Palm oil on multi-month highs on supply - weather issues; Brent crude still languishes around $49.50

1 year price chart, source:

VEGOILS-Palm oil hits 6-month high on tight supply, monsoon woes - By Anuradha Raghu RTRS 08-Jan-2015 18:14 (Updates prices); Palm rises to highest since July 11 on concerns over floods Heavy rain warning over Peninsular Malaysia upped to "orange stage" KUALA LUMPUR, Jan 8 (Reuters) - Malaysian palm oil futures rose for a third day to hit a near six-month high on Thursday, on fears that supplies of the tropical oil will be further tightened by another round of monsoon rains in the No.2 grower.... "Supply in the near term is tight. We don't know what the damage will be for January," said a trader with a foreign commodities brokerage in Malaysia.... The trader added that until worries of floods ease, prices will likely remain propped up between 2,320 ringgit and 2,420 ringgit.....

Bloomberg - Russia Cut to One Step Above Junk by Fitch on Oil, Sanctions

Bloomberg - How OPEC Weaponized the Price of Oil Against U.S. Drillers

Former BP Gas Salesman Is Sorry About How Much Money He Made - Bloomberg View;

7 Jan 2015: Brent dips below $50

source: on 7 Jan 2015, 5pm, Singapore

7 Jan 2015: Prices extend drops, good for US and other economies, some soft commodities rally on weather, good times for asset investors over? Singapore (commodity) junk bond worries, Asian energy equities drop. Winners & losers of oil crash (Middle East a winner on reserves?).

source: on 7 Jan 2015, 906am, Singapore

Oil Extends Drop Below $48 as U.S. Stockpiles Seen Rising By Moming Zhou and Grant Smith  Jan 7, 2015 6:12 AM GMT+0800  Jan. 6 (Bloomberg) -- Oil extended losses below $48 a barrel amid speculation that U.S. inventories will expand, deepening a global supply glut that’s driven prices to a five-year low. Futures declined for a fourth day. Stockpiles in the world’s biggest oil-consuming country probably rose by 700,000 barrels last week, a Bloomberg News survey showed before a government report tomorrow....

As Oil Drops Below $50, Can There Be Too Much of a Good Thing? By Peter Coy and Matthew Philips    January 06, 2015  Oil falls below $50 a barrel on Jan. 5, and the Dow Jones Industrial Average plunges nearly 330 points. Seems like an open-and-shut case that the price plunge is getting to be a problem. People remember that in 1998, a sharp decline in the price of oil contributed to a Russian default that rocked the global financial system. Not quite. Cheaper oil is still creating more winners than losers. Far more people live in oil-importing countries than live in oil-exporting countries. The U.S., for one, remains a net importer. The well-publicized travails of U.S. shale oil producers are small compared with the gains by American consumers and businesses that are paying less for gasoline, diesel, jet fuel, petrochemicals, and the like. With fuel prices down, people are driving more miles and buying more cars and trucks....

Coffee With Sugar Rally on Brazil Concerns to Defy Oil Collapse By Luzi Ann Javier and Marvin G. Perez  Jan 7, 2015 2:39 AM GMT+0800  Defying the rout in oil prices, the coffee and sugar markets are rallying because of supply concerns in Brazil, the world’s top producer and exporter of the so-called soft commodities. Those raw materials helped prevent the Bloomberg Commodity Index of 22 energy, agriculture and metal prices from slumping to a 12-year low amid a collapse in crude and fuel. The broad gauge has tumbled to the lowest since March 2009, and a drop of an additional 1.4 percent will send the measure to a level last seen in November 2002. In 2014, arabica coffee soared 50 percent, the most among index components, amid the most-severe drought in decades. On ICE Futures U.S. in New York, coffee posted the biggest two-day rally since April, and an explosion in sugar trading triggered a circuit breaker on the exchange after the price surged as much as 5.6 percent. The sweetener jumped the most in 31 months. Rain in Brazil will be below average in the next six to 10 days, MDA Weather Services in Gaithersburg, Maryland, forecasts....

Palm Oil Output Seen Slumping 20% After Malaysian Floods By Ranjeetha Pakiam  Dec 31, 2014 6:31 PM GMT+0800  Palm oil output in Malaysia will decline this month and next as severe flooding disrupts harvesting in the largest exporter after Indonesia, exacerbating a seasonal drop in production, according to RHB Investment Bank Bhd. Output may contract by as much as 20 percent in December from 1.75 million metric tons in November, according to Alvin Tai, an analyst at the bank who’s covered the plantation industry for 11 years. There’ll be a significant reduction in harvesting, he said by phone in Kuala Lumpur....

Bill Gross Says the Good Times Are Over By Mary Childs  Jan 7, 2015 5:45 AM GMT+0800  Bill Gross, the former manager of the world’s largest bond fund, said prices for many assets will fall this year as record-low interest rates fail to restore sufficient economic growth. With global expansion still sputtering after years of interest rates near zero, investors will gradually seek alternatives to risky assets, Gross wrote today in an investment outlook for Janus Capital Group Inc. (JNS), where he runs the $1.2 billion Janus Global Unconstrained Bond Fund. “When the year is done, there will be minus signs in front of returns for many asset classes,” Gross, 70, wrote in the outlook. “The good times are over.” ...

Singapore Private Bankers Wake Up to Junk Bond Risks as Cracks Emerge By David Yong and Christopher Langner  Jan 6, 2015 11:19 AM GMT+0800; Demand for higher returns in Singapore bonds from the city’s swelling private banking industry has brought with it greater risks.... Junk-rated companies in Singapore must find funds to repay $2.1 billion of debt this year, up from $1.7 billion in 2014 and $1.1 billion in 2013, according to data compiled by Bloomberg. That accounts for 35 percent of all bonds maturing in Singapore in 2015. Wealthy clients of the island’s private banks snapped up 86 percent of the highest-yielding local bonds last year, the data show.... Halcyon Agri, which makes rubber for car tires, raised S$125 million in July selling 6.5 percent notes due 2019. Last month it sought the consent of bondholders to not comply with one of its interest-coverage ratios until the third quarter of 2015. Investors holding 82.8 percent indicated they’ll allow it, according to a Dec. 30 stock exchange filing.... Bonds of Swiber Holdings Ltd., an oil services company, are among the worst performing over the past month. Its S$130 million of 5.125 percent 2016 notes sold in May are trading at 90.5 percent of par from as high as 100.35 percent after issue.....

Asian Stocks Extend Drop, Led by Energy Companies on Oil Plunge By Jonathan Burgos  Jan 7, 2015 8:10 AM GMT+0800; Asian stocks fell, after yesterday sinking the most in nine months, as U.S. equities extended declines and the slump in crude oil deepened. The MSCI Asia Pacific Index (MXAP) declined 0.3 percent to 134.57 as of 9:03 a.m. in Tokyo, with energy companies dropping the most. The Asian gauge slumped 1.7 percent yesterday and the Standard & Poor’s 500 Index fell for a fifth day, extending the longest losing streak in 13 months.....

How the Bear Market in Crude Oil Has Polluted Non-Energy Stocks By Michael P. Regan  Jan 7, 2015 1:41 AM GMT+0800; Perusing the list of the biggest stock-market losers since the price of oil peaked in June yields some predictable results.  You have your large-cap energy companies like Transocean Ltd., Denbury Resources Inc., Nabors Industries Ltd., Noble Corp. and Halliburton Co., all down at least 45 percent.  Yet mixed in with all the obvious ugliness are some names that bring to mind the question asked of Billy Joel by those drinkers at the piano bar, or perhaps even some of the wedding guests who watched him walk down the aisle with Christie Brinkley: Man, what are you doing here? The big bets on high energy prices made by companies like Ford Motor Co. (down 13 percent since oil peaked on June 20) or Tesla Motors Inc. (down 10 percent) or Boeing Co. (down 3.9 percent) jump immediately to mind.... Not so obvious, unless you follow the stock closely, is the investment made by Fifth Third Bancorp (FITB), one of the regional lenders that tried to chase the fracking boom. (It’s down 12 percent since June 20.)  Fitch’s list of banks with high concentrations of loans to the industry is topped by BOK Financial Corp., which is down 13 percent since June 20.; Cullen/Frost Bankers Inc., down 16 percent; Hancock Holding Company, down 19 percent; Comerica Inc., down 14 percent; and Amergy Bank of Texas, a subsidiary of Zions Bancorp, which is down 13 percent.... Losses are even worse among the industrial companies that provide the services and sell the pipes, valves and assorted doodads used to pump oil and gas.... Morgan Stanley last month detailed stocks that stand to benefit from lower oil prices, such as airlines and consumer companies, and concluded cheaper fuel is a net benefit for the U.S. economy....

The Biggest Winners and Unluckiest Losers of the Oil Crash  By Isaac Arnsdorf - Dec 4, 2014 6:25 AM GMT+0800; Winner: Ship Owners - Charter rates for oil tankers surged as China booked more cargoes and fuel costs dropped. Loser: Corporate Borrowers - The selloff in energy companies' debt is also leading investors to pull out of other junk bonds, sending yields to the highest in more than a year. Loser: Keystone XL Pipeline  - Cheaper oil challenges the economics of developing Canada's oil sands. Some say the industry has already moved on. Winner: Saudi Arabia - The desert kingdom flexed its muscle at November's OPEC meeting by overruling members, showing that it's still the boss. It needs about $97.50 a barrel to balance its budget, but it's got $736 billion banked up. Winner: China - Now the world's second-biggest importer, China is taking advantage of slumping prices to build up strategic stockpiles. Cheaper fuel could reverse China's slowing economy and make it easier for the central bank to cut interest rates. Winner: Ed Morse of Citigroup - Citigroup's head of commodities research said early and often that surging U.S. oil production would drive down prices. His prediction of $75 a barrel went further than other analysts. Now it seems quaint.  Loser: BP - The British oil giant said Dec. 10 it would write down about $1 billion as it overhauls operations through next year....

6 Jan 2015: Brent drops toward $53, Euro under pressure, $20 cost for most of US, hedges help US producers, write downs loom, Australia mining towns gloom

source:, 6 Jan 2015, 8.45am Singapore

Note the 10 year price chart and the drop since recent peak versus price movement of big oil (example: Exxon Mobil Corp - 52 week high: 104.7600, Last close: 90.2900) and then note the cost of production of large oil corporations. Notably in most parts of the US, the average cost is $20 per barrel (see item immediately below dated 19 Dec). Other news links below.

Exxon Mobil Shows Why U.S. Oil Output Rises as Prices Plunge By Joe Carroll  Dec 19, 2014 5:40 AM GMT+0800; ... Existing wells remain profitable even as benchmark crude futures hover near the $55-a-barrel mark because operating costs going forward are usually $25 or less, Tom Petrie, chairman of Petrie Partners Inc., said in a Dec. 15 interview on the Bloomberg Surveillance television program.... That’s why prices that have tumbled 47 percent from this year’s peak on June 20 haven’t prompted any American oil producers to shut down wells, said Petrie, a U.S. Military Academy at West Point graduate who has advised Saudi Arabia, Alaska and the U.S. government on energy issues.... The average cost to operate an existing well in most parts of the U.S. “is about $20 a barrel,” Petrie said. “It might be $5 higher or it might be $5 lower, that’s the out-of-pocket costs that we’re talking about. Until you dip into that and start losing money on a cash basis day in, day out, you don’t think about shutting in” wells....

Revamped U.S. oil hedges may test OPEC's patience By Lucas Iberico Lozada Mon Jan 5, 2015 1:10am EST NEW YORK (Reuters) - As a war of nerves between U.S. shale producers and Gulf powerhouses intensifies, OPEC's biggest members are counting down the months until their upstart rivals lose the one thing shielding them from crashing oil prices - hedges. They may need much more patience than they reckon, however, because those hedges are a moving target. Rather than wait for their price insurance to run out, many companies are racing to revamp their policies, cashing in well-placed hedges to increase the number of future barrels hedged, according to industry consultants, bankers and analysts familiar with the deals. OPEC officials hope that once U.S. oil companies get fully exposed to the impact of an over 50 percent slide in crude prices since last June, they will have to drill fewer new wells, causing U.S. production growth to stall and putting a floor under oil prices now testing $50 a barrel.....

Oilfield Writedowns Loom as Market Collapse Guts Drilling Values By Joe Carroll  Jan 6, 2015 6:24 AM GMT+0800; Tumbling crude prices will trigger a flood of oilfield writedowns starting this month after industry returns slumped to a 16-year low, calling into question half a decade of exploration... With crude prices down more than 50 percent from their 2014 peak, fields as far-flung as Kazakhstan and Australia are no longer worth pumping, said a team of Citigroup Inc. analysts led by Alastair Syme. Companies on the hook for risky, high-cost projects that don’t make sense in a $50-a-barrel market include international titans such as Royal Dutch Shell Plc and small wildcatters like Sanchez Energy Corp....

Iran says Saudi Arabia should move to curb oil price fall

Exclusive: Mexico's light crude, shunned for U.S. shale, sails east

Saudis Seen Giving Asia Smaller Oil Discounts on Signs of Demand; Saudi Arabia will probably offer smaller discounts to ship crude to Asia amid speculation demand will increase after benchmark prices dropped almost 50 percent last year.... The world’s biggest oil exporter will announce February official selling prices to buyers in Asia in coming days, after offering its Arab Light grade at the biggest discount in at least 14 years the previous month. OPEC’s largest producer may narrow the discount, according to 12 of 15 traders and refiners in a Bloomberg News .....

Oil Rout Proving Worse Than Latest Norges Bank Forecast

One month after tumbling petroleum prices forced the central bank of western Europe’s biggest crude producer to cut interest rates, Governor Oeystein Olsen said oil’s subsequent slide has been even worse than expected.  “If oil prices stay at $55, at today’s level, then that’s clearly lower than what we based things on in our latest report,” Olsen said today in an interview after a speech in Oslo. “We will look at the development going forward now and come back with an evaluation of the oil price.....

Canada’s Richest Grain Family Betting on Rebound in Oil; A decade after expanding its grain business during a slump in prices, the Richardson family of Winnipeg, one of the richest in Canada, is making a similar bet on oil. With crude futures collapsing to the lowest in five years, the Richardson’s Tundra Oil & Gas unit last month agreed to buy 550 wells in Manitoba, part of a $410 million divestiture of Canadian assets by EOG Resources Inc. (EOG) Tundra’s biggest purchase ever will boost its output this year by one-third to 32,000 barrels a day......

From boom to bust in Australia's mining towns - BBC News;

Euro Weakens to 2006 Low on Greece as Stocks, Oil Decline

The euro weakened to an almost nine-year low as a debate on Greece’s membership of the currency union deepened a selloff driven by central-bank stimulus. Stocks fell with bonds, while oil slid to its lowest level since 2009. Europe’s shared currency declined 0.8 percent to $1.1905 at 7:21 a.m. in New York, after touching its weakest level since March 2006. Greek notes resumed losses after a rally on Jan. 2. The Stoxx Europe 600 Index lost 0.3 percent and Standard & Poor’s 500 Index futures los t.....

'Grexit' Is Back: A Greek Exit From the Euro Raises Fears of Fiscal Contagion  By Simon Kennedy  Jan 5, 2015 9:59 PM GMT+0800; Mario Draghi’s July 2012 pledge to do “whatever it takes” to keep the euro intact has kept speculators at bay for almost three years. Bond yields fell from Dublin to Athens, giving governments room to cut budgets and start revamping their economies.

S&P 500 Heads Toward 4-Day Drop as Energy Shares Slump With Oil By Michelle F. Davis and Callie Bost  Jan 6, 2015 5:29 AM GMT+0800; Crude oil’s slide below $50 sent the Standard & Poor’s 500 Index (SPX) to its biggest drop since October, as selling spread from the energy industry amid concern that cuts in capital spending will hurt earnings.


3 Jan 2015: USD at 11-year highs makes commodities more expensive

Stronger Dollar Crushes Arabica-Coffee, Raw-Sugar Markets - Arabica Coffee for Delivery in March Fell 3.3% to $1.6105 a Pound By Alexandra Wexler Updated Jan. 2, 2015 3:43 p.m. ET 

NEW YORK—A surging U.S. dollar weighed on the coffee and sugar markets on Friday, sending prices tumbling lower.... The WSJ Dollar Index, which tracks the greenback’s performance against 16 other currencies, jumped to an 11 ½ -year high on Friday. Dollar-denominated commodities become more expensive for buyers using other currencies when the greenback appreciates, which saps global demand.... The dollar’s rise to a near 10-year high against the Brazilian currency added to selling pressure for arabica coffee and sugar. Global production of both commodities is largely concentrated in Brazil, and the real’s weakness encouraged producers and exporters to sell their sugar and coffee abroad because they receive more back in their local currency for a crop sold abroad in U.S. dollars.

2 Jan 2015: Oil drops more, SWF vulture role?

source: 10.25pm Singapore

Oil Trades at 5 1/2-Year Low After Russia, Iraq Boost Supplies By Grant Smith  Jan 2, 2015 8:50 PM GMT+0800  Oil fell to the lowest since mid-2009 amid growing supply from Russia and Iraq and signs of manufacturing weakness in Europe and China. Futures headed for a sixth weekly loss in New York and London. Oil supplies in Iraq and Russia surged to the highest level in decades in December, according to data from both countries’ governments. Euro-area factory output expanded less than initially estimated in December. A manufacturing gauge in China, the world’s second-largest oil consumer, fell to the weakest level in 18 months, government data showed yesterday.

Euro Drops to 2010 Low as S&P 500 Futures, Dollar Advance By Richard Frost and Stephen Kirkland  Jan 2, 2015 9:48 PM GMT+0800  The euro weakened to a 4 1/2-year low, while Spanish and Italian bonds rose amid speculation the European Central Bank will boost stimulus. Standard & Poor’s 500 Index futures signaled the gauge will rebound and the dollar gained

Also, thanks to a reader for forwarding this article: Oil Prices: A True Black Swan or the Work of Vultures? by DR. KENT MOORS | published DECEMBER 18TH, 2014; First off, there were always indications on both the supply and demand side that matters were softening. Second, the OPEC non-decision on Thanksgiving to keep production levels unchanged was both predictable (from the Saudi perspective) and telegraphed in advance. Then, the orchestration of the talking heads commentary on the tube made the whole move “legitimate.”.... This is hardly something that emerged out of the blue. It’s also not the stuff of a true black swan.... Unless, of course, there is another motive at work and the black swan becomes a convenient cover.  Instead, this is what is really happening when it comes to oil prices.... When it comes to oil we are in a new age of massive short plays and swaps. The coordination of these moves is staggering, creating an impact that is immediate. Especially if there is a segue to important policy makers.... All of which has triggered a new development. SWFs have now become a player in the market, shorting the very product responsible for the funds to begin with.  In other words, some OPEC members are making money on both sides of the crude pricing curve.... Transacting the deals outside their own borders via SWFs, these countries are hedging the product in both directions. That means they are currently pushing the lower cost of crude forward by pairing shorts to actual oil consignments....

1 Jan 2015: Brent closed last year at $57.33

23 December 2014: OPEC pledges no production cuts, blames others for glut; China as emergency lender to Russia, Argentina, Venezuela.... OPEC is not driving prices, key concerns for 2015...

Saudis See Oil Recovery as U.A.E. Urges Non-OPEC Cuts By Mahmoud Habboush, Wael Mahdi and Anthony DiPaola  Dec 22, 2014 7:35 PM GMT+0800;  Saudi Arabia and the United Arab Emirates reiterated pledges to keep pumping the same amount of crude, blaming non-OPEC producers for the glut of oil that’s driven prices to the lowest in five years.... Suppliers from outside the Organization of Petroleum Exporting Countries should cut "irresponsible" output, U.A.E. Energy Minister Suhail Al Mazrouei said in Abu Dhabi yesterday. Even if non-OPEC producers were to offer cuts, OPEC probably wouldn’t follow suit, Saudi Oil Minister Ali Al-Naimi said. The two countries account for about 40 percent of OPEC supply....

Ruble Swap Shows China Challenging IMF as Emergency Lender By Ye Xie  Dec 23, 2014 12:06 PM GMT+0800; China is stepping up its role as the lender of last resort to some of the world’s most financially strapped countries.... Chinese officials signaled Saturday that they are willing to expand a $24 billion currency swap program to help Russia weather the worst economic crisis since the 1998 default. China has provided $2.3 billion in funds to Argentina since October as part of a currency swap, and last month it lent $4 billion to Venezuela, whose reserves cover just two years of debt payments.... By lending to nations shut out of overseas capital markets, Chinese President Xi Jinping is bolstering the country’s influence in the global economy and cutting into the International Monetary Fund’s status as the go-to financier for governments in financial distress. While the IMF tends to demand reforms aimed at stabilizing a country’s economy in exchange for loans, analysts speculate that China’s terms are more focused on securing its interests in the resource-rich countries...

What’s Next for World Oil as Lower Prices Extend Into ‘15  By Isaac Arnsdorf  Dec 23, 2014 1:00 PM GMT+0800; The oil price decline of 2014 upended the geopolitical chessboard. Worth watching in 2015 will be who can recover and dominate play -- OPEC, Vladimir Putin or U.S. shale drillers.

Oil’s international benchmark price dropped as much as 49 percent in 2014. Those looking for a quick rebound may be disappointed, as world consumption growth slowed to the least since 2009, U.S. companies pumped more than they have since the 1980s and a price war broke out among members of the Organization of Petroleum Exporting Countries.... “It’s a turning point in the way people perceive OPEC, that this so-called cartel is not really driving prices,” said Jeff Colgan, a professor at Brown University’s Watson Institute for International Studies who researches the geopolitics of energy. “The real story is going to be about the fracking industry. How much pain can North American producers take?” Here are five concerns about oil markets for 2015............

Billionaire Shale Pioneer Cuts Spending 41% on Oil Crash  By Bradley Olson and Joe Carroll  Dec 23, 2014 8:38 AM GMT+0800; Billionaire Harold Hamm, whose early adoption of shale drilling in North Dakota helped usher in a U.S. energy renaissance, plans to cut spending by 41 percent at his company after the plunge in oil prices.... Continental Resources Inc. and other U.S. producers can adjust quickly to the crude collapse and will be able to withstand the downturn better than many producing countries, which face economic “ruin,” Hamm said in an interview.... “The oil and gas industry has lowered the cost of gasoline to consumers in this country,” Hamm, chairman and chief executive officer of Continental, said yesterday. “It’s been good for America, this increase in supplies that we have here. We don’t want to see it all go for naught.”....

17 December 2014 (evening): Ruble troubles, Russia and OPEC to maintain supply, US talks exports, US cuts GDP link with oil, Petrobras cash crunch, Norway krone drops, palm oil drops with oil slide

Ruble Trouble by The 10-Point: My Guide to The WSJ, 17 Dec 2014; Russia’s beleaguered currency was volatile in early trading today after the country’s Finance Ministry announced plans to begin selling its excess foreign-exchange holdings. We report that the plunging ruble is reawakening fears of the kind of financial crisis Vladimir Putin  has sought to leave behind. Moscow residents have rushed to buy big-ticket items and swapped rubles for dollars and euros, signaling a new feeling of vulnerability among Russians and a fresh challenge to their leader. We also find that global banks are curtailing the flow of cash to Russian entities, and the ruble’s selloff has deepened concerns for European companies exposed to the Russian market. A Pimco bond fund was also among the victims, after stumbling over a large bet on bonds issued by Russian corporations. Meanwhile, selling eased in Asia this morning after falling oil prices and worries about tighter U.S. monetary policy battered emerging markets earlier in the week. Investors are now looking to the U.S. Federal Reserve’s policy statement for cues.

Oil Trades Near 5-Year Low as Russia Echoes OPEC Output Policy  By Heesu Lee and Rupert Rowling  Dec 17, 2014 8:26 PM GMT+0800; Output from Russia, the world’s largest crude producer, will be similar to this year’s...Oil traded near a five-year low in New York as Russia reiterated that it will keep crude production steady next year, echoing OPEC’s strategy of refraining from curbing supply to tackle a global surplus.... Futures fell as much as 2.4 percent after sliding below $54 a barrel yesterday for the first time since May 2009. Output from Russia, the world’s largest crude producer, will be similar to this year’s 10.6 million barrels a day, according to Energy Minister Alexander Novak. Iran is said to be offering shipments to Asia at the deepest discount in at least 14 years, according to four people with knowledge of the decision. Iraq may revisit its oil-production plans, the country’s Deputy Prime Minister said today in London....

U.S. Talking Oil Exports Just When World Needs It Least By Dan Murtaugh and Lynn Doan  Dec 17, 2014 12:09 PM GMT+0800 ; The U.S. Congress is talking about allowing unfettered oil exports for the first time in almost four decades. Its timing couldn’t be worse.... There’s space in the global market for 1 million to 1.5 million barrels a day of U.S. crude if the ban vanishes, Energy Information Administration chief Adam Sieminski told a congressional subcommittee at a Dec. 11 hearing. That would be less than 2 percent of worldwide demand. With prices sliding amid a glut, the figure is bound to be even smaller, according to consultants including Wood Mackenzie Ltd...

Bloomberg slideshow - America is Shaking off its Addiction to Oil:

Petrobras Said to Cut Exploration Spending in Cash Crunch  By Sabrina Valle and Leonardo Silva  Dec 17, 2014 12:44 AM GMT+0800 ; Petroleo Brasileiro SA (PETR4), the biggest oil producer in ultra-deep waters, is curbing refining and exploration spending in response to the collapse in prices and difficulties tapping debt markets during a corruption probe, said two people with direct knowledge of the matter.... The state-run oil company known as Petrobras plans to freeze investments in the Premium I and Premium II refineries in northeastern Brazil and sell assets to protect its cash position, said one of the people. The exploration cuts will focus on projects that are behind schedule, they said. Both asked not to be named because the information isn’t public....

Oil Shocks Norway’s Krone as Swedish Currency Rises to Parity By Lucy Meakin  Dec 17, 2014 12:33 AM GMT+0800; As the smaller economy of the two Nordic nations, Norwegians have long taken pride in their currency’s pre-eminence over the Swedish counterpart. Not to mention the cheap shopping across the border it has allowed.... That all came to an end today as the currency joined the Russian ruble in oil-induced tumble. The krone, likened to an emerging market currency, declined to parity with the Swedish krona for the first time since 2000....

Malaysian palm oil slides for 3rd-straight day on crude oil slide Wednesday, 17 December 2014

KUALA LUMPUR: Malaysian palm oil futures fell for a third day on Tuesday and slide to their weakest in nearly two weeks, as crude deepened its sharp drop and volatility in emerging Asian markets turned investors wary.... Brent crude fell as low as $59.02, its weakest level since May 2009, while U.S. crude was down $1.60 at $54.31 a barrel, extending a 6-month selloff as slowing Chinese factory activity and weakening emerging-market currencies added to concerns about demand.   
Traders said while the palm market has been supported over the past weeks on hopes that weakening production will help shrink inventories, this week's turmoil across equity markets and steep losses in crude could trigger more selling... The benchmark March contract on the Bursa Malaysia Derivatives Exchange fell to a Dec. 3 low of 2,114 ringgit in afternoon trade, before settling down 2.4 percent at 2,120 ringgit ($608) per tonne by Tuesday's close...."

17 December 2014 (morning): Brent below $60, Russia, US-China role reversal, Roubini's macro themes for 2015

source:, 17 Dec 2014, 9am Singapore
Note: At one point, yesterday evening, we note 3.5% fall for Brent on the day

Here's Why the Russian Ruble Is Collapsing; The Russian economy has been in trouble for months, but last night, things got absurdly bad. The value of the ruble dropped as much as 19 percent in the last 24 hours, the worst single-day drop for the ruble in 16 years. Now Russians are reportedly bum-rushing malls to swap cash for washing machines, TVs, or laptops—anything that seems as if it might hold value better than paper money, whose worth is evaporating in real time. The political and economic forces sending Russia into a downward spiral are complex. Here's what you need to know.

Russia's economy has been hurt by two big things: the falling price of oil and economic sanctions. (Remember Crimea?) The oil and gas industry generates about half of Russia's revenue, so when a combination of the shale boom in the U.S. and weaker demand worldwide pushed the price from $110 per barrel earlier this year to $60, Russia got hammered. The sanctions imposed by Europe and the U.S., designed to punish Russia's companies for President Vladimir Putin's actions in Ukraine, have hurt, too.

U.S.-China Economic Role Reversal Roils Emerging Markets  By Simon Kennedy  Dec 17, 2014 1:44 AM GMT+0800; The world economy’s two biggest tectonic plates are shifting, setting off the frictions increasingly evident in financial markets and global capitals.... The U.S. is accelerating and China is cooling, marking a reversal of trends that followed the financial crisis. As a result, oil is slumping as American supply rises and Chinese demand falls; capital is fleeing emerging markets; the dollar is surging and the influence of the BRICs is on the wane...

Asia Isn't Ready for a China Crash by William Pesek  Dec 16, 2014 8:00 PM EST; "As China's first full year of rebalancing draws to close, how has President Xi Jinping done? Reasonably well, it seems. Growth appears to be moderating gently, stocks continue to soar and most economists still foresee a soft landing rather than market-shaking meltdown for the world’s second-largest economy.

Next year, however, Xi's team will have to get to the hard stuff: taming an opaque, unwieldy financial system. My question isn’t so much whether China will or won’t crash. It’s whether the rest of Asia is ready for the possibility of 5 percent or even 4 percent Chinese growth, as predicted by pundits like Larry Summers and Marc Faber. It’s almost certainly not.... Historically, hedge funds betting against China haven't done very well. This week, in fact, the government is expected to revise 2013 GDP figures upward by as much as $275 billion, which on paper should help meet its target of 7.5 percent growth for the year.... For anyone who thinks China is operating even close to that number, though, I have two words: iron ore. Even more than the precipitous drop in oil, the halving of prices for these pivotal rocks and minerals -- as well as a 44 percent plunge in oil and tumble in coal and other commodities -- suggests that China may be braking rapidly....

The Year Ahead: Roubini's Top 10 Macro Themes; We recently laid out the top 10 themes that we believe will define the global economy in 2015, exploring how possible scenarios will unfold and the potential risks to our baseline views. Key themes to watch for include:

1.Global Growth Is Battered and Bruised, but Unbroken (Thanks to the U.S.)
2.China Is Slowing Far Faster Than Consensus and Heading for a Bumpy Landing
3.Europe Faces a Challenging Year, With Politics a Key Risk
4.Oil (and Commodity) Glut: Oil Weak, Metals Worse—Producers Hit, but Good for Growth and Inflation
5.DM Inflation: 'Still No Bark' as Disinflation Reigns

16 December 2014: UAE sees OPEC output hold even at $40. Commodity contagion, currencies and emerging markets hit in echoes of 1998 crisis? Petrobras scandal, deals and capex cuts in the oil rout.

source: on 16 Dec 2014, 1015am, Singapore

Bloomberg - U.A.E. Sees OPEC Output Unchanged Even If Oil Drops to $40

Bloomberg - Oil Storm Has Texas Wildcat Veterans Warning Bakken Rookies to Take Cover

Russian Central Bank Raises Key Rate to 17% from 10.5%; Russia's Central Bank, in a bid to stem a sharp decline in the ruble, raised its key interest rate to 17% from 10.5%. Earlier Monday, Russia's currency lost more than one-tenth of its value, collapsing to a record low and raising fears that the Kremlin wouldn't be able to stop the slide as the price for oil, its main export, also continued to fall.

Bloomberg - 1998 Comes Calling in Currency and Credit Plunges From Russia to Venezuela

Bloomberg - Rupiah at ’98 Low Defies Logic for Best Forecaster: Asean Credit

Petrobras- Coming down with a bump, More problems are revealed at Brazil's oil giant; Dec 14th 2014  | SÃO PAULO | Business and finance; "NOT long ago Petrobras was the pride of Brazil. It was steward of the biggest offshore oil discovery so far this century and the subject of a record-breaking $70-billion public share offering in 2010. It had become the technological leader among oil giants at finding new reserves. But now the state-controlled behemoth is sinking into a hole as fathomless as its deep-sea oil wells. Every day brings news that ranges from bad to dreadful, much of it the result of a 10 billion reais ($3.7 billion) bribery scheme that was recently unearthed by Brazil’s federal police, aided by the press...."

Repsol Readies Bid for Talisman Energy; Repsol is preparing an $8.3 billion bid for Canada's struggling Talisman Energy, a takeover that would roughly double the Spanish company's oil output right away and boost its potential for further expansion. The Madrid company's board met Monday evening and unanimously approved the offer, which has an enterprise value of $13 billion including debt. Repsol said it was preparing to offer $8 a share for Talisman, a significant premium over the Calgary-based company's closing price Friday.

Share price chart comparison for Exxon, Petrobras, SembCorp Marine (among other things selling oil rigs to Petrobras and others), and Sapura Kencana (key Malaysia oil & gas sector services provider, a sector now facing capex cuts by Petronas)
source: on 16 Dec 2014, 1015am, Singapore
note: Start date of chart is in May 2012. 30 October 2014 is marked, being approximate date of Khor Reports' last review of these relative equity prices

13 December 2014: Brent $61.85 shakes equity and credit markets. Shale oil's market disruptive effect and 1930s history

Brent at $61.85. From scanning Bloomberg news on this you can see demand destruction worries hitting equities, bond market shifting to safety, China stockpiles expected as many.VLCCs head it's way and chartists seeking a bottom as the price plunge breaches many indicators. Demand forecasts were also cut. ouch.

The Relentless Production of Shale Oil Is Breaking OPEC’s Neck By Peter Coy and Matthew Philips    December 11, 2014; "The world’s biggest oil companies faced ruin in the summer of 1931. Crude prices had plummeted. Wildcatters were selling oil from the bonanza East Texas field for a nickel a barrel, cheaper than a bowl of chili. On Aug. 17, Governor Ross Sterling declared a state of insurrection in four counties and sent 1,100 National Guard troops to shut down the fields and bring order to the market. A month later the Railroad Commission of Texas handed out strict production quotas.... That heavy-handed intervention in the free market was remarkable enough. Even more remarkable was who pulled it off. The person in charge of shutting down the wildcatters, National Guard Brigadier General Jacob Wolters, was the general counsel of Texas Co., an ancestor of Chevron (CVX). And the Texas governor who ordered Wolters in was a past president of Humble Oil and Refining, a forerunner of ExxonMobil (XOM). Big Oil played hardball in those days.... History is repeating itself, with a twist. The stressed-out giants of today are Saudi Arabia and its fellows in the Organization of the Petroleum Exporting Countries. The descendants of the 1930s wildcatters are today’s producers of oil from shale, who are driving down the world price of crude by flooding the market with millions of barrels of new oil each day...."

12 December 2014: In a parallel to the oil & gas market share grab, iron ore biggies raise output to shutter less competitive miners?

Roubini Global Sees Sub-$60 Iron Ore Amid Massive Surplus By Jasmine Ng  Dec 11, 2014 8:03 PM GMT+0800; "Iron ore may drop to less than $60 a metric ton next year as the largest mining companies press on with raising supply, deepening a glut just as demand growth in China falters, according to Roubini Global Economics LLC.... The commodity will average $65 a ton in 2015, with weaker prices in the first half before a recovery as some higher-cost capacity is closed, Director of Commodities Helen Henton said in an interview. While producers won’t fare well in an environment of falling prices, it does make sense for low-cost suppliers to keep expanding in the expectation that less-competitive mines will be shuttered.... The biggest producers including BHP Billiton Ltd. (BHP), Rio Tinto Group and Vale SA invested billions of dollars to increase output, pushing the market into oversupply and spurring a 48 percent tumble in prices this year. A slowing Chinese economy may reduce consumption growth in iron ore, used to make steel for buildings and appliances. The raw material will extend losses as supply growth outpaces demand, according to JPMorgan Chase & Co., which this week cut forecasts through 2017..."

11 December 2014: Oil plunge contagion and banks trading revenue? Investors seeking bottom. Biodiesel demand worry.

source: 10.26am Singapore time

U.S. Getting Rid of Oil Addiction as Price Plummets in Glut By Lynn Doan and Dan Murtaugh  Dec 11, 2014 8:18 PM GMT+0800 ; "The U.S. is producing the most oil in 31 years, economic growth is picking up and crude prices are plunging. So why is Americans’ use of petroleum waning? As the U.S. moves closer and closer to energy independence, greater fuel efficiency, changing demographics and an increase in renewables are altering the dynamic that in the past would have seen demand for gasoline climbing. Gross domestic product, the value of all goods and services produced in the U.S., grew at a 2.4 percent pace in the third quarter from the year-earlier period. Oil consumption fell 0.3 percent, government data show... “Oil demand and GDP growth used to go hand in hand,” Christopher Knittel, a professor of applied economics at Massachusetts Institute of Technology’s Sloan School of Management, said by phone on Dec. 8 from Cambridge, Massachusetts. “Now, they’re in some ways almost independent of each other because of investments in fuel economy that tended to break the link.” ...

Bloomberg - Oil Plunge Rips Through Markets as Investors Seek Bottom

Bloomberg - JPMorgan Sees ‘High Teens’ Decline in Trading Revenue

CIMB - Plantation update (MPOB stats for Nov) - Biodiesel demand risk; released today this notes that "we are concerned about biodiesel demand risk due to the sharp fall in crude oil prices, which makes biodiesel conversion uneconomical"

Roubini Global Economics Forecasts China’s 2016 Growth at 5.4%; 10 Dec 2014; Following the recent release of a two-part China Trip Report by Dr. Nouriel Roubini, Don Hanna (Managing Director, Asia) and Daili Wang (Senior Economist) comes our latest China Outlook, in which we have further revised down our 2016 growth forecast for the economy to 5.4%. Lower investment (especially in residential construction), weakening domestic demand and the implementation of economic reforms will be key headwinds in the coming years, with the resulting friction taking a toll on GDP growth, Chinese equities and commodity prices.

Oil Prices Fall as U.S. Inventories Show Surprise Gain; 10 Dec 2014; Oil prices took another dive Wednesday on a U.S. government report showing a surprise increase in the country's crude stockpiles. The weekly reading on U.S. oil supplies signals a potential deepening of a global glut that has sent crude-oil prices plunging more than 40% in nearly six months.  The benchmark U.S. oil price recently was 4% lower at $61.22 a barrel on the New York Mercantile Exchange. U.S. crude supplies rose by 1.5 million barrels in the week ended Dec. 5, according to the U.S. Energy Information Administration. Analysts expected supplies to fall by 2.7 million barrels.

Yesterday, before last night's rout:

(BN) Energy Insiders See ‘Fire Sale,’ Buy Most Shares Since 2012; The rout in energy stocks reminds Tim Rochford of something else he’s seen in Texas. “What happened is almost like a herd of cattle, one cow turns left, all the cows follow it and it’s a stampede,” said the 68-year-old co-founder of Midland-based Ring Energy Inc., one of 118 industry executives who bought shares of their own companies in the last month amid the worst losses since 2008. “This is an absolute fire sale,” he said. “It’s an overreaction and the result is it’s oversold.” ...

(BN) Oil’s Slump Puts Canada Acquisitions Streak on Ice; The rapid decline in global oil prices is setting the stage for a long dance between buyers and sellers in Canada’s energy industry.

The rout put a chill on an oil and gas acquisition market that saw about $39 billion of deals this year and is leading sellers like Penn West Petroleum Ltd. (PWT) to consider waiting for a rebound. Highly indebted Canadian oil and natural gas producers may not be able to afford that luxury, and suiters such as Crescent Point Energy Corp. (CPG) Chief Executive Off ...

Oil Drop Pressures Crude-Producing Countries, Energy Firms - Oil Prices Extend Losses, Hitting Five-Year Lows  By Nicole Friedman; Oil prices dropped sharply Monday to fresh five-year lows, putting additional pressure on countries that rely on oil revenue and on energy companies that are trying to calibrate their investment plans.

From The Economist: The new economics of oil: Sheikhs v shale; The economics of oil have changed. Some businesses will go bust, but the market will be healthier; Dec 6th 2014  | From the print edition; "THE official charter of OPEC states that the group’s goal is “the stabilisation of prices in international oil markets”. It has not been doing a very good job. In June the price of a barrel of oil, then almost $115, began to slide; it now stands close to $70. This near-40% plunge is thanks partly to the sluggish world economy, which is consuming less oil than markets had anticipated, and partly to OPEC itself, which has produced more than markets expected. But the main culprits are the oilmen of North Dakota and Texas. Over the past four years, as the price hovered around $110 a barrel, they have set about extracting oil from shale formations previously considered unviable. Their manic drilling—they have completed perhaps 20,000 new wells since 2010, more than ten times Saudi Arabia’s tally—has boosted America’s oil production by a third, to nearly 9m barrels a day (b/d). That is just 1m b/d short of Saudi Arabia’s output. The contest between the shalemen and the sheikhs has tipped the world from a shortage of oil to a surplus...."

8 December 2014: Lower oil prices to boost global growth: Oil investors to lose trillions? US drillers argue for exports.

Many of the world’s top policy makers are betting that plummeting oil prices will lead to a boost in global growth. Our story looks at why prices are dipping and how they will affect the world economy. Falling energy prices are clearly hurting major oil exporters that rely heavily on petroleum revenues. But for major oil importers such as Japan, Italy and Germany, the International Monetary Fund calculates that the price plunge since June could add nearly a percentage point of gross domestic product to their economies. “There will be winners and losers, but on a net-net basis, it’s good news for the global economy,” IMF Managing Director Christine Lagarde told me at the Journal’s CEO Council annual meeting last week. Whether the recent tumble is driven more by a supply glut or a drop in demand could determine the direction of the global economy in the coming year, we note. But while much of the world will benefit from cheaper oil, there is also the risk of a negative shock—as producers’ problems could spill over into financial instability. And revised figures overnight from Japan that showed a sharper drop in output in the third quarter than previously reported underscore the depth of the hole in which some countries find themselves before they see the benefits of lower oil costs..... Falling Oil Prices Spur New Bets on Global Economic Growth - Policy Makers Shrug Off Concerns That Tumbling Oil Costs Are Harbinger of Slowdown By Ian Talley;

Bloomberg - Oil Investors at Brink of Losing Trillions of Dollars in Assets. Gore: It's That Road Runner Moment

Bloomberg - Oil Drop Gives U.S. Drillers Argument to End Export Ban

5 December 2014: price war, US shale boom, sub-$50 at well head

Oil Speculators (Mostly) Saw the Massive Price Drop Coming By Matthew Philips      December 03, 2014; "Since June, speculators have dumped the equivalent of 500 million barrels of oil onto the futures market. Among other consequences, they are now insufferable at dinner parties... The drop in oil prices has been stunning, with both U.S. and international crude pushing a 40 percent decline since June. Attention so far has been on supply and demand getting out of whack: The world has more oil than it actually needs, with various estimates of the surplus falling anywhere from 700,000 to more than 1 million barrels of daily production.... The U.S. is mostly to blame. The shale boom has poured an extra 4 million barrels of oil into the world since 2008. That helped the market weather chaos elsewhere, keeping oil prices remarkably flat. But the trend has been clear for a while now, and plenty of smart analysts have been talking for more than a year about the potential for much lower prices...."

Brent Drops From 4-Year Low as Saudi Discounts Deepen Price War  By Ben Sharples  Dec 5, 2014 10:22 AM GMT+0800; "Brent extended losses from a four-year low as Saudi Arabia offered customers in Asia record discounts on its crude, bolstering speculation it’s defending market share. West Texas Intermediate dropped in New York.... Futures fell as much as 0.7 percent in London and are headed for a second weekly decline. State-run Saudi Arabian Oil Co. cut its differential for Arab Light sales to Asia next month to $2 a barrel below a regional benchmark, according to a company statement. That’s the lowest in at least 14 years. The kingdom doesn’t want to subsidize Iran, Iraq and Venezuela and is willing to let the market decide prices, said Daniel Yergin, an energy analyst and Pulitzer Prize-winning author... Crude slumped 18 percent last month as the Organization of Petroleum Exporting Countries maintained its output quota, letting prices decrease to a level that may slow U.S. production. Saudi Arabia has no price target and will let the market decide at what level oil should trade for now, said a person familiar with its policy... “It seems what the Saudis want, the Saudis are going to get,” Phil Flynn, a senior market analyst at Price Futures Group in Chicago, said by e-mail today. “We’re going to see prices continue to be under pressure. It is still game on.”

Sub-$50 Oil Surfaces in North Dakota Amid Regional Discounts By Dan Murtaugh  Dec 4, 2014 11:26 PM GMT+0800; "Oil market analysts are debating if oil will fall to $50. In North Dakota, prices are already there. Crude sold at the wellhead in the Bakken shale region in North Dakota fell to $49.69 a barrel on Nov. 28, according to the marketing arm of Plains All American (PAA) Pipeline LP. That’s down 47 percent from this year’s peak in June, and 29 percent less than the $70.15 paid for Brent, the global benchmark.... The cheaper price for North Dakota crude underscores how geographic and logistical hurdles can amplify the stress that plunging futures prices have put on drillers in new shale plays that have helped push U.S. oil production to the highest level in 31 years. Other booming areas such as the Niobrara in Colorado and the Permian in Texas have also seen large discounts to Brent and U.S. benchmark West Texas Intermediate.... “You have gathering fees, trucking, terminaling, pipeline and rail fees,” Andy Lipow, president of Lipow Oil Associates LLC in Houston, said Dec. 2. “If you’re selling at the wellhead, you’re getting a very low number relative to WTI.” .....

20 November 2014: Palm oil price - Brent crude and Indonesia biodiesel mandate outlook

Palm hits 5 week low as crude drops, biggest weekly drop in 3 Friday, 28 November 2014 18:22 Posted by Shoaib-ur-Rehman Siddiqui KUALA LUMPUR: Malaysian palm oil futures fell to their lowest in more than five weeks on Friday and recorded their biggest weekly drop in three, dragged down by steep losses in crude oil after OPEC decided against curbing output. Malaysian palm prices may drop to 1,740 ringgit a tonne next year if Brent crude slides to $60 a barrel, industry analyst James Fry warned at a palm oil industry meet in Indonesia on Friday... Additionally, any recovery in palm futures over the next year will hinge on Indonesia's biodiesel mandate, vegetable oil analyst Dorab Mistry said in the same palm oil meet.... Looking ahead, palm prices are expected to average 2,200-2,500 ringgit per tonne from now until June, said a senior official from Malaysia's Sime Darby Bhd , the world's top oil palm planter by land size. Copyright Reuters, 2014

Indonesia’s ‘Toothless Mandate’ for Biofuel Hurting Palm By Ranjeetha Pakiam and Yoga Rusmana  Nov 28, 2014 7:31 PM GMT+0800  Biodiesel policies in Indonesia will determine the direction of palm oil prices in the next 12 months as output climbs to a record in the biggest producer, according to Dorab Mistry, director at Godrej International Ltd. The government should impose financial penalties for non-compliance with its mandate, Mistry said in remarks prepared for a conference in Bandung today. Failure to enforce the rules will mean that palm will continue to trade between 2,200 ringgit ($652) a metric ton and 2,300 ringgit, he said....

28 November 2014: OPEC keeps production up and oil prices drop

OPEC Fails to Take Action to Ease Glut as Crude Plunges By Wael Mahdi, Golnar Motevalli and Grant Smith  Nov 28, 2014 7:00 AM GMT+0800; "OPEC took no action to ease a global oil-supply glut, resisting calls from Venezuela that the group needs to stem the rout in prices. Futures slumped the most in more than three years... The group maintained its collective production ceiling of 30 million barrels a day, Ali Al-Naimi, Saudi Arabia’s oil minister, said yesterday after the 12 nations met in Vienna. Brent crude dropped as much as 8.4 percent in London, extending this year’s decline to 34 percent...."

source:, accessed 7.30am Bandung time

At GAPKI's Bandung conference this afternoon, Dr James Fry of LMC International (yes, where I work) will be talking about the energy sector prices in relation to palm oil prices. Energy sector cost of production indicators will also be referred to. That will be worth checking out.

17 November 2014: OPEC's most difficult meeting this century and Halliburton-Baker Hughes deal

The 10-Point: My Guide to The WSJ, 17 November 2014 - A Cartel Divided:  As oil prices fall further, the Organization of the Petroleum Exporting Countries knows it must cut production. But it isn’t clear whether its members will agree. Our story examines oil-market dynamics and the issues that underlie the commodity’s recent fall. We find that, according to officials and executives, Saudi Arabia doubts that other OPEC members would live up to a collective commitment to cut output. While such a move could boost prices, we note that it would also rob members of revenue. It’s unclear how long vulnerable OPEC economies could afford to limit production. Meanwhile, failure to broker a deal could weaken the group’s already-subsiding influence over global prices. OPEC members are expected to meet in Vienna later this month. “The upcoming OPEC meeting is going to be the most difficult one during this century,” said a former senior adviser to Ali al-Naimi, the Saudi oil minister.

Big Oil Deals Return as Halliburton Moves First  By Brooke Sutherland  Nov 17, 2014 8:50 PM GMT+0800; "Halliburton Co. (HAL)’s deal for Baker Hughes Inc. (BHI) may be just the start of big energy takeovers as oil prices slump... Crude has plunged to a more than four-year low amid a U.S. supply glut. That’s making top energy companies, from equipment makers to oil explorers, cheaper for buyers that have the capital to survive and the confidence to strike. Halliburton, a $47 billion provider of oilfield services and equipment, approached Baker Hughes about a combination several weeks ago, a time when the target was trading near its cheapest price in more than a year. The forces that drove them together will likely spur on other dealmaking as well...."

What Does $75 Oil Mean to the Solar Industry? Nov. 14 (Bloomberg) -- SolarCity Co-Founder and CEO Lyndon Rive discusses the impact of lower oil prices on the solar energy industry. He speaks with Erik Schatzer from the Bloomberg The Year Ahead: 2015 summit in Washington. (Source: Bloomberg)

13 November 2014: Brent recently dips below $80

Brent Falls Below $80 For First Time in 4 Years on Glut By Mark Shenk  Nov 13, 2014 3:38 AM GMT+0800; "Brent crude, used to price more than half the world’s oil, fell below $80 a barrel for the first time in four years amid speculation OPEC will refrain from removing a surplus triggered by booming U.S. shale output... Futures dropped as much as 2.2 percent. Brent last traded below $80 on Sept. 29, 2010. The Organization of Petroleum Exporting Countries won’t cut its collective output when it meets in Vienna this month, according to Kuwait Oil Minister Ali Al-Omair... Oil plunged into a bear market last month, the result of a surge in shale drilling that has lifted U.S. production to a three-decade high as well as slowing growth in global demand. OPEC members Saudi Arabia and Kuwait have resisted calls to cut output while Libya, Venezuela and Ecuador have asked for action to prevent even lower prices...."

4 November 2014: US oil production eyes $70 oil?

How Low Can They Go?  Further declines in oil prices in the U.S. seem to be in the cards. Our story looks at the move by Saudi Arabia to unexpectedly cut prices for crude sold to the U.S., adding to pressure on American energy producers. We note that the decision increases concerns about the resilience of the U.S. oil industry, which has expanded rapidly in recent years. Some traders interpreted the Saudi action as taking aim at U.S. shale-oil production rather than being driven by supply and demand. However, an industry official said that it wasn’t a decision to undercut shale production, but rather an incentive for refiners in the U.S. to get higher margins by buying more Saudi crude. Nonetheless, most analysts expect U.S. oil production to keep increasing unless prices fall below about $70 a barrel.

31 October 2014: OPEC members raising output, shale and changes in oil trade routes

Khor Reports comment: There's a lot of discussion in the agro-commodity space about oil prices as prices of commodities, especially palm oil have become quite linked to oil price as agricultural crops are key feedstocks in biofuels. 16% of palm oil is used in biodiesel now. So, putting back on a rather dusty equity analyst hat, we pulled together a share price chart comparison for Exxon, Petrobras, SembCorp Marine [1] (among other things selling oil rigs to Petrobras and others), and Sapura Kencana (key Malaysia oil & gas sector services provider) below. The correction in Petrobras share price is particularly big and SembCorp Marine (alongside Keppel Corp) was among significant providers of oil rigs for offshore oil & gas, and also corrected. Exxon has done better, but another oil & gas services company in Malaysia (with Petronas pushing for domestic oil & gas reserves increases via development of marginal fields) had huge share price gain and a recent correction. Oil & gas services and equipment companies are considered a leveraged play on oil & gas prices.

[1] Singapore government-linked corporation with key utilities and marine services businesses.
In the latter: "Offers a full spectrum of integrated solutions from ship repair, ship conversion, rig building and repair to offshore engineering and construction" with FY2013 Group net profit mix (excluding Corporate) of 39% or S$337m.

OPEC Boosts Oil Output as Prices Slide to Four-Year Low 31 Oct 2014;; "Brent crude for December settlement slipped 88 cents, or 1 percent, to $86.24 a barrel on the London-based ICE Futures Europe... OPEC nations lifted output as Brent crude ... survey of oil ...Production by the 12-member Organization of Petroleum Exporting Countries climbed by 53,000 barrels a day to 30.974 million, led by gains in Iraq, Saudi Arabia and Libya, according to the survey of oil companies, producers and analysts. Last month’s total was revised 14,000 barrels a day lower to 30.921 million because of changes to the Iraqi, Kuwaiti, Nigerian and Qatari estimates.

OPEC nations lifted output as Brent crude dropped to a four-year low amid ample global supplies and sluggish demand. The group’s biggest producers, Saudi Arabia, Iraq, Iran and Kuwait, have cut their official selling prices, sparking speculation they will compete for market share rather than trim output. Ministers will gather next month to discuss the group’s production target...."

Shale Boom Redraws Oil Routes as Alaskans Ship to Korea  31 Oct 2014;; "The U.S. Commerce Department in June opened the door to more U.S. oil ... U.S. West refineries, traditional buyers of Alaskan oil ... of benchmark crudes ... The bank cut forecasts for Brent ... State-owned Saudi Arabian Oil ..."

Why Oil Prices Went Down So Far So Fast 30 Oct 2014;; "Break-Even Points for U.S. Shale Oil Brent crude ... Brent crude ... The Paris-based International Energy Agency predicted world oil ... On Oct. 1, Saudi Arabia lowered prices on its crude ... The plunge does not accurately reflect the balance between oil ...The reasons oil prices started sliding in June were hiding in plain sight: growth in U.S. production, sputtering demand from Europe and China, Mideast violence that threatened to disrupt supplies and never did.... After three-and-a-half months of slow decline, the tipping point for a steeper drop came on Oct. 1, said Ray Carbone, president of broker Paramount Options Inc. That’s when Saudi Arabia cut prices for its biggest customers. The move signaled that the world’s largest exporter would rather defend its market share than prop up prices...."

More here:

15 October 2014: It's fallen from $105-110 range to $85 now

U.S. Oil Producers May Drill Themselves Into Oblivion  By Matthew Philips, October 13, 2014; "Remember the fall of 2008? As the world spun out of control and the price of everything crashed, a barrel of oil lost 70 percent of its value over about five months. Of course, prices never should’ve been as high as $146 that summer, but they shouldn’t have crashed to $40 by the end of that year either.... As the oil market has recovered, there have since been three major corrections, when prices have fallen at least 15 percent over a few months. We’re now in the midst of a fourth, with oil prices down more than 20 percent since peaking in late June at around $115 a barrel. They’re now hovering in the mid-$80 range and could certainly go lower. That’s good news for U.S. consumers, who are finally starting to reap the rewards of the shale boom through low gasoline prices. But it could spell serious trouble for a lot of oil producers, many of whom are laden with debt and exaggerating their oil reserves.... In a way, oil companies in the U.S. are perpetuating the crash by continuing to drill and push up U.S. oil production to its fastest pace ever. Rather than pulling back in hopes of slowing the amount of supply on the market to try and boost prices, drillers are instead operating at full tilt and pumping oil as fast as they can. Just look at the number of horizontal rigs in the field...One final note of caution: The U.S. natural gas industry ran through this same cycle a few years ago with companies getting themselves into trouble by flooding the market with gas, crashing the price and themselves in the process. By mid-2012, the price of natural gas got too cheap to drill. The number of natural gas rigs in the field still isn’t anywhere close to returning to where it was a few years ago...."

Oil Oversupply Highlights Discord within OPEC, Wednesday, 15 October 2014; "Oversupply, slowing demand, a strong US dollar, and OPEC discord as to what to do about these factors are culminating in sliding oil prices. Wealthy Gulf states, including Saudi Arabia, will likely push to maintain current output and oil prices will continue to slide....The price of oil is at a multi-year low. A trio of factors, oversupply (Libya has restored production, and the US has cut a third of their oil imports), a strong US dollar and a slowdown in demand, particularly from South and East Asia, has seen the price of oil slump......Iraq and Iran will lead the push to reduce production and raise the oil price closer to a benchmarked $100 a barrel. After years of sanctions, Iran’s economy is fragile. The country requires US$130 (US$140 by some estimates) a barrel to profit, compared to the UAE at US$70, and Saudi Arabia at US$90, making any further reduction unacceptable. Budget balancing will also be on Iraq’s agenda. Though sometimes forgotten, a cost of over US$90 a barrel is still a high price. For Saudi Arabia this market volatility is not an immediate disaster. With huge currency reserves and little national debt, the Kingdom is well prepared for the short term, as are other rich Gulf such as the UAE. So far, Saudi Arabia seems to believe the current situation is a temporary phenomenon, and dismissed calling an emergency meeting before November... ";

October's Wild Ride Isn't Over Yet by Mohamed A. El-Erian, Oct 15, 2014 3:20 PM EDT; "For quite a while now, too many investors have been comforted by two intoxicating notions: that the global economy would continue in a low-growth equilibrium, thus avoiding both a recession and an inflationary boom, and that central banks would succeed in repressing market volatility, not just pre-emptively but also after the fact should an unanticipated event occur. Together, these perceptions encouraged large across-the-board risk-taking that, in many instances, lost sight of fundamental valuations, liquidity realities and unbalanced market positioning.... Both notions have come under pressure in the last two weeks, simultaneously and significantly. Today’s moves in asset prices would not have been so dramatic had markets not been so overly optimistic in their positioning. But they were. And the resulting price volatility was dramatic in virtually every asset class.... Given where we are coming from, this technical phase will not dissipate quickly. Though unlikely to be as dramatic as today, market volatility can be expected to continue in the days and weeks to come as two forces compete: first, the forced deleveraging of certain investors, particularly overstretched hedge funds registering big October losses; second, central banks scrambling to say all sorts of reassuring things. All of this will serve to reinforce October’s longstanding reputation as a threatening month for investors around the world...."

China pushes for full scale bio-fuel ethanol E10 by 2020

"Yesterday the Chinese government announced that bio-fuel ethanol will be introduced in full scale by 2020. This has driven up all the stocks related to bio-fermentation companies and their rise continues today. I believe the direction is set." Says Hao Li, Managing Director of HCA Consulting China, from his Beijing office.
CNBC writes, "It's the first time the government has set a targeted timeline for pushing the biofuel, known as E10 and containing 10 percent corn, across the world's largest car market... The news comes after the government said late last year it would aim to double ethanol output by 2020 amid growing pressure to whittle down mountains of ageing corn in state warehouses." (
Will China also provide a positive jolt for Indonesia and Malaysia palm oil? There is an increased engagement with the China market from palm oil exporters, given their apparent problems in Europe regarding volume drops in food-use and also political policy noises to cut off access to biodiesel market there. The Singapore BT just headlined "Top palm oil firms facing EU firing rethink trade strategy - Major producers in Indonesia and Malaysia are looking at new markets ranging from Africa to Myanmar" ( 
Malaysia data for its export mainstay of palm oil, saw an overall 8% drop in volume (on lower production) in 2016 but exports to the top three Malaysia export markets were particularly down; India, China and Netherlands faced volume drops of -23%, -21% and -29% respectively, and #7 and #9 export destinations USA and Japan were both down -16%.
The views of regional biodiesel traders are well represented by this comment: "Interesting, but a long shot as this would require China to pay a premium for B5 unless they are willing to subsidize."
HCA China analysis for biofuels:
From 2017, auto gasoline (including E10 ethanol gasoline) and auto diesel (including biodiesel) that meets the national standard GB-V will be supplied throughout China. Driven by this policy, the biofuel industry is expected to enter a golden period of development.This has drawn the attention to palm oil producers. The Chinese government seeks to promote the use of B5 biodiesel. Based on a 180 million kiloliters/year consumption of diesel fuel in China, the promotion on B5 biodiesel will directly drive the sales volume of biodiesel by increasing 9 million kiloliters (9 million MT) per year. According to data issued by the General Administration of Customs, China’s palm oil import volume totaled 3.07 million MT in 2016. Theoretically, the import volume of palm oil would double, if the government’s energy dividend policy is implemented.... Currently, there is no detailed schedule about the negotiations between each country. Further, the application of biodiesel requires the support of policy and downstream companies.
"The new policy for 13 Sep 2017 sets out bio fuel ethanol as the representative of the bio energy policy; it is a national strategic emerging industry. In the current situation, the expansion of bio fuel ethanol production and promotiong of the use of ethanol gasoline, will optimize the energy structure, and also improve the ecological environment, the regulation of the grain market,as well as to the promotion of rural and regional economic development," says Dr Hao.
Ethanol gasoline is a mixture of 10% fuel ethanol and 90% common gasoline blended with gasoline (E10 gasoline). In this composition, ethanol as a combustion improver can help gasoline burn more fully. Compared to the current mainstream gasoline additive MTBE, ethanol obviously has lower emission advantages of environmental protection. China policy has been increasingly concerned about air pollution.
With the 13 Sep 2017 new policy direction set for biofuel ethanol, keep in touch with us on other China biofuels and chemicals sector happenings. China's multi-pronged policy shifts are market movers.
By KHOR Yu-Leng, Segi Enam Advisors Pte Ltd, interviewing Dr HAO Li, HCA Consulting China, 14 Sep 2017.
Note: China's Surprising Solutions to Clear Killer Air - More than a million people are thought to die a year from air pollution in China, but now the country is fighting back with innovative solutions, 5 May 2017,  

Dairy / dairy-free news (update 7): Fonterra requests its smallholders to limit the use of palm kernel expeller / PKE to 3 kg per animal per day. Wilmar says PKE sales to NZ are under 1% of revenue. Back news - NZ palm kernel imports picked up to 222,413 tonnes in Nov 2015

Some interesting shifts in the dairy/non-dairy sector: "Rinehart’s dairy will seek to use labeling that would allow customers to check the specific animals that produced milk used to create each package of powder." We'll start to accumulate newsy things on infant formula and other dairy/non-dairy products. Of course some palm oil is also used in infant formula and other milk replacements as the folk in specialty fats does formulation work for non-dairy alternatives. Also notable that Iran has been shifting policy to reduce dairy-free replacements with palm oil and others.

20 Feb 2016: Back news - NZ palm kernel imports picked up to 222,413 tonnes in Nov 2015

Editor's note: Indeed, Fonterra reported some 2 million tonnes of PKE under RSPO certification in 2014

NZ - Palm kernel imports jump Dec 30, 2015; Palm kernel imports picked up sharply last month, despite the efforts of Fonterra and Greenpeace to curtail its use.... Imports of the controversial livestock feed supplement, which is used extensively in the dairy industry, came to 222,413 tonnes last month, up from 138,763 tonnes in October and 178,381 tonnes in November last year, according to Statistics NZ data....  Fonterra in September launched a campaign to get farmers to pull back on using palm kernel because too much can alter the composition of milk. Greenpeace has for many years put pressure on Fonterra to stop using palm products, linked to deforestation and peat drainage....

4 Jan 2016: Fonterra requests its smallholders to limit the use of palm kernel expeller / PKE to 3 kg per animal per day. Wilmar says PKE sales to NZ are under 1% of revenue.

Note: Ambank briefing reports as follows, "Wilmar said that its sales of palm kernel expeller to New Zealand accounts for less than 1% of group revenue." Greenpeace's report in December 2015 raises concerns that policies for "no deforestation" by big traders has yet to work (refer to 4 Jan posting: and it is notable too that Greenpeace's Naidoo stepped down in December 2015. Watchers will be looking out for policy shifts at Greenpeace on palm oil supply-chains, including The Forest Trust traceability schemes for the large commodity traders. 

Fight against palm snares unexpected users: New Zealand dairy farmers WELLINGTON  |  By Rebecca Howard Dec 23, 2015; The world's biggest dairy exporter, New Zealand's Fonterra, has found itself caught in the crossfire of an unexpected new controversy: a global environmental campaign against the destruction of rainforests. The South Pacific island nation, which prides itself on its green image, has become a top buyer of palm kernel expeller or PKE, a by-product of the palm oil industry, which is under attack over deforestation, choking fires and habitat destruction in Southeast Asia. ... For New Zealand dairy farmers palm kernel has been a "lifesaver" by boosting production when grass is sparse, said Chris Engel, who runs 400 cows in the Wairarapa region on the southern tip of the North Island. "It has been a fantastic supplement for farmers facing a drought and you can just ring up and get a truck load when you need it," he said.... But environmentalists say the product - what's left of the palm kernel once the oil has been extracted - contributes to the profitability of the palm industry and have called on Fonterra to stop using PKE linked to environmental damage.... Unlike in Europe and North America, New Zealand dairy cows spend their lives outdoors, eating mostly grass. But imports of PKE, a dry, gritty meal with a soapy smell, have risen 10-fold over the past decade as farming has become more intensified and the use of supplementary feed has surged to ramp up production. "A third of all PKE that's traded in the world goes to New Zealand," said Russel Norman, executive director at Greenpeace New Zealand. "New Zealand is spending over NZ$400 million ($270 million) a year on PKE and so it's a significant profit center for the palm industry."... Recently Fonterra called on its 10,500 farmer shareholders to limit the use of palm kernel to 3 kg per animal per day. Farmers say cows can need up to 6kg of the supplementary feed per day when conditions are dry....

Fonterra - Palm Kernel Expeller (PKE) webpage: PKE sold by Fonterra’s subsidiary RD1 is bought from INL, who import it from a single source, Wilmar International. Wilmar practices a “no burn” policy, respects designated conservation areas, employs wildlife protection experts, and is on target to complete RSPO certification audits for all their plantation operations by 2015. Wilmar recently announced that it no longer develops plantations on peat-land....

Earlier news links

  • Fonterra wants farmers to cut back on palm kernels by GERARD HUTCHING September 21 2015; Fonterra is trying to persuade farmers to use fewer palm kernel supplements because it says milk from grass-fed cows fetches a premium on world markets. The dairy giant is recommending farmers feed a maximum of 3 kilograms of palm kernels per cow per day.... The advice has been greeted warily by former Federated Farmers Waikato dairy spokesman Craig Littin."Farmers would like to see evidence for a premium. If that's what markets are demanding, then fine. If not, they should leave farmers to farm and them [processors] to process," Littin said. At $200-$230 a tonne, palm kernel was the cheapest imported feed, he said....  ... Fonterra group director co-operative affairs Miles Hurrell said consumers globally were driving a trend towards dairy products that were sourced from pasture-based milk. "We are in a unique position to make the most of this trend to enhance returns to our farmers who are already renowned for producing the best milk in the world. This recognition is a direct result of our farmers' pasture-based farming model."This gives us a key competitive advantage globally. Our milk products have an excellent reputation and we want to maintain that, and stay ahead of increasing consumer expectations....
  • Palm kernel protest won't shift Fonterra or PM  17 Sep 2009; Both Prime Minister John Key and dairy giant Fonterra are turning a deaf ear to Greenpeace activists' demands following yesterday's dramatic protest off the Port of Tauranga. Up to 14 Greenpeace protesters boarded the Hong Kong-registered freighter East Ambition, lashing themselves to cranes and the anchor, preventing the ship from docking. They were protesting Fonterra's importation of palm kernel for use as stock feed because of its role in the destruction of rainforests, predominantly in Malaysia and Indonesia....

13 Dec 2015: Fonterra and PK. Russia and Iran issues.

Fonterra to meet with Greenpeace 26 November 2015 Fonterra and Greenpeace will meet next week to discuss concerns about palm kernel expeller and major fires in Indonesia....

Fonterra 'linked to rainforest destruction' 21 November 2015 Greenpeace is accusing Fonterra of being directly linked to deforestation in Indonesia through the importation of palm kernel...'linked-to-rainforest-destruction'

On Russia and Iran issues - get in touch to find out more.

22 May 2015: infant formula shows China’s remarkable demand slows, earlier data on slowing and intense competition in instant noodles

Interesting to note the slowdown in instant noodles and now infant formula too...

Party over for infant formula firms as China’s remarkable demand slows By RJ Whitehead, 19-May-2015 The “easy money has been made” for Chinese and international infant formula companies as they prepare for the rush for powdered baby food to tail off over the next five years after a decade’s stratospheric growth.

UPDATE 1-China food giant Tingyi's sales and profit skid on slowdown, competition By Adam Jourdan Mon Mar 23, 2015 1:54am EDT  * Tingyi 2014 net profit down 2 pct, trails forecasts * Annual sales fall for first time since 1998 * Competition in market "intense" - Chairman * Analysts eye boost in 2015 from lower input prices (Adds chairman's comment, earnings details, context)
SHANGHAI, March 23 (Reuters) - China's largest food and beverage maker, Tingyi Holding Corp, said net profit slid 2 percent in 2014, falling well below estimates, as a slowing economy and fierce competition dragged sales down for the first time in almost two decades. Hong Kong-listed Tingyi, owner of the Master Kong brand and a partner with PepsiCo Inc and Starbucks Corp in China, said on Monday profit for the year fell to $400.5 million from $408.5 million a year earlier. ......Tingyi said total revenue was $10.2 billion for the year, down from $10.9 billion a year earlier, the first sales drop since 1998. The number was squeezed by a 4.5 percent drop in instant noodle sales, which accounted for 40.4 percent of revenue, and a 7.5 percent drop in beverage sales, contributing 56.7 percent of revenue. Analysts have said lower materials prices and Tingyi's advantage of scale over rivals - it commanded around a third of China's noodle market last year, according to Euromonitor - could help it soak up slowing domestic economic growth in 2015. The firm competes with Uni-President China Holdings Ltd and Want Want China Holdings Ltd, which announced an almost 10 percent drop in full-year net profit last week.

16 February 2015: Coca-Cola produces Fairlife premium milk, filtered and adjusted for 50% more protein, 30% more calcium and 50% less sugar

Got Coke? Soda maker starts selling 'premium milk' by Associated Press February 3, 2015, 4:02 PM
Coca-Cola is coming out with premium milk that has more protein and less sugar than regular milk. And it's betting people will pay twice as much for it..... The national rollout of Fairlife over the next several weeks marks Coke's entry into the milk case in the U.S. and is one way that the world's biggest beverage maker is diversifying its offerings as Americans continue turning away from soft drinks.... It also comes as people increasingly seek out some type of functional boost from their foods and drinks, whether it's more fiber, antioxidants or protein. That has left the door open for Coke to step into the milk category, where the differences between options remain relatively minimal and consumption has been declining for decades.... "It's basically the premiumization of milk," Sandy Douglas, president of Coca-Cola North America, said at an analyst conference in November. If developed properly, Douglas said, it is the type of product that "rains money.".... Fairlife, which Coca-Cola formed in partnership with dairy cooperative Select Milk Producers in 2012, says its milk goes through a filtration process that's akin to the way that skim milk is made. Filters are used to separate the various components in milk. Then more of the favorable components are added, while the less desirable ones are kept out. The result is a drink that Fairlife says is lactose free and has 50% more protein, 30% more calcium and 50% less sugar than regular milk.... The same process is used make Fairlife's Core Power, a drink marketed to athletes that has even more protein and calcium than Fairlife milk.....

22 Dec 2014: Palm oil free labels on infant milk cans

‘Palm Oil Free labels damaging for Malaysia’ By OOI TEE CHINGKUALA - 21 December 2014 @ 11:59 PM; THE spreading of “No Palm Oil” or “Palm Oil Free” campaign, first in Europe and now in Singapore, is potentially damaging for Malaysia, said National Association of Smallholders (Nash) of Malaysia. “It has come to this part of the world,’’ Nash secretary-general Zulkifli Mohd Nazim said, showing Business Times photographs of infant milk cans taken at a supermarket in Singapore with highly visible “Palm Oil Free’’ signages on them. He said the public is being misled into believing that saturated fats in palm oil are bad when in reality they are necessary in a balanced diet.....

14 November 2014: Gina Rinehart to produce traceable infant milk for China

China’s Hungry Infants Sought in Rinehart Formula Switch  By David Stringer and Stephen Engle  Nov 14, 2014 7:57 AM GMT+0800; "Gina Rinehart, chairwoman of Hancock Prospecting Pty. Gina Rinehart, the Australian billionaire who built her fortune on iron ore, is planning a A$500 million ($435 million) investment to supply infant formula to a Chinese market forecast to almost double over three years.... Hope Dairies Ltd., controlled by Rinehart’s closely held Hancock Prospecting Ltd., is seeking to acquire about 5,000 hectares (12,400 acres) of farmland in Queensland state and is targeting first production in the second half of 2016, according to co-investor and director Dave Garcia........A free-trade deal with China, seen boosting dairy exports, may be signed next week, Australia’s Prime Minister Tony Abbott said in a Nov. 10 interview.... The market in China for infant formula may grow to NZ$33 billion ($26 billion) by 2017 from about NZ$18 billion ($14 billion) now, according to Fonterra Co-operative Group Ltd., the world’s biggest dairy exporter.
Rinehart’s planned operation would employ about 400 people, adhere to stringent biosecurity standards and produce about 70 to 75 percent of its own milk from a herd of about 16,000 Holstein cattle, including 10,500 milkers, according to Garcia. The Van Diemen’s Land Co. has Australia’s biggest dairy operation, milking about 19,000 cows on holdings in Tasmania... China in May tightened standards on imported formula following concerns over contamination. Fonterra had exports of two products suspended for 15 months from August 2013 after a botulism scare that was later proved to have been a false alarm. In 2008, locally-made milk powder contaminated with the chemical melamine killed at least six infants in China.... Rinehart’s dairy will seek to use labeling that would allow customers to check the specific animals that produced milk used to create each package of powder, Garcia said.... Milk producers are also expanding exports, with Norco Co-operative Ltd. agreeing to more than double fresh milk sales into China and Bega Cheese Ltd. striking a distribution deal to supply UHT milk to the nation.... Expansions by domestic infant formula producers in China risk moving the market into oversupply, UBS AG analysts led by Christine Peng wrote in a June 7 note. Total consumption in China may peak in 2018, according to Macquarie Group Ltd...."

Eye on Jokowi and Indonesia palm oil: Indonesia finance and health ministries mull sugar tax, Scorecard Mixed as Indonesia's Jokowi `Drifts' in First Year, PT Bank Mandiri - commodity-based provinces should find new sources of economic growth as the commodity boom is over

We'll keep an eye on Indonesia's new President Jokowi's view on palm oil and other related key economic issues and top level policy / regulatory issues.

Jokowi and 2015 Haze: Step-down on smallholder interest, Indon-Malaysia cooperation, Singapore haze clampdown

30 November 2015: Indonesia finance and health ministries mull sugar tax

Indonesian Sugar-Tax Talk Chills Drinks Industry - Health concerns may prompt curbs on the growing taste for sweet beverages in Southeast Asia’s largest economy, By Ben Otto and Anita Rachman  Nov. 27, 2015; .... Finance officials in the world’s fourth most populous nation have asked the health ministry to study whether sugary drinks, including soda and Indonesia’s most popular bottled drink after water, tea, constitute a health threat, said Suahasil Nazara, head of the ministry’s Fiscal Policy Agency. That would make such drinks eligible to join an excise list of high-bracket tax items comprising tobacco—one of the country’s biggest tax contributors—and alcohol. ...Indonesia has taxed some sweetened beverages in the past under a luxury-goods tax, but stopped the practice in 2004. The taxes crippled drink makers, according to the local Beverages Industry Association, which said sales of sweetened beverages have averaged double-digit annual growth since taxes were lifted....

Should There Be a Tax on Soda and Other Sugary Drinks? Supporters say it is an effective way to cut obesity. Critics say the health benefits are far less than claimed. July 12, 2015

22 October 2015: Scorecard Mixed as Indonesia's Jokowi `Drifts' in First Year, PT Bank Mandiri - commodity-based provinces should find new sources of economic growth as the commodity boom is over, Scandal-Hit Malaysia Risks Lost Decade. Sarawak asks for more than "palm oil, palm oil, palm oil" 


Scorecard Mixed as Indonesia's Jokowi `Drifts' in First Year by Neil Chatterjee Updated on October 20, 2015 — 3:00 PM HKT; Jokowi behind targets on growth, infrastructure, inequality. Some progress on bureaucratic reform, step backwards on graft....His popularity among voters and investors has fallen in a year marked by slowing economic growth, policy u-turns and controversy over appointments. Widodo, known as Jokowi, said on his Twitter account Tuesday that the past year was about laying foundations and the first step was often the hardest. “His first year in office has been characterized more by drifting through, rather than a seamless execution of a meticulously thought out master plan,” said Wellian Wiranto, an economist at Oversea-Chinese Banking Corp. in Singapore....Consumer confidence fell to more than a six-year low in September, in a country where domestic consumption makes up over half of the economy, and foreign direct investment has stagnated. A series of recent stimulus measures have amounted to tinkering rather than fresh cash or major structural reforms. “There is no evidence of a strategy to turn around the economy,” said Paul Rowland, an independent Jakarta-based political analyst. “Tweaks won’t do it unless they add up to a more coherent strategy that unshackles domestic and foreign investment.”...“The decision to rearrange a number of ministries also ate up a lot of time while new senior bureaucrat positions were filled, and it’s arguable that was unnecessary,” said Keith Loveard, head of political risk analysis at Jakarta-based security company Concord Consulting. “However, one year on there is a sense that the ship of state is settling on a steady course.”...INFRASTRUCTURE DEVELOPMENT. Jokowi pledged to build 30 new dams, 15 airports, 24 ports, and 3,258 kilometers of railroads among infrastructure plans. After a slow start, there are signs some projects are starting to get going. The government opened the taps for a Chinese-built dam in August and state companies agreed terms with China for a new railway to Bandung this month. Jokowi attended a ground-breaking ceremony for a $4 billion coal-fired power plant that he said would start after years of delays. Yet the Japanese investors in the project say they have not fully acquired the land they need.... FIGHTING CORRUPTION. Jokowi vowed after wining the July election to cut corruption by 70 percent by building new systems, such as electronic tax collection, and the remainder by adding staff to the anti-graft agency known as the KPK. This issue has perhaps been the biggest disappointment for his supporters. The KPK named Jokowi’s choice for police chief a suspect and the police retaliated by investigating the agency’s commissioners, leading several to step down. Since then, there have been few high profile arrests by the agency.... INEQUALITY. A “dangerous” level of inequality threatens the world’s fourth most-populous nation, Jokowi told Bloomberg in February. The economic slowdown isn’t helping. Around 43,000 workers in Indonesia lost their jobs between January and September, the Bisnis Indonesia newspaper reported. The country’s poverty rate was 11.25 percent in March, up from 10.96 percent in September before Jokowi took office....

Analysis: The effect of commodity price changes on Sumatra and Kalimantan Mamay Sukaesih, Jakarta | Business | Wed, October 21 2015, 5:45 PM; .... Our analysis has revealed that commodity-based provinces should find new sources of economic growth in the future. The main reason is simply that the commodity boom is over, implying that they can’t rely on commodity-based development anymore. One of the alternatives is to promote resources-based industries such as manufacturing and adding the value of goods that have been produced in the regions. PT Bank Mandiri (Persero) Tbk. - See more at:

Sarawak has to industrialise: CM 22 October 2015 by Patricia Hului BPO Newsdesk; ...In an interview with Bloomberg TV Malaysia, ‘Spotlight on Sarawak: Playing Catch-Up’ broadcast on its website Oct 21, the chief minister addressed the need for the state to industrialise, diversify its agricultural sector and increase infrastructural development....On the need for the state to industrialise, the chief minister said that Sarawak was no longer satisfied with only producing raw materials as in the old days. “We want to process these products ourselves so that we can retain the added value.” About 40 per cent of Sarawak’s economy is reliant on commodities, but contribution from manufacturing, construction, services and other industries is on the increase. “I have decided no more timber licensing, no more plantations. For the time being, give ourselves a respite and then perhaps eventually we will depend on our industry.” .... On the state’s palm oil industry, Adenan is looking to diversify the agricultural sector in Sarawak. “Food production is very slow and now we insist on palm oil, palm oil, palm oil. It’s good, but why can’t we grow other crops for production, food crops and so on,” he said, foreseeing increased interest in this area coupled with Sarawak’s availability of land for food production. Read more:

A Case of Brazil Blight? Scandal-Hit Malaysia Risks Lost Decade by  Shamim Adam October 16, 2015 — 6:00 AM HKT; Meet Malaysia, the new Brazil. Nearly felled by the Asian financial crisis in the late 1990s, the Southeast Asian nation recovered to become a global commodities juggernaut, known for its stable government and investor-friendly policies. Now, with its premier enveloped by a multi million dollar funding scandal, Malaysia risks being infected with the kind of economic malaise that has struck its emerging market counterpart in South America....
Ringgit Falls as Malaysia Faces Oil-Revenue Pressures in Budget  by  Y-Sing Liau Updated on October 19, 2015 — 5:21 PM HKT  Budget will be ``one of the most difficult'': PM Najib. China growth beats forecasts, but still slowest since 2009.

19 October 2015: Greenpeace - Indonesia's new emission target a step back, other policy flip-flips, seeking dilution of sustainability pledges and policies for smallholders, illegal palm oil mills, Singapore haze angst targets pulp & paper, palm oil and banks

Indonesia’s new emissions target actually a step back: Greenpeace The new target might seem like an improvement over Indonesia’s previous commitment to cut emissions growth by 26 per cent over projected business-as-usual levels by 2020, but it actually represents a regression, Greenpeace says.

Jakarta’s baffling rail flip-flops - Indonesia’s handling of the bidding for its first high-speed train, with reversals and mixed messages to Japan and China, added to the confusion foreign companies face as the government courts them to boost southeast Asia’s largest economy; Indonesia picks China to build high-speed rail project   Ben Otto  | The Wall Street Journal  | October 02, 2015 12:00AM
China, Japan baffled by Indonesia bullet train decision Saturday, 5 Sep 2015 | 3:23 AM ETReuters; ...Indonesia's 11th-hour decision to scrap plans for the nation's first high-speed railway has sown confusion among top investors China and Japan, potentially undermining the strong foreign investment that has been a rare economic bright spot. China and Japan had been battling over the multi-billion dollar contract, until it was abruptly pulled in what appeared to be the latest in a series of regulatory flip-flops and erratic policy-making moves under President Joko Widodo. Indonesia's chief economics minister was left to explain to the two Asian giants on Friday the reason why Jakarta decided at the last-minute that the bullet train project was the wrong option for Southeast Asia's largest economy. "It looks like a sudden move because the recommendation was made after a review of both proposals," Teten Masduki, presidential chief of staff, told Reuters. "But the recommendation is in the best interest of the country."  .. Tokyo and Beijing had lobbied heavily for the $5 billion contract, each sweetening the terms of their bids up until Monday's deadline. Analysts believed that whoever had won would likely have been the front-runner for future high-speed rail projects in Asia, including one linking Kuala Lumpur and Singapore....
Jokowi and 2015 Haze: Step-down on smallholder interest, Indon-Malaysia cooperation, Singapore haze clampdown


9 September 2015: Jokowi to Discuss Drought, Wildfires With Key Aides, KPK leadership to fight natural resources corruption

Jokowi to Discuss Drought, Wildfires With Key Aides  Jakarta. By : Novy Lumanauw, Arnold Sianturi & Radesman Saragih | on 02:53 AM August 31, 2015; With the end of the dry season not nearly in sight due to this year's El Nino, wildfires raging out of control and parts of the country barely coping with thick smoky haze, President Joko Widodo is looking for solutions. Environment and Forestry Minister Siti Nurbabya was set to meet the president on Monday, along with key climate change advisers such as special presidential envoy Rachmat Witoelar and Sarwono Kusumaatmadja. "The problem of forest fires will be one topic of discussion," Teten Masduki, a spokesman for Joko, said on Monday morning. "A lot of issues will be talked about, but it's about coordination." Forest fires in Jambi and South Sumatra, meanwhile, continued to also cover parts of North Sumatra in smoke, causing problems for people in major cities such as Medan....The Meteorology, Climatology and Geophysics Agency (BMKG) is advising people in the region to wear face masks when they need to leave the house. Activists in Jambi say palm oil entrepreneurs and the government are not doing enough to prevent the fires or to contain them....

Walhi to gather complaints on forest fires The Jakarta Post, Jakarta | National | Wed, September 02 2015, 4:48 PM; The Indonesian Forum for the Environment (Walhi) is setting up regional posts to accommodate complaints from the public related to losses caused by forest fires. The posts will be set up at district levels in five provinces: Riau, Jambi, South Sumatra, Central Kalimantan and West Kalimantan. Each post will be equipped with doctors and academics that will record health, ecosystem and social losses caused by the man-made disaster.“This is a new breakthrough. Usually we sued companies that caused fires without submitting data on loss experienced by the public. This time we will include the data to sue not only the companies but also regional and central governments for letting the companies cause the fires,” said executive director of Walhi, Abetnego Tarigan, in a press conference called “Where There are Concessions, There is Smoke” at Walhi headquarters in South Jakarta on Tuesday.So far one post  as been set up in Palangkaraya, Central Kalimantan, and it has been operating for a week.Walhi notes at least four types of losses are caused by the draining of high carbon stock peatland for agriculture use, the root reason for forest fires. They are losses to ecosystem balance, social and health, which lead to economic losses. - See more at:

Smoky Haze Forces Jambi Schools to Close By : Radesman Saragih | on 08:17 AM August 29, 2015; A study by the local conservation group KKI Warsi and the Bogor Institute for Agriculture (IPB) estimates economic losses due to the fires to be at least Rp 716 billion ($50 million) so far this year. "There's losses due to palm oil plantations burning down on peatlands, there's losses due to flight and shipping disruptions, there's air pollution causing a lot of people to suffer respiratory tract infections and there's environmental damage," said Rudy Syaf, a spokesman for KKI Warsi.

KPK leadership to fight natural resources corruption Abetnego Tarigan, Jakarta | Opinion | Wed, September 02 2015, 4:20 PM; Various civil society groups have raised the issue of corruption in the natural resources sector, with several cases occurring particularly in the oil palm and mining sectors, in which industry players are linked with regional heads of government....Through monitoring coordination and supervision, about 4,000 mining licenses in 12 provinces have been found to be questionable. The KPK has suggested annulment of such licenses, despite lackluster responses from regional administrations. According to the Indonesian Environment Forum (WALHI), only a small number of the licenses have been repealed, including those in Bangka Belitung (eight), South Sumatra (17), Jambi (184), South Sulawesi (33), Southeast Sulawesi (184), Central Sulawesi (85) and West Kalimantan (nine). The KPK has estimated state losses from corrupt licensing practices at Rp 1,000 trillion (US$71.4 billion).As part of the National Movement for the Rescue of Natural Resources, 29 ministries/institutions and 12 provincial administrations signed on Mar. 19 a memorandum of understanding regarding the eradication of corruption in the maritime, forestry and palm oil sectors. The movement was prompted by the need for cooperation between relevant sectors, ministries and institutions. The initiative has been further supported by the investigative and prevention efforts of the KPK, thus indicating the KPK’s growing role in the area of natural resources corruption eradication. - See more at:

30 August 2015: Indonesia Coordinating Economic Minister worries voluntary corporate pledges jeapordise small farmer prospects

Govt opposes zero-deforestation pledge by palm oil firms Hans Nicholas Jong, The Jakarta Post, Jakarta | Headlines | Sat, August 29 2015, 6:21 PM; In stark contrast to Indonesia’s commitment to reduce rampant deforestation, the government has surprisingly become a vocal opponent of a “zero deforestation” pledge signed by the four biggest palm oil companies in Indonesia.The Office of the Coordinating Economic Minister said on Friday that the pledge would jeopardize the country’s palm oil industry, currently the biggest in the world, as it puts restrictions on small farmers.“Oil palm plantations are the livelihoods of many of our people. The most effective driver of economic growth is through oil palm plantations,” the office's deputy for food and agriculture coordination Musdhalifah Machmud said on Friday......

18 August 2015: Jokowi says "let's work" and letter of credit implementation

Editorial: Time to Get to Work for Real Now  By : Jakarta Globe | on 13:15 PM August 14, 2015; Joko Widodo’s inaugural state-of-the-nation address as president this Friday came just two days after he carried out what was widely seen as a much-needed reshuffle to knock his economics team into shape. We realize the president is in a bind: he came into office just as Indonesia’s economic growth started grinding down to its slowest pace in five years, and the rupiah embarked on a perilous slide (whether the latter’s continued slide is an effect of the government’s recent policies is a whole other story). He is also beholden, on one hand, to his political benefactors, and on the other, to the people who expected a cabinet of professionals, not party appointees. Joko closed his speech with a rousing chant of “Let’s work!” Inspiring? Perhaps, but it invites an uneasy question: Just what has the government been doing for the past 10 months?...

Freeport's Export Halted Due to Letter-of-Credit Predicament By : Rangga Prakoso | on 09:21 AM August 11, 2015 Riza said there is no obligation to use letters of credit under Freeport's current working contract with the government, but that the company wanted to make a point of strictly complying with all of the ministry's regulations.  The mechanism is based on a regulation that the Trade Ministry issued in 2015 on the use of letters of credit for exports of specific goods.  The regulation stipulates that exports of commodities, such as mineral, coal, oil and gas and crude palm oil must use letters of credit issued by a domestic foreign-exchange bank — lenders that are allowed by the central bank to perform international transactions.  The government wrote the regulation in an attempt to ensure exporters keep orderly foreign-exchange records.


14 August 2015: Jokowi reshuffles Cabinet in bid to boost economy

Jokowi reshuffles Cabinet in bid to boost economy Published: 4:16 AM, August 13, 2015
JAKARTA — Less than 10 months into his term, Indonesian President Joko “Jokowi” Widodo yesterday fired four Cabinet ministers, including crucial members of his economic team, in a much-anticipated reshuffle that reflected growing frustration with his government’s struggles to improve the country’s sluggish economy. The economy is growing at its slowest pace since 2009, with gross domestic product rising only 4.7 per cent year on year in the second quarter, while the rupiah is at its lowest level against the dollar since the late 1990s. The biggest casualty of the reshuffle was Mr Sofyan Djalil, Coordinating Minister for Economic Affairs, who was replaced by Mr Darmin Nasution, the former governor of Bank Indonesia. Mr Sofyan has been reassigned to the post of Minister for National Development Planning. The post of Trade Minister went to Mr Thomas Lembong, a private investment fund manager, replacing Mr Rachmat Gobel, who had mired himself in controversies. Most recently, Mr Gobel’s decision to slash cattle imports led to beef prices surging, forcing the government to backtrack and increase imports. “Indonesia and the President are aware of a rising negative perception of its trade policies, and Lembong’s appointment is a corrective measure for that,” said Jakarta-based analyst Douglas Ramage. In addition, Mr Widodo appointed Mr Rizal Ramli, who served as coordinating minister for the economy more than a decade ago, as Coordinating Minister for Maritime Affairs, a sector the President is counting on to help his economic turnaround plans....

Editorial: Realigning the economic team The Jakarta Post | Editorial | Thu, August 13 2015; The main message Jokowi conveyed through the realignment of the economic portfolios is the urgent need for strong teamwork. Only with solid teamwork will the government be able to demonstrate how the various individual policies hang together in moving toward the broad direction into which the economy is being steered. Yet more important is that both Jokowi and Vice President Jusuf Kalla must protect the economic team from intervention by vested interests. - See more at:

Jokowi inaugurates six new ministers The Jakarta Post, Jakarta | National | Wed, August 12 2015, 3:47 PM ....

16 July 2015: Jakarta Post Editorial - "righting" a 1999 Forestry Law wrong that has resulted in complaints and large inequalities in landholdings; UOBKH Indonesia 2H2015 roadmap

Khor Reports note: Another VERY important 1999 policy change was that year's Forestry Law. Thus, it was the World Bank / IMF liberalization policy package for Indonesia that helped lay the essential groundwork for the state to promote plantation private sector investment. State Forest Areas was an important move and so was the removal of old low 15-20% ceiling for corporate farm (inti) vs smallholder (plasma). The ratio was reversed to the current 80:20 inti:plasma. No surprise that these key policy changes sparked big FDI and DDI, enhanced by the commodity-biofuels boom. Subsequently, complaints of detrimental impacts to smallholder and indigenous peoples development and large inequalities in landholdings.

Editorial: Tackling inequality, land conflict The Jakarta Post | July 13 2015 | 8:48 AM The business community should not be surprised, nor inordinately worried, about the March regulation of the Environment and Forestry Ministry regarding the reallocation of up to 30 percent of industrial forests and forest concession areas to indigenous people. Rather, business players should have anticipated the regulation after the Constitutional Court’s ruling in May 2013 that the customary forests of indigenous peoples should not be classed as State Forest Areas. The civil society organization for indigenous people’s rights (AMAN) that asked for the juidicial review of the 1999 Forestry Law quoted the government’s own statistics in 2012 that revealed that there were some 32,000 villages whose lands overlapped areas classed as State Forest Areas, as defined in the 1999 Forestry Law....Many companies now own and manage pulp and tree crop (mainly oil palm) plantations ranging in size from a few hundred thousand to one million hectares. We are afraid that if this condition is not gradually corrected, mounting problems of inequality of income, wealth and land conflicts could threaten the long-term sustainability of the plantation industry, even the macroeconomic stability. We believe that harmonious and mutually-beneficial cooperation between big plantations and smallholders is the most effective way of expanding tree-crop plantations such as oil palm and rubber without widening inequality in landholding....

Editorial: Tackling inequality, land conflict | The Jakarta Post

UOBKH STRATEGY - INDONESIA Road Map 2H15 Feedback; RECOVERY IN 2016 ON THE BACK OF GOVERNMENT STIMULUS - Mixed feedback. Our conversations with local and regional fund managers regarding our upgrade on Indonesia received mixed feedback. Some fund managers view that in 2H15, the performances of corporate earnings and the JCI could be better as government spending picks up. Some are skeptical on the execution and currency risk involved in the infrastructure roll-out....
 Large government stimulus translates to earnings growth. Analysing corporate earnings and stock market performance post various stimulus measures in China,Japan, the US and the EU, we found corporate earnings were likely to grow post the stimulus and the respective stock markets should appreciate if the stimulus is larger than 2% of GDP.
     Signs of life in construction. Channel checks with construction companies revealed 53% yoy higher bookings ytd. The latest month suggested a very large pick-up. If this is sustained (especially if the bookings are public-sector projects, we should be positive on the construction sector .....
 Ramping up spending at the Ministry of Transportation. Channel checks with the Ministry of Transportation (MOT) revealed that Minister Ignasius Jonan has pushed for spending from MOT’s Rp60t 2015 budget to be realised at the rate of 15% of budget per month starting 2H15. Despite the slow roll-out due to planning, the MOT revealed that the first route of the sea toll project has started with short sea shipping from Lampung to Surabaya via a regular Roro ferry.....

2 July 2015: Indonesia’s Military Resurgence , shift away from US dollar transaction, Jokowi's feud with Megawati

Indonesia’s Military Resurgence Posted on June 17, 2015By Warren Doull; Jokowi gambles on trading democracy for stability In recent months, Indonesia’s embattled President Joko Widowo has overseen a remarkable resurgence of military power over Indonesian society. Beginning in 1999, the military had been eased out of the dual role of dwifungsi – safeguarding the country against both external and internal threat – but the military now to some extent is resuming it. It has agreements in place to distribute fertilizer to farmers, guard prisons, and assist the national anti-narcotics agency. Talks are underway to also give it a role assisting the Corruption Eradication Commission and the ministries of transportation and fisheries.  “I want the military to be involved more in humanitarian missions in the future,” the Defense Minister Ryamizard Ryacudu said earlier this month. The military even seems to be turning against civil society, conducting a nationwide campaign to tell Indonesia’s youth that Indonesian NGOs and civil society organisations could be vehicles for foreign interests.... Earlier this month, Jokowi even stood by while the corrupt national police asserted their right to ‘help’ select new commissioners for the Corruption Eradication Commission. These concessions have allowed his relationship with PDIP and senior police to remain on manageable terms. In November 2014, Jokowi approved military plans to build two new army commands: one in Papua and the other in Sulawesi.  His concessions to the military are an attempt to befriend an institution that has played a role in the early departures of two previous civilian presidents: Habibie in 1999 and Wahid in 2001. These concessions are also an attempt to empower the military as a counterbalance to the increasingly arrogant police force.....While safeguarding himself against political maneuvers by the military, police force and PDIP, Jokowi has begun to take on other groups. In November 2014, he took on the illegal logging industry, maintaining a six-month moratorium on the issuance of all forest-exploitation permits that began under the previous government. In May, he renewed the moratorium. Also in May, he took steps against Indonesia’s powerful oil mafia via a newly-established anti-energy mafia committee that has succeeded in disbanding three corrupt government institutions: Pertamina Energy Trading Limited (PETRAL) and two of its subsidiaries. ... For reasons either of domestic politics or real conviction, Jokowi has identified new foreign adversaries. He has ordered the burning of encroaching fishing vessels and executed foreign drug smugglers. A decision to ban transactions and invoicing in US dollars is scheduled to come into effect on July 1, expected to cause chaos in the business community. Jokowi has also taken on opposition parties, who said his health cards and smart cards to expand social welfare were insufficiently explained and unclearly financed.....Environmental groups have expressed doubts about Jokowi’s ability to protect forests. Earlier this year, they noted that while rates of illegal logging have declined steadily in recent years, the legalized conversion of forests to plantations for palm oil has gone through the roof. Environmental activists aren’t feeling very safe either, since one was murdered in March 2015 in Jambi province and another in May 2015....

Jokowi’s Feud With Mega Colors Indonesian Politics - The Corruption Eradication Commission is caught in the middle of it by Asia Sentinel Posted on June 22, 2015; Relations between Indonesian President Joko Widodo and Megawati Sukarnoputri, the woman who was instrumental in putting him in power, are continuing to deteriorate, with Megawati’s Indonesian Democratic Party of Struggle (PDI-P) pushing a bill to diminish the clout of the powerful Corruption Eradication Commission and Jokowi saying he has no plans to revise the law governing the commission. Jokowi, the popular former governor of Jakarta and a longtime member of the PDI-P, rode the party’s machinery to victory in the 2014 presidential election over Prabowo Subianto, his opponent.  Today, however, he has little apparent support in the party, few allies in the country’s national institutions and will only need voter support if he runs for reelection in 2019.  The rift with Megawati has been growing for months...In April, at the PDI-P’s party enclave in Bali, Megawati delivered a speech with Jokowi sitting in the audience that in effect told the President  he was a product of the party and that his job was to remain in its service. Indonesia’s system of democracy, she said “regulates that the president and vice president naturally enforce a political party’s policy line,” she said.   She said she had faced “many betrayals,” adding that “multiple times I was stabbed in the back” because of “political ambitions for power.”  It was a humiliating moment. Jokowi was not invited to speak at the congress. She is also said to be angry because the PDI-P was given only four positions in the 34-member cabinet last October – no more than any of the other parties in Jokowi’s coalition....

Jokowi and the mysticism of Indonesian politics - In Javanese belief, Jokowi is seen by many as the messianic Ratu Adil (Just King). Photo: Reuters By Johannes Nugroho Published: 4:16 AM, June 23, 2015; Indonesia, ardent supporters of President Joko “Jokowi” Widodo are having a difficult time acknowledging his blunders. He was, after all, seen by many as the messianic Ratu Adil (Just King), prophesied to usher in a golden age for the country. When the President, better known as Jokowi, nominated police general Budi Gunawan as the sole candidate for the position of chief of National Police, there was a general outcry of disbelief. Given his publicly declared commitment against corruption, the decision came as a surprise, especially as the Corruption Eradication Commission (KPK) had told Mr Widodo the general was under investigation for graft. Criticised for bowing to the pressure from his political patron Megawati Soekarnoputri, chairwoman of the Indonesian Democratic Party of Struggle (PDI-P), the President proved himself willing to compromise his stance on corruption....

27 June 2015: Indonesia May Replace Economics Team, VP Kalla says

Indonesia May Replace Economics Team, Vice President Says - Jusuf Kalla says speeding up spending on stalled infrastructure projects is priority By Ben Otto And Anita Rachman  June 26, 2015 8:41 a.m. ET; JAKARTA, Indonesia—A cabinet shake-up is coming and could bolster the Indonesian government’s economics team as it struggles to reverse a downturn in Southeast Asia’s largest economy, Vice President Jusuf Kalla said Friday. “We’ll change [to create] a better team” after evaluating all ministers, Mr. Kalla said in an interview.  Pressure has been building on President Joko Widodo to shake up his cabinet as his programs to...

26 June update note: Traders point out that new Indonesia levies applies to corporates and NOT smallholders

25 June 2015: Indonesia palm oil - levies for prices below $750 and export taxes if prices exceed $750; Gapki seeks CPO Fund support for replanting efforts as well as biodiesel subsidies and other industry development efforts; acknowledges short-term costs of levies but expects positive effects in one year; Jokowi administration prepares areas for sugar, cattle investors in Eastern Indonesia, but NGOs vow action

 Port infrastructure, replanting issues challenge govt’s CPO push Grace D. Amianti, The Jakarta Post | Business | Wed, June 24 2015; Indonesia, the world’s top palm oil producer, still needs to improve its port infrastructure and boost replanting to increase competitiveness amidst a government push on the major industry, a business group says. The two issues are expected to be addressed by the government’s recent establishment of the crude palm oil supporting fund (CPO Fund), which will collect levies from CPO exporters to be channeled into the development of the industry, as well as biodiesel subsidies, according to the Indonesian Palm Oil Producers Association (Gapki). The business group, acknowledging that the levy will create additional short-term costs, welcomed the government’s funding initiative, as it is expected to develop and improve competitiveness of the industry in the international market.“Infrastructure problems, including industrial cluster ports, have been one of our main concerns regarding our palm oil competitiveness,” Gapki chairman Joko Supriyono said after discussing a road map of the country’s palm oil industry with the Industry Ministry.“We expect that the levy will create positive effects in one year, but on top of that, we also hope that the fund will support replanting efforts, which are currently urgent,” he added.....The levies imposed on palm oil exporters will consist of a US$30 per ton charge on processed palm oil and $50 per ton on crude palm oil, if prices fall below $750 per ton, according to a Finance Ministry regulation.If prices exceed $750 per ton, palm oil producers will continue to pay export taxes of between 7.5 and 22.5 percent, as required by existing regulations. Currently, CPO trades above $670 per ton and its benchmark price fell nearly 15 percent last year. - See more at:

Govt prepares areas for sugar, cattle investors; Grace D. Amianti, The Jakarta Post, Jakarta | Business | Thu, June 18 2015, 9:01 AM;  The government has prepared three areas in eastern Indonesia for new cattle farms and sugarcane plantations, Agriculture Minister Amran Sulaiman said in Jakarta on Wednesday. Speaking after a meeting with the Investment Coordinating Board (BKPM) head Franky Sibarani, Amran said the government had prepared three regions — Southeast Sulawesi, Merauke in Papua and the Aru Islands in Maluku — as the main sites for at least 10 sugar factories and sugarcane plantations for new investors. Amran said his ministry and the investment board would work together to continue removing barriers so that interested investors would be able to realize their investment plans in these two important sectors. He said as many as 26 foreign investors had expressed an interest in developing sugar refineries and sugarcane plantations, while nine others wanted to enter the cattle business. The 26 investors who expressed a keen interest in entering the country’s sugar industry consisted of 11 refined sugar producers and 15 sugarcane plantation companies, Franky said.
“There are also around two to three Japanese investors who are interested in investing in the sugar industry. However, most of the time, in the sugar sector, foreign direct investors choose to first collaborate with their local partners in joint-venture companies,” Franky said. According to his ministry’s calculations, Amran said, a sugar refinery with a capacity to process 10,000 tons of sugarcane per day would cost about Rp 5 trillion (US$374.4 million) to build. The Agriculture Ministry has also run the plan by the Environment and Forestry Minister Siti Nurbaya, who agreed that the land in the three regions would be able to support the industry, Amran added. “We are planning to allocate 500,000 hectares of land in the three regions, calculating that one mill with a plantation will need at least 50,000 ha of land,” Amran said. Aside from the sugar industry, Amran said at least nine foreign and domestic investors also showed an interest in investing in Indonesia’s cattle sector, which would be located in regions such as East and West Nusa Tenggara, Buru Island in Maluku and East Kalimantan. - See more at:

Palm oil isn’t the only junk food ingredient threatening Indonesia’s forests by Margaret Badore (@mbadore) Science / Climate Change June 23, 2015  Much attention has been paid to the role of palm oil the loss of Indonesian forests, but plans for expanded sugarcane plantations are more bad news. Indonesia is among the countries with the highest rates of deforestation in the world. Between 2000 and 2012, over 6 million hectares of primary forests were cut down, according to a study published in Nature Climate Change. Demand for timber and wood pulp is a factor in forest loss, as is conversion of forest to produce agricultural products. Deforestation is a serious threat to the local communities who depend on the forests for their traditional livelihoods. The result is not only a loss of local biodiversity and cultural heritage, but also a large contribution to global warming as the rich carbon sink embodied by natural forests is lost. For many consumers in the U.S. and Europe, palm oil is the commodity of concern, as it's found in everything from cookies to ice cream to shampoo. Forest is regularly cleared to make way for palm oil plantations, which is largely grown for an export market. But last week, the Indonesian government announced that it’s setting aside 500,000 hectares for a different crop: sugarcane. According to The Jakarta Post, 26 foreign investors have expressed interest in sugarcane plantations and refineries, which are planned for three different regions of Indonesia, including the Aru Islands. The announcement goes against earlier government statements, in which the Minister of Forestry announced that sugarcane permits would be cancelled in the Aru Islands, due to unsuitable land conditions. Environmental advocates and indigenous groups have criticized the announcement and vowed to fight it, according to Forest Watch Indonesia, an independent monitoring network....

21 June 2015: Rising unemployment worry for Jokowi - youth unemployment already over 20% in 2013, slow spending on infrastructure and shortage of skilled labour, purchasing power - consumption takes a hit

Rising unemployment piles up problems for Indonesian president - Reuters By Eveline Danubrata and Cindy Silviana 8 hours ago; JAKARTA (Reuters) - Indonesian companies are shedding jobs as they grapple with the weakest economic growth in six years, adding to the troubles facing President Joko Widodo, who was elected last year on pledges to dig the country out of a rut. Government data might suggest no cause for alarm - unemployment was 5.81 percent in February, up only slightly from 5.70 percent a year earlier - but the official numbers are notoriously unreliable and don't adequately cover the informal sector, which is two-thirds of Southeast Asia's biggest economy.
Recent reports of heavy lay-offs across the country paint a bleaker picture, and business executives, recruitment firms and jobseekers say it is getting worse....... Young people are being hit hardest; the International Labour Organization estimated the youth jobless rate was more than 20 percent in 2013, and economists believe it is higher now. About a third of the workforce is aged 15 to 29, a youth bulge that could bring Indonesia, a country of 250 million people, the sort of demographic dividend China and South Korea enjoyed a generation ago - but only if there are jobs for the 2 million people joining the workforce every year. "The government doesn't have a blueprint for labor absorption," said property businessman Hariyadi Sukamdani, chairman of the Indonesian employers' association. ........When he took office eight months ago, Widodo said he would pour billions of dollars into infrastructure and foster growth in manufacturing. But the promised splurge on roads, power plants and ports has not materialized, largely because of bureaucratic hold-ups and land disputes, and a shortage of skilled labor is holding back growth in value-added industries. Miners have been hammered by a double whammy: a ban on mineral ore exports and a sharp drop in commodity prices.
Meanwhile, labor-intensive industries such as textiles and manufacturing have been hit by the rupiah's slide to a 17-year-low, which has raised the cost of imported raw materials ........Unemployment in turn is hitting consumption, which makes up more than half of Indonesia's economy. Automobile sales in May fell 18.4 percent from a year earlier, the ninth decline in a row. "Stocks are piling up because nobody is buying. The people's purchasing power is weak," said Ade Sudrajat, head of Indonesia's textile association. "This has never happened before in the last 45 years.".....At job fairs in Jakarta the gloom is palpable...

16 June 2015: Jokowi's key Econ Coordinating Minister presides over FGV-Eagle High strategic partnership announcement and BLU (new agency) for $30-50/tonne levy targeted at oil palm farmers - growers to support biodiesel segment (and hoping to boost palm oil prices in longer term).

16 June 2015: FGV - Eagle High deal - The Edge reports 23% down payment prior to S&P agreement and Peter Sondakh / Rajawali cash raising and strategic deal witnessed by Sofyan Djalil (Econ Coordinating Minister) and Malayisa MITI's Mustapa Mohamed - Jakarta Globe

Rajawali Piles Up Cash, Gets Ready for More Acquisitions By Vanesha Manuturi on 05:08 pm Jun 14, 2015.... The venture would mark Rajawali’s second sale this year as the group works to focus on its other core businesses: property and mining.... Peter (Sondakh) built his reputation by buying then selling companies with a hefty profit in the past decade. The conglomerate’s most lucrative deals include the sale of Bentoel International Investama for $494 million in 2009 to British American Tobacco. In 2010, Rajawali sold $1 billion worth of shares in Semen Gresik, which it bought from Mexican cement maker Cemex for $337 million in 2006.....The business conglomerate — whose businesses range from palm oil, property to mining — signed an agreement with executives from Felda Global Venture on Friday, witnessed by Indonesia’s Coordinating Minister for Economy Sofyan Djalil and Malaysia’s Minister of International Trade and Industry Mustapa Mohamed.
The acquisition deal is expected to be completed by August
, according to Darjoto. “This strategic partnership is a great collaborative example that is beneficial to both Indonesia and Malaysia,” Darjoto told reporters after the signing event in Jakarta on Friday.

More here:

15 and 10 June: Indonesia delays start date for palm export levy to July 1 - Reuters; new Indonesia agency (BLU) under Office of the Coordinating Economic Minister to be completed for near term start of $20-50 levy; more here:

8 June 2015:  Indonesia Is Using Drones to Catch Tax Cheats 

Indonesia Is Using Drones to Catch Tax Cheats  by Chris Brummittand Herdaru Purnomo June 3, 2015 — 11:00 PM BSTUpdated on June 4, 2015 — 5:04 AM BST  The tax drone cometh. Above the vast forests of oil-palm and rubber trees in Sumatra and the scattered tin mines on islands to its east, the Indonesian government is flying unmanned aircraft to catch cheats who under report the size of their plantations or the extent of their mineral extraction. “Mines and plantations make good profits just taking stuff from nature,” said Samon Jaya, head of the tax office in South Sumatra and Bangka-Belitung islands. “But they don’t pay enough tax. This has to stop.” For Indonesia’s cash-strapped government, policing revenue across a chain of 17,000 islands that would stretch from New York to Alaska is no easy task. Remote areas on the islands of Sumatra and Borneo, where most of the palm oil trees are grown, are difficult to access and the government can’t afford a dedicated satellite or helicopters. Out of a population of 250 million, only about 900,000 Indonesians submitted a tax return last year, and the country’s tax-to-gross domestic product ratio of about 11 percent is below the Asia-Pacific region’s average. Jaya says the mines and plantations in his jurisdiction only pay about 30 percent of the tax they should. The industries, along with the rest of agriculture, forestry and fisheries, account for about a quarter of the nation’s nominal GDP. President Joko “Jokowi” Widodo wants to plug such leaks to help fund a more-than $400 billion infrastructure program. Since he took office in October, Jokowi has offered to exempt citizens from penalties if they settle unpaid taxes. He’s also raised pay for collectors.

28 May 2015: Jokowi wants to lift GDP to 7 percent within five years, in part by cutting logistics costs that account for almost a quarter of the $811 billion economy - $6 billion port revamp - Bloomberg

Sinking Indonesia Docks,  Idle Ships Spur $6 Billion Port Revamp - President Joko Widodo wants to cut logistics costs to drive domestic trade and increase exports  'By'Neil Chatterjee, Fathiya Dahruland Chris Brummitt  May 27, 2015; Jokowi, who turns 54 on June 21, plans to link industrial centers in Jakarta to a new port in the capital by building a road and raising canal bridges to accommodate barges. In January, the government broke ground on a new deep-sea port in Medan on Sumatra. Jokowi wants to start constructing four more ports in October and expects to have finished an offshore project begun earlier at Kalibaru in Jakarta by then. It’s all part of his commitment to drive domestic trade and increase exports of everything from palm oil to cars. “When we have good infrastructure, there’s connectivity from city to city, from province to province, from island to island,” Jokowi said in a February interview with Bloomberg in his office, where he displays a bust of Indian independence leader Mahatma Gandhi. “There is connectivity to ensure that our economy will grow fast.” Jokowi has reason to act quickly. Gross domestic product in Southeast Asia’s biggest economy grew 4.7 percent in the first quarter of 2015, the weakest since the financial crisis. He wants to lift that to 7 percent within five years, in part by cutting logistics costs that account for almost a quarter of the $811 billion economy........

1 May 2015: Trans Sumatra Toll Road (JTTS), the Bakauheni quay and double track railway will support the distribution of logistics for both the agriculture and plantation sectors in all provinces across Sumatra

Trans Sumatra toll road will support logistics: Jokowi Oyos Saroso HN, The Jakarta Post, Bandarlampung | Business | Thu, April 30 2015, 7:51 PM; President Joko “Jokowi” Widodo has said the Trans Sumatra Toll Road (JTTS), the Bakauheni quay and double track railway will support the distribution of logistics for both the agriculture and plantation sectors in all provinces across Sumatra island when the facilities are complete.“Industrial areas around the toll road will develop more significantly. This will support Indonesia’s economic growth,” he said on Thursday.The president was speaking at an event to mark the groundbreaking of the Bakauheni-Terbanggi Besar toll road construction project in Sabahbalau village, Tanjungbintang district, South Lampung.The Bakauheni-Terbanggi Besar toll road is part of the 2,818-kilometer JTTS project. (ebf) - See more at:

28 April 2015: Indonesia’s Joko Loses the Economic Plot  - Asia Sentinel

Indonesia’s Joko Loses the Economic Plot Posted on April 22, 2015; ....President Joko Widodo said Indonesia is “an incredible place to invest” and invited the participants “to join our incredible people on an incredible journey and make incredible profits.” But mounting protectionist policies have ruled Indonesian economic policy for the past several years and they are not going away. Investors complain that it is getting harder not easier to invest in “incredible” Indonesia....... From moves to force banks and other companies to place their data centers onshore to making dollar transactions illegal and even banning the sale of beer in mini markets, a number of often capricious and confusing policies have foreign investors and others wondering if Indonesia wants to withdraw from the world......“I heard a presidential advisor in a top-level meeting say globalization has been bad for Indonesia,” said one businessman with good political connections. “This is being taken seriously.”
The recent decision to ban dollar transactions and invoicing by July 1 is an example. Seemingly designed to shore up the weakening rupiah, trading at lows not seen since 1998, it threatens long-standing contracts, insurance policies and investment tenders. It has businesses scrambling to understand what to do now.  The rupiah is the worst-performing currency in Asia this year, and foreign exchange reserves dropped by almost $4 billion in March as the central bank stepped in to support the rupiah....... Eko Yulianto, acting director of money management at Bank Indonesia, told Reuters that with the new regulation, the bank aims to reduce current demand of at least $6 billion each month for domestic transactions. “We don’t want a dollarized economy so we need to uphold the sovereignty of the rupiah,” Eko told reporters at a briefing...........Other companies worry about a staggering 40 percent target to increase tax collections for 2015 over the previous year. The drive has resulted not in an increase in the small number of Indonesians who actually pay taxes but still more actions against companies who suddenly find routine logistic deductions and other charges denied. In the first quarter, tax collection did not even reach levels from a year earlier........

22 April 2015: Papua food estate project to be revived, Norway PM  - Jokowi stressed environmental commitment, REDD+ program and moratorium extended, recognizes "cultural change" needed to curb deforestation

Govt to revive food estate project in Papua Linda Yulisman, The Jakarta Post | Business | Thu, April 16 2015, 8:03 AM; With its high food self-sufficiency target, the government is considering reviving the stalled “food estate” program of the prior administration by involving private and state-owned companies.The extensive commercial farming will focus on rice, corn and soybean — all are food crops laid out in the self-sufficiency goal, according to State-Owned Enterprises Minister Rini Soemarno. “We will synergize the whole processes from seeding to fertilizing,” she said.State-owned enterprises, such as fertilizer producer PT Pupuk Indonesia Holding Company, seedling company PT Sang Hyang Sri and agribusiness firm PT Pertani, will take the lead in the projects, Rini said.Designed in the early days of Yudhoyono’s administration in 2009, the project was meant to integrate farming and food-based energy generation to replicate the success story of Brazil’s large-scale agricultural projects.... By last year progress had stagnated in the completion of an environmental analysis (Amdel) and in provincial spatial planning, Agriculture Ministry’s director general for agriculture infrastructure and facilities Gatot Irianto told The Jakarta Post.“The stocktaking of customary land is a difficult thing and this must be endorsed further,” he said, adding that he viewed the need to make the planned food estate a special economic zone to enjoy special treatment to enable implementation. Despite the snail-paced progress in the past, Minister Ferry said the planned project could, nevertheless, begin as soon as the second half of this year..... With the strategic location of Merauke near the sea, it will be easy to transport the output to other areas once seaports are established, according to Ferry.Investment Coordinating Board (BKPM) chief Franky Sibarani said the broader Indonesian food sector might receive investments this year, notably from foreign companies.“We’ve heard about interest by American and Japanese firms to invest in growing corn and cassava,” he said.....

Norway PM: Jokowi Stressed Environmental Commitment By Randy Fabi on 06:22 pm Apr 15, 2015; President Joko Widodo welcoming Norwegian Prime Minister Erna Solberg at the State Palace on Tuesday. (Antara Photo/Yudhi Mahatma); Jakarta. President Joko Widodo has assured Norway, which has pledged up to $1 billion in aid to help preserve Indonesia’s forests, that he is as committed to the environment as his predecessor, the Norwegian prime minister told Reuters. Soon after coming into office in October, Joko dissolved the independent National Reducing Emissions from Deforestation and Forest Degradation Agency, merging it with the Environment and Forestry Ministry. That raised concern among green activists that Indonesia might be rolling back on its climate deal with Norway, signed in 2010 by then-president Susilo Bambang Yudhoyono.
“We also have been a bit anxious about whether the new government would continue at the same pace as the old government. I think they are back on track,” Norwegian Prime Minister Erna Solberg said in an interview late on Tuesday after meeting with Joko in Jakarta. Indonesia imposed a temporary moratorium on clearing forests as part of the deal with Norway. A government official said earlier this month the Joko administration would extend the ban. Under the deal, Indonesia will receive payments based on the amount of reduced deforestation. But environmental groups say forest clearing has accelerated due to an expansion in mining and palm oil plantations. “We have become more realistic on how fast you can achieve results,” said Solberg, adding that Indonesia needed “cultural change” to successfully curb deforestation.....

18 April 2015: The race for a slice of China’s manufacturing is part of Indonesian President Joko “Jokowi” Widodo’s effort to reduce the country’s dependence on exports of minerals and palm oil

Is Indonesia the world’s next China? Published: 4:16 AM, April 11, 2015; Indonesia is looking to recreate the success of Shenzhen, the marshy village in southern China that became the heart of that nation’s industrial expansion in the late 1990s. Now China is too expensive for many factories, and industries that poured money into cities from Shenzhen to Shanghai for two decades are looking for somewhere with lower costs and lots of cheap workers.... “The great China boom was really bad for the South-east Asia economies,” said Mr Tim Condon, the Singapore-based head of Asia research at ING Groep. “With the China slowdown, all that moves in reverse. South-east Asia’s manufacturing sector is the big winner, as it was in the early ’90s.”..... That’s created a beauty contest among low-income nations looking to lure investment, including Vietnam with its high-technology parks and the Philippines with its young population and English-language skills. Indonesia’s trump cards are the region’s biggest economy and some of its lowest wages...... Workers in Central Java, the province of 30 million people where Mr Saefullah is fishing, earn as little as 50 cents an hour — less than US$100 (S$136) a month. In the industrial area around Jakarta, they get almost twice that. In Vietnam the minimum monthly wage is US$146, while it’s about US$200 in the Philippines and US$240 in Malaysia...... The race for a slice of China’s manufacturing is part of Indonesian President Joko “Jokowi” Widodo’s effort to reduce the country’s dependence on exports of minerals and palm oil........

12 Mar 2015: Kalla says Indonesian business in forestry now looked on more as public enemies, profiteering form national assets, and people now fight discharge of industrial waste and changing expectations should be reflected in new laws - on forestry, the Jokowi administration seen as taking charge and doing things differently

Tackling haze: Look beyond words to action taken By Simon Tay and Cheong Poh Kwan  Published: 4:13 AM, March 11, 2015; The recurring haze from fires in Indonesia has returned, visibly and early, even if not as thickly as in past years. The politics around the issue may also heat up following a recent comment by Indonesia’s Vice-President Jusuf Kalla.... The respected political veteran last week chided Malaysia and Singapore for overreacting about the haze, largely a by-product of peat fires in Sumatra and Kalimantan. “For 11 months, they enjoyed nice air from Indonesia and they never thanked us,” he was quoted as saying in Indonesian media. “They have suffered because of the haze for one month and they get upset.” His remarks triggered a predictable torrent of criticism on social media and satire websites.... Mr Kalla’s words should be understood in context. The Vice-President was speaking at a ceremony to launch a national programme for judicial reform in natural resources and environmental management last Tuesday.... While he made that comment most likely in response to a question from the press, his key point was on the need to adapt the country’s laws to changing times and public perception, reported Indonesian media such as Kompas and Metro TV....
The Vice-President recalled how Indonesian businessmen were once looked at with pride for being good at exporting the country’s forestry products, but are now often seen as public enemies, profiteering from national assets. Similarly, while people used to see black smoke rising from factory chimneys as signs of progress, they now fight to stop the discharge of such health-threatening industrial waste. Such changing expectations should be reflected in new laws, he said.... The increased attention on this issue is also signalled by Mr Widodo and supported by his Cabinet. The President, a forestry graduate, personally made a high-profile visit to a haze-prone zone in Riau late last year. This followed a petition filed by an ordinary citizen against one of the more controversial concessions in the region. ... Notably, the President’s Cabinet has fused the ministries of Environment and Forestry to seek to balance and align their interests for a more sustainable industry. The new minister, Dr Siti Nurbaya, has won praise for her frequent consultations with non-governmental organisations as well as business groups.  She has also launched a standard geospatial map for use across all ministries to increase coordination in the administration of Indonesia’s forested areas. For Riau, a new forest and land fire mitigation and prevention action plan has also been launched under her watch. Her ministry is also closely monitoring lawsuits brought against forest-burning suspects over the past two years. When a state court recently dismissed charges against a firm in Riau’s Meranti Islands regency, the minister personally challenged the verdict. ... For many long-time observers of the forestry industry, this goes beyond business as usual. The new administration has shown that it is taking charge and is prepared to do things differently.....

28 Feb 2015: Jokowi agenda on rice sector development to see TNI-Babinsa's 50,000 force deployed as quasi-agricultural extension officers but it could mean a lot more

A very fascinating move. Sounds like it could immediately help strengthen Jokowi's position in Indonesia's high politics? Close observers have been noting his recent political shifts as seeking more independence of his party sponsors. He clearly a lack of a party political machinery of his own. Would Jokowi have a strong sway over the TNI-Babinsa's 50,000 force? I recall some consider Indonesia military-linked enterprises to be among the biggest business groups in the country. The new presence in agriculture of the TNI-Babinsa's 50,000 personnel as an agricultural extension force will be something to keep in view. It could be a new player who will directly / indirectly affect rural power relations in various geographic and crop sectors, with a key target on rice. It is notable that nearby Malaysia's rural political history clearly attests to the importance of rural development administration agencies, political and/or state-linked NGOs in electoral politics*. Thus, we need to look at the current state of Indonesia's rural politico-administrative organisations and NGOs and how TNI-Babinsa will be positioned and funded. How will a stronger military-SOE (state owned enterprise) and rural administration role eventually even touch on other key rural interest group including palm oil smallholders? This sector's farmers are likely relatively more well-off than the average rice farmers, but may still be keen on extension services to improve yields, and may need assists in certification to ensure international market access (which is being challenged via regressive - higher cost to small farmers - de facto international sustainability trade voluntary deals).
Note: *"The Political Tussle Over Felda Land Schemes" by Khor Yu Leng "During the run-up to GE13, key PAS personnel and the UMNO Information Chief Datuk Ahmad Maslan have estimated (without disclosing their estimation methods) the FELDA voter support for UMNO at 70%–90%, while UMNO hypothesises that most PAS supporters emerged when PAS was a member of BN (New Straits Times, 2010). The activity and strength of UMNO linked non-governmental organisations (NGOs) in the social sphere among FELDA areas has been cited as a reason for PAS's inability to increase its voter base (New Straits Times, 2010): If PAS has Anak to help champion its cause, UMNO has several non-governmental organisations, such as Gabungan Wawasan Generasi FELDA (GWGF) and Majlis Belia FELDA Malaysia (MBFM), on its side. MBFM has been very active in all 54 parliamentary constituencies covering FELDA settlements since the last general election. It boasts of about 100,000 members and organises mostly social and sports programs..."

Jokowi’s Food Sovereignty Narrative: Military in the Rice Land? By Jonatan A. Lassa and Adhi Priamarizki RSIS Commentary No. 040/2015 dated 27 February 2015; THE INDONESIAN government is moving quickly to create a big impact in the agricultural and food sectors. Framed within a strong food sovereignty narrative, President JokoWidodo is now imposing two big agendas for the rice sector’s development. The first is to boost rice production to achieve 100 per cent self-sufficiency. The second is to graduate from 100 per cent rice self-sufficiency to be a rice exporting nation in the near future...... To achieve these targets, the Ministry of Agriculture (MoA) recently planned to re-utilise the military’s (TNI) civic mission (TNI Manunggal Masuk Desa) through the Village Supervisory Non-Commissioned Officers (Babinsa) as quasi-agricultural extension officers. Amran Sulaiman, the minister argued that “50,000 Babinsa across the country would be a big help to cover the deficit of 20,000 agricultural extension officers (AEOs)”. In the past, this was largely inspired by security concerns (such as controlling communism and farmers’ movement)..... Jokowi’s food sovereignty concept has its origin in the global farmers’ movement which allowed farmers to have greater autonomy and control over their own affairs based on their own decisions. In fact, food sovereignty is a rather ‘leftist paradigm’. The military’s recent interest in backing up Jokowi’s agenda could be justified by their interest in controlling the implication of food sovereignty on the farmers’ movement.... One can therefore question why and how the government’s involvement of the military in boosting agricultural production as a temporary solution to quicken the achievement of rice production targets amid the lack of AEOs. Some concerns remain as this policy may have long term implications. Firstly, one may question the urgency, effectiveness and value added of the military involvement in entering the rice field.... Secondly, the military presence may affect civil society’s role in agriculture because their involvement may discourage the genuine participation of farmers. Even though agriculture work can be classified under military operations other than war, the government should be able to explain the urgency of the military’s involvement in the food sector. This can be counter-productive for food production. A decline in public trust in Jokowi’s administration can dramatically accelerate.....

24 Feb 2015: Jokowi political and police-KPK tussles? Jokowi tax amnesty offer and commodity export LC requirement to shift money flows and expand Indonesia capital market; Singapore observation; firm stance on drug executions
Just over a week ago, we managed to catch up with one of our contacts who's a Southeast Asia business development specialist and very familiar with the Indonesia political-economy. Interesting feedback on the Jokowi attempted political shifts vis-à-vis his sponsor party; and also the talk on his relative political and advisor isolation given that he is an outsider, with no grassroots party of his own. There is also news on possible police-KPK tussles.
On the news front, more interesting policy commentary on shifting regional trade bookings and money flows. The April policy on LCs for key commodity exports hopes to clamp down on transfer pricing and bookings in tax-friendly trading centers. The new policy (reported early Feb) to help bring more money back to Indonesia is a tax amnesty. The question is how Indonesia businessmen and businesses respond to these policies (even if partially) and how it will inject more activity into Indonesia's banking sector and domestic investments. Policy moves to develop Indonesia's own capital markets, investment and value-add are to be expected. A shift of money from Singapore could be significant - back in the early 2000s when I was doing market sizing work in the private banking / wealth management sector there, it was frequently said that perhaps half the money was from Indonesia. The LC and tax amnesty issues are relevant for many in the Indonesia palm oil sector.
Over the last few weeks, at visits in Singapore, the gloom among staffers we met in the financial sector was palpable. Worries of business volumes and also the chatter about the many firings going on - from an international bank closing its Asia equity business, to a Malaysian investment bank with a big expenditure cutting plan and more. This seems to link up with the commentary below (see investor newsletter The New World) on slowing Singapore growth and the relative outperformance of the markets in its client-neighbours. Singapore has also been boosting its gaming and property sectors ever since the launch of its two casinos. We happened to speak to an analyst who covers the gaming sector - he noted that the Macau and Singapore gaming stories may be over with the China anti-corruption clampdowns. Over the Lunar New Year long weekend, a friend who has been based in Beijing for many years reported that while we may read of big political names being caught, the international audience may be missing the news on the many corporate players including retired managers being caught. China's anti-corruption drive is serious. Meanwhile in Singapore, we also hear from investors in the high-end sector there that prices and rentals may have fallen some 40% off the peak. It may seem a bit odd for this blog to dwell a bit on Singapore issues, but a lot of the regional commodity folk spend some time there.
News and commentary links:
Indonesia’s new tax law is bad news for Singapore From Lars Henriksson, in Bangkok, The New World newsletter; 23 February, 2015; Indonesian president Joko Widodo isn’t going to be very popular in Singapore right now....  He’s recently announced plans to introduce a tax amnesty for Indonesians in a bid to lure investors and companies back to the country. The nuts and bolts of it is that money kept in Singapore and other offshore countries could be repatriated to Indonesia without paying tax on it. It’s part of President Widodo’s plan to increase Indonesia’s GDP from about 5% to 7%. To make that a reality, a lot of capital is needed to build ports, railways and industrial estates and this tax amnesty plan is just one of several ways Widodo is planning to raise funds...  It’s great news for Indonesia but bad for Singapore....Its success came from its popularity as a trading hub. Natural resources were either shipped or traded through Singapore to buyers elsewhere. Singaporean entrepreneurs were able to profit from this and Singapore established itself as the middleman of Southeast Asia.... For decades, countries like Indonesia, Malaysia, Philippines and Thailand have lagged Singapore in trading and services, But I think the gap is narrowing, making it tougher for Singapore to continue its economic growth model.... Official statistics bear out this view....  Since 1976, Singapore has registered an average GDP growth of 6.9%. In the 4Q14, GDP dropped to a pedestrian 2.1% (2.9% for whole 2014).... The Ministry of Trade and Industry forecasts 2%-4% GDP growth in 2015. Even if they are proven right (too bullish in my view) it would mean that Singapore is still slowing down massively.... Meanwhile, Indonesia, Malaysia and the Philippines have generated positive returns since November 2010 but they have also outperformed Singapore....

Jokowi plans tax amnesty to lure cash back - Money repatriated to Indonesia will not be taxed, companies will get tax break; 7 Feb 5:50 AM

Tax reform under Jokowi’s platform Adri AL Poesoro, Jakarta | Opinion | Mon, July 21 2014, 10:17 AM - See more at:
New police detectives may hamper KPK investigations Haeril Halim and Margareth S. Aritonang, The Jakarta Post, Jakarta | Headlines | Mon, February 23 2015, 5:58 AM; Doubts have mounted over the Corruption Eradication Commission’s (KPK) future commitment to pursuing high-profile cases following a plan to assign new police investigators to assist the antigraft body at the request of its new leadership.Antigraft campaigners have voiced pessimism over the future of high-profile graft probes under the leadership of acting chairman Taufiqurrahman Ruki and acting deputy chairman Indriyanto Seno Adji because of perceived potential conflicts of interest in a number of cases being investigated by the KPK....
Other news

Indonesia says executions won't be delayed despite mercy pleas By Kanupriya Kapoor Tue Feb 24, 2015 2:55am EST; Feb 24 (Reuters) - Indonesia's president said on Tuesday the planned execution of 11 convicts on death row, most on drugs charges, would not be delayed, warning foreign countries not to intervene in his government's right to use capital punishment.... President Joko Widodo has denied clemency to the convicts despite repeated pleas from Australia, Brazil and France, who have citizens due to be executed by firing squad.... "The first thing I need to say firmly is that there shouldn't be any intervention towards the death penalty because it is our sovereign right to exercise our law," Widodo told reporters.... "We plan to appeal today's court decision. We have two weeks to file an appeal," said Todung Mulya Lubis, a lawyer for the two men... "If the law is respected, the execution should be postponed until the legal process is over."... Australia has been pursuing an eleventh-hour campaign to save the lives of Myuran Sukumaran, 33, and Andrew Chan, 31, two members of the so-called Bali Nine group of Australians, convicted in 2005 as the ringleaders of a plot to smuggle heroin out of Indonesia.... Shortly before Widodo spoke, a court in Jakarta threw out an appeal by the two Australians against Widodo's rejection of their request for presidential clemency....

14 February 2015: Jokowi wants to soon stop the sending of domestic migrant workers to other countries; he felt "ashamed when discussing the matter in [recent] bilateral talks with Malaysia... We must have pride and dignity"

Jokowi to halt the sending of domestic workers abroad The Jakarta Post, Jakarta | National | Sat, February 14 2015, 12:36 PM; President Joko "Jokowi" Widodo wants to soon stop the sending of domestic migrant workers to other countries, arguing that doing menial chores abroad undermines Indonesian pride and dignity. Jokowi told the Antara news agency on Friday in Surakarta, Central Java, that he felt "ashamed when discussing the matter in [recent] bilateral talks with Malaysia. I have instructed the manpower minister to make a clear road map and [set a timeline] to stop the program. We must have pride and dignity." As part of the plan, the government would repatriate 1,800 migrant workers. "We have repatriated 800 workers. More will follow suit," Jokowi said. There are some 2.3 million Indonesian migrant workers worldwide, 1.2 million of whom were undocumented, according to the president. - See more at:

4 February 2015: Jokowi talks about dangerous inequality, increasing tax collection and tax payer base, promise to ease land acquisition for infrastructure, one-stop centers for business permits, state-owned plantation ordered to release land for port-industrial project, creation of single map to prevent overlapping land concessions

Bloomberg - ‘Dangerous’ Inequality Spurs Widodo’s Indonesia Shakeup by Neil Chatterjee, Yudith Hoand Chris Brummitt, 6:01 AM BNT,  February 3, 2015; A “dangerous” level of inequality threatens the world’s fourth most-populous nation, said Indonesian President Joko Widodo, who took power in October after beating a former army general. “Economic growth is very important for my administration, for my people but it’s more important to narrow the gap,” Widodo, known as Jokowi, said Monday in an interview at the presidential palace in Jakarta. “When we invite investors they must give benefit to my people. Also to my country.”... Jokowi, less than four months into a five-year term, said a key initiative will be to expand tax receipts, boosting them to 16 percent of the economy from less than 12 percent now. The leader, 53, underlined his confidence in boosting growth to 7 percent and described a policy program centered around holding government officials to account for impeding investment. ... Record buying by global funds sent the Bloomberg Indonesia Local Sovereign Index of government bonds up the most in more than a year last month, amid optimism Jokowi’s fiscal reforms will improve the nation’s credit quality. The benchmark Jakarta Composite Index of stocks has climbed more than 4 percent since Jokowi’s Oct. 20 inauguration, outperforming markets in Malaysia, Thailand and Vietnam.... Bureaucratic Bottlenecks: While total investment rose more than 14 percent last quarter from a year before and reached 463.1 trillion rupiah ($36.5 billion) in 2014, the nation with the world’s largest Muslim population will need more than $430 billion over five years to build transport links and other infrastructure, according to government estimates....
The economic dividends from Jokowi’s changes may take a while. The economy probably grew 5.1 percent in 2014, a five-year low, according to official estimates.... Freeing Land: The administration has promised to ease land acquisition to spur infrastructure projects, including buying land and establishing a land bank managed by different ministries. Jokowi also began a national one-stop service to coordinate the approval of business permits from more than a dozen agencies. Regional authorities who don’t set up a similar service in their cities or provinces this year will have funding cut, he said.... The president said he ordered a state-owned plantation company to release land for a port and industrial zone project that has been stalled for eight years. He’ll also create a single map to be used by all provinces to prevent overlapping land concessions, and is encouraging state-owned companies to issue bonds to increase financing for infrastructure.....

28 January 2015: Jokowi kicks of North Sumatra projects to be completed in 2 years - Kuala Tanjung Port, KT-Sei Mangkei Integrated Industrial Zone, Sei Mangkei power transformer, 600,000 tonne cooking oil plant

Jokowi kicks off 7 projects in N. Sumatra Apriadi Gunawan, The Jakarta Post, Kuala Tanjung, North Sumatra | Headlines | Wed, January 28 2015, 8:03 AM ; President Joko “Jokowi” Widodo officially announced the commencement of seven strategic projects located in a number of regions in North Sumatra, via a teleconference at Kuala Tanjung Port in Batubara regency on Tuesday.The projects comprise Kuala Tanjung Port, an aluminum smelter at state-run PT Inalum, the Kuala Tanjung-Sei Mangkei Integrated Industrial Zone, state power company PT PLN’s Sei Mangkei power transformer, the 600,000-ton capacity Sei Mangkei cooking oil plant, the Sei Mangkei Special Economic Zone (KEK) and the 17-kilometer Medan-Binjai toll road. Jokowi said all projects should be completed in two years. - See more at:

18 January 2015:   upgrade to the north-south Trans-Sumatra Highway, national “smart cards” to more than 15 million poor Indonesian families

For Indonesians, President’s Political Outsider Status Loses Its Luster By JOE COCHRANEJAN. 17, 2015... Perhaps his most contentious proposal was the elimination of fuel subsidies which, popular with voters and politicians, cost the state tens of billions of dollars a year, more than the government spends on health care and social services combined. His predecessor had tried to kill the program and failed.... He was able to eliminate the gasoline subsidy this month and, in a remarkable sleight of hand, lower fuel prices at the pump on the same day. The wild card that allowed that to happen was plummeting world oil prices.The change freed up money for his ambitious social programs. His government, as promised, mailed out national “smart cards” to more than 15 million poor Indonesian families in November, entitling them to free health insurance and education-related expenses for their children for up to 12 years of school..... He has also rolled out grand infrastructure plans for 2015, including 13 new dams and a long-overdue upgrade to the north-south Trans-Sumatra Highway.
The smart card program, especially, is already winning praise from needy families, said Wardah Hafidz, founder of the Urban Poor Consortium, a Jakarta-based nongovernmental organization.... “People are happy about it because it’s very different than before, when it was difficult to get health treatment, or people had to pay or were being turned away from public hospitals,” she said. “People are watching, people are commenting on the program, they are active. It’s hopeful.".... On Friday, The Jakarta Globe, a leading English-language daily, published a full-page photo on its front showing Mr. Joko bowing to Ms. Megawati with the headline, “End the Kowtowing.”.........

14 January 2015: National police nominee gets KPK warning, but removal of fuel subsidies seen as "breaking the back of the country's notorious Oil Mafia"

100 Days of Indonesia’s Jokowi: Mixed Record by Dewi Kurniawati TUE,13 JANUARY 2015
Indonesian President Joko Widodo, who came into office on Oct. 20, ends his first hundred days in office next week with a record more mixed than his most enthusiastic adherents had expected when he was elected... Jokowi, as he prefers to be known, has earned domestic criticism through some suspect cabinet appointments, raising questions whether he is able to stand up to Megawati Sukarnoputri, the former president (2001-2004) and head of the Indonesian Democratic Party of Struggle, which sponsored his electoral campaign.... The nomination of Megawati’s former adjutant, Budi Gunawan, as head of the national police has turned into a major embarrassment, with the Corruption Eradication Commission (KPK) charging the official with bribery when he was head of the career development bureau at the National Police headquarters from 2003-2006.... But Jokowi has won praise from economists for doing away with fuel subsidies, which had the corollary effect of breaking the back of the country’s notorious Oil Mafia.  He has served notice internationally with a new strong maritime policy that has resulted in the spectacular sinking of Vietnamese fishing boats that intruded into Indonesian waters. The policy was given prominence in his inaugural address and again in mid-November that he intends to make his nation into a regional maritime power..... The move to eliminate the subsidy is said to have surprised the oil mafia, a shadowy cabal that profited from importing 500,000 barrels of oil per day from offshore sources, reportedly costing the government as much as US$5 billion annually. The oil mafia is said to include even members of Jokowi's PDI-P, as well as officials of Golkar and Yudhoyono’s Democratic Party. Political sources describe the system as a funding mechanism for powerful political parties and a route to vast wealth.
Reportedly the top figures in the oil trading business have been told that the party is over and there will be no more skimming from imports. Officials close to Jokowi say they have warned top figures of the oil business it is time to quit. Getting them out is regarded as the key to breaking the stranglehold on imports....

13 January 2015: Indonesia revamps to lower fuel cost, accelerated reforms to come; Jokowi has neutralized political opposition

Khor Reports comment: Plantation analysts remain concerned about the non-viability of palm biodiesel at the current prices. This affects the significant voluntary blending market as well as concerns about the usage in countries with soft mandates such as Indonesia; where it is also fighting to reform its energy sector to bring down spending on energy to free up money for investment in infrastructure. At the same time, Indonesia seems to be pushing on bureaucratic reforms and anti-corruption moves in the agro forestry sector as well as in aviation which recently suffered the Air Asia QZ8501 disaster. The Jokowi-JK presidential election manifesto also talks about the reorientation of economic gains in its biofuels sector to ensure gains for farmers. All in, several challenges issues for Indonesia biodiesel?

Note comment from FT: "...surpassing investor expectations in his first three months by abolishing $18bn of wasteful fuel subsidies and neutralising political opposition in the fractious parliament..."

Widodo’s Next Hurdle: What Indonesia Can Tackle Post Fuel Revamp By Chris Brummitt  Jan 13, 2015 1:12 AM GMT+0800; The opening salvo in Indonesian President Joko Widodo’s bid to revitalize Southeast Asia’s biggest economy was a revamp of the country’s energy sector. His next hurdle is delivering the gains from the shake-up.... In his first three months in office, Jokowi, as the leader is known, freed up 230 trillion rupiah ($18 billion) of budget funds for development by scrapping gasoline subsidies and capping government aid on diesel. He also moved to plug revenue leaks and improve efficiency in the energy industry, changing the management of the state oil company as well as setting up an oil and gas reform team.....

[these comments and links will be replicated in our biodiesel blog posting - read more here: /khorreports-palmoil/2014/07/biodiesel-news-update-5.html]

Indonesia’s Joko Widodo pledges to accelerate reforms 5:08AM by Ben Bland in Jakarta
Indonesian president Joko Widodo has vowed to accelerate economic reforms after surpassing investor expectations in his first three months by abolishing $18bn of wasteful fuel subsidies and neutralising political opposition in the fractious parliament.... When asked whether he could sustain the pace of change, Mr Widodo traced an exponential growth curve with his index finger, saying: “it will be like that”.... The president — who is universally known by his nickname Jokowi — said he would use the fuel subsidy savings to pump billions of dollars into infrastructure investment and push for “total reform” of the aviation sector following the shortcomings highlighted by the AirAsia crash.... But the 53-year-old has moved quietly to stifle his critics by appealing to key opposition politicians and the public. Several opposition parties, including the largest, Golkar, have become mired in internal disputes after senior leaders switched allegiance to Mr Widodo.... Mr Widodo will channel the Rp230tn ($18bn) of savings into infrastructure and social protection, reversing years of under-investment that have hobbled economic growth and left Indonesia with the highest rate of wealth inequality in Asia after China.... The depth of the problems afflicting the civil service has been underlined by the crash of AirAsia Flight QZ8501 en route from Surabaya to Singapore, which revealed worrying flaws in aviation regulation.... Facing his first major crisis as president, Mr Widodo said the government must use the crash as an opportunity “to totally reform our air transportation”, from the central government to the state-owned airport operator and air traffic control service....

12 January 2015: Palm oil company crackdown continues, tycoon arrested after 5 day hunt with police coordination; after Riau agroforestry audit will be Central Kalimantan audit

Police arrest Kalimantan palm-oil tycoon Budiono Tan The Jakarta Post, Jakarta | National | Mon, January 12 2015, 9:38 AM; The West Kalimantan Police have arrested palm-oil tycoon Budiono Tan, who allegedly misappropriated 1,535 land certificates of oil-palm farmers in Ketapang, West Kalimantan. The businessman, who runs a plantation through PT Benua Indah Grup (BIG), was caught on Friday night in West Jakarta after being sought for five years.... He is currently in the process of being transferred from Jakarta to Pontianak, West Kalimantan, for prosecution. Budiono was placed on the police’s most-wanted list in 2009 after committing fraud and embezzling money from hundreds of oil-palm farmers who worked for BIG. But his case was abandoned when he allegedly obtained strong support from police officers..... The latest hunt that involved the joint police team was started on Jan. 7. A team of seven police officers was deployed to check potential hiding places for Budiono.... Budiono was reported to the police in July 2009 for embezzling Rp 300 billion from the farmers. The money was supposed to be paid to the farmers for harvests during the year as well as the farmers’ savings. Budiono has been charged with embezzlement and fraud... The West Kalimantan Police have admitted that the case is hard to resolve due to intervention from “certain groups”.... Since 2012, the ministry has investigated and filed lawsuits against a number of plantation companies... Last year, Meulaboh District Court found PT Kallista Alam guilty of burning peatland in the Leuser conservation area in Nagan Raya regency, Aceh, and ordered the firm to pay a fine of $30.5 million.... The year also saw PT ADEI Plantation & Industry... After auditing agroforestry companies in Riau, the government has planned to run its next audit in Central Kalimantan.....

Indonesia’s post-Lima homework Warief Djajanto Basorie, Jakarta | Opinion | Sun, January 04 2015, 2:51 PM; ....An early directive from Siti Nurbaya Bakar, the new Environment and Forestry Minister, is to place a 6-month moratorium on new logging licenses. On a Nov. 26 visit to Riau, a province ravaged by peat fires early in 2014, Jokowi ordered a review of the permits of firms that converted peatland to oil palm and acacia plantations. In Meranti Island district, he ordered the damming of canals to restore moist peatland. Drained peatland converted to oil palm estates becomes brittle-dry peat and is vulnerable to fire. Any new low-carbon growth strategy would have to factor in commitment by major planters to practice zero-deforestation palm oil.....

11 January 2015 (evening): Indonesia boosts bilateral and maritime doctrine in high profile foreign policy; not supportive of AEC if it merely opens up Indonesia as market for ASEAN neighbor exports

Jokowi preparing Indonesia for role beyond Asean? by Emirza Adi Syailendra,  RSIS January 10, 2015 1:00 am; Under President Joko Widodo (Jokowi), foreign policy appears to be increasingly high profile as Jakarta seeks to tighten bilateral relations with Pacific and Indian Ocean major powers, with a heavy focus on the domestic-economic dimension. This is in opposition to the focus on multilateralism and norms promotion that were stressed during Yudhoyono's administration. How would Asean be positioned under the Jokowi government's foreign policy?... As Indonesia's global profile rises, the choices of partners are expanding but doubts have also resurfaced on whether Asean is still the bedrock of its foreign policy. With foreign policy given a high profile - in contrast to earlier predictions by some analysts that President Jokowi would be more inward-looking - it is tempting to argue that Indonesia's foreign policy priorities are shifting beyond Asean..... For example, Jokowi's new maritime doctrine of "global maritime fulcrum" has highlighted Indonesia's intention to 'Look West' in terms of deepening relations with major players in the Indian Ocean such as India and South Africa. Strengthening bilateral ties with Pacific powers is also becoming a major agenda instead of multilateralism. The emergence of a more nationalistic approach has further underscored these shifts..... According to Retno Marsudi, the new foreign minister, the current policy focus would be people-oriented. This statement was echoed by Jokowi during a discussion on the implementation of the Asean Economic Community (AEC). The president said Indonesia would not be supportive of the AEC's goal of a single market and production base by end 2015 if it puts Indonesia at a disadvantage by merely being a market for goods produced by neighbouring countries. Several other policies such as the sinking of the illegal fishing vessels in Indonesian waters have been interpreted as signals that Indonesia would not hesitate to defend its national interest at the expense of Asean
The point to stress here is that Indonesia's proactive and consensual leadership in Asean will endure during Jokowi's administration. However, pragmatism will be its defining feature. A recent effort by Indonesia to push Asean as the centre of the regional architecture was its proposal to expand the Asean Chiefs of Defence Forces Informal Meeting (ACDFIM) into an ACDFIM Plus that includes counterparts from key players like the US and China in the Asia-Pacific. The proposal underscores the interest of Indonesia to expand the scope of Asean into a more inclusive and accessible forum extending to major Pacific and Indian Ocean countries.... With the present security environment in the region marked by many flashpoints, exacerbated by external pressures arising from the US-China rivalry, Indonesia is concerned about Asean's ability to speak with one voice. Considering that the benefits Indonesia gains depends on how effective it is in rallying Asean, a break in Asean unity will have implications on Indonesia's image as the first among equals.....

11 January 2015: REDD+ agency future is in doubt? Forestry Ministry finds better business and public awareness of state environmental standards, while Greenpeace points to over 15,000 fire hot spots in 2014 versus under 6,644 in 2011 across Riau.

After only one year, REDD+ agency future is in doubt by Hans Nicholas Jong, The Jakarta Post, Jakarta | Headlines | Sat, January 10 2015, 9:48 AM. The future of the National Reducing Emissions from Deforestation and Forest Degradation Agency (BP REDD+) has become uncertain after only one year because of a plan from the Environment and Forestry Ministry to liquidate it.BP REDD+ head Heru Prasetyo said on Friday that he was concerned about the plan from Environment and Forestry Minister Siti Nurbaya Bakar to merge the agency with the ministry, which she is currently restructuring. - See more at:

As Indonesia’s Forests Burned, No End in Sight to Infernos - Seventy percent of 1,908 companies under the Forest Ministry’s supervision are said to be committed to complying with state environmental standards; By Kennial Caroline Laia on 02:08 am Dec 30, 2014; JAKARTA — The slash-and-burn clearing of forests to make way for plantations topped Indonesia’s list of environmental problems this year, with several major forest and land fires in Sumatra once again undermining the country’s fight against deforestation while generating choking clouds of smoke that left local residents ill and prompted the ire of neighbouring countries.....The Indonesian office of international environmental group Greenpeace said the number of fire incidents over the past few years has continued to increase in Riau, a Sumatran province at the centre of major forest and land fire incidents in Indonesia in recent years......Greenpeace Indonesia forest campaigner Muhammad Teguh Surya said a total of 6,644 hot spots were detected across Riau in 2011 and the figure has continued to rise, with 8,107 hot spots detected in 2012 and 15,112 last year...... “As of October this year, we recorded more than 21,000 fire hot spots,” he told Indonesian news portal earlier this month......Agency spokesman Sutopo Purwo Nugroho has highlighted the need for better law enforcement. In the wake of the peak of the fire and haze incidents in the first quarter of the year, the police arrested dozens of people for allegedly starting the blazes, but law enforcement in the sector has generally been considered toothless, with security officers criticised for only nabbing small-scale farmers and barely going after the large plantation companies in whose concessions many of the hot spots are located...........Agency spokesman Sutopo Purwo Nugroho has highlighted the need for better law enforcement. In the wake of the peak of the fire and haze incidents in the first quarter of the year, the police arrested dozens of people for allegedly starting the blazes, but law enforcement in the sector has generally been considered toothless, with security officers criticised for only nabbing small-scale farmers and barely going after the large plantation companies in whose concessions many of the hot spots are located...... However, Mr Rasio Ridho Sani, a deputy to the Environment and Forestry Minister, argued that Indonesia had made significant improvements in the environmental sector, citing growing environmental awareness among logging, plantation and mining firms operating in forests...... He said 70 per cent of the 1,908 companies under the ministry’s supervision were committed to complying with the government’s environmental standards. The figure is an increase from 49 per cent in 2004. “This means the environmental awareness of the business community has increased. And we hope that the number will stay that high and increase even further,” Mr Rasio said......He added that the public’s awareness about environmental issues was also improving, citing how more people were starting to cycle to work and were committed to recycling their waste as part of a greener lifestyle......

12 December 2014: Peatland for community sago instead of oil palm plantations?

Swift action on forest fires by President Jokowi by Wimar Witoelar, Jakarta | Opinion | Thu, December 11 2014, 10:04 AM; On Nov. 27, in the Riau Islands province, President Joko “Jokowi” Widodo studied the dried peatland and man-made canals that locals were building to prevent the further drainage of precious water in the peat. He held impromptu talks with victims of peat-based forest fires. The President made some announcements off the cuff. Obviously he had thought about the issues for some time... President Jokowi said plantation permits had to be reviewed if they were indeed destroying the ecosystem; they would have to be terminated. “We must not allow our tropical rainforests to disappear because of monoculture plantations like oil palm,” he said.... In his remarks in Sungai Tohor, the President described the community-built canal dams as very good and that they must be made permanent. He further said it was best for peatland to be given to the community to be managed for sago....

10 December 2014: Jokowi orders review of licenses of all plantations that have plantations on peatland

Indonesia’s New President Promises to Put Peat Before Palm Oil By Jeff Conant, From Inter Press Service News Service; December 5, 2014; Jakarta: "Last week, Indonesia’s new president, Joko Widodo, ordered the country’s Ministry of Environment and Forestry to review the licenses of all companies that have converted peatlands to oil palm plantations.... If the ministry follows through, this will be one of the most important actions the Indonesian government can take to begin truly reining in the destruction reaped by the palm oil industry there – and to address the severe climate impacts of peatland destruction.... The Indonesian Forum on the Environment, known as WALHI/Friends of the Earth Indonesia, has been pushing for this initiative, and the announcement was made in the village of River Tohor, in Riau Province, where WALHI has long worked with the community.... Walhi had invited Jokowi, as the president is casually known, to come to Riau because the province is ground zero for Indonesia’s massive haze crisis that comes from the near-constant burning of carbon-rich peatlands in order to convert these fragile ecosystems to plantations.
“We invited him to River Tohor to demonstrate the community’s success in preserving the peat forest ecosystem,” said Zenzi Suhadi, forest campaigner for Walhi. “We hoped this visit would show the president that community management can protect forests, and that granting concessions to companies is the wrong approach,” Suhadi said. The strategy appears to have succeeded, as Walhi hailed President Jokowi’s Riau visit as proof of his commitment to solving ecological problems..... “The best thing to do is to give the land to people,” the president told The Jakarta Globe. “What’s made by people is usually environmentally friendly. They won’t do any harm to nature. However, if we give the land to corporations, they will only switch it to monoculture plantations.”...... Jokowi’s move came shortly after his government announced a four- to six-month moratorium on all new logging concessions. That prohibition goes beyond the 2011 nationwide moratorium on new concessions across more than 14 million hectares of forests and peatlands... The move also comes on the heels of Jokowi’s announcement that the Ministry of Forests and the Ministry of Environment would be combined into one ministry, headed by Siti Nurbaya – a move that not all see as positive but that does signal a radical effort to restructure the way the government manages lands and resources.... Jokowi has also pledged to clean up Indonesia’s notoriously corrupt forestry sector as a step toward reducing deforestation....

19 November 2014: Jokowi talk to President of European Council on export barriers to palm oil

Govt asks EU to ease RI palm oil export by Hasyim Widhiarto, The Jakarta Post, Jakarta | Business | Wed, November 19 2014, 5:44 PM; "Indonesia, the world's largest producer of palm oil, has asked the European Union (EU) to ease its regulations on palm oil imports, mainly to help Indonesian farmers enjoy benefits from the exportation of palm oil.... In a meeting with the President of the European Council, Herman Van Rompuy, on Wednesday at the Presidential Palace, President Joko "Jokowi" Widodo personally asked the EU's principal representative to ease the export barriers for its palm oil products in the bloc's 28 member countries.... Van Rompuy said that he would take Indonesia's request as "the council's concern", according to Foreign Minister Retno LP Marsudi, who accompanied Jokowi during the meeting... The EU is the Indonesia's third largest trading partner and the second largest foreign investor after Japan...."

17 November 2014: EU palm oil market access, strategic sectors of EU-Indonesia trade, assertive foreign policy approach?

Jokowi explores cooperation in fashion industry with Italy BY Rendi A. Witular, The Jakarta Post, Brisbane, Australia | World | Sat, November 15 2014, 12:13 PM; "President Joko “Jokowi” Widodo told his counterpart Italian Prime Minister Matteo Renzi in a bilateral meeting on Saturday ....“I also demanded that Italy and the European Union provide easier access for our palm oil into their market,” he said...."

EU offers RI chance to export more to Europe BY The Jakarta Post, Jakarta | Business | Fri, November 14 2014, 8:33 PM; "EU Ambassador to Indonesia, Brunei Darussalam and ASEAN, Olof Skoog, said Friday that President Joko "Jokowi" Widodo aimed to achieve a growth rate of 7 percent, which would need a high level of imported goods to increase GDP while still experiencing a negative trade balance... He said that the EU, with its 28 member countries, was a big market for Indonesia’s exports, even bigger than countries like China and India.... “We are the biggest export market for Indonesia,” Skoog said, adding that Europe had been the biggest export market for Indonesia’s palm oil in recent years... Meanwhile, Skoog said that the Nov. 19 dialogue, which is supported by five European chambers of commerce – BritCham, EKONID, EuroCham, IFCCI and INA –, would be focused on five strategic sectors of automotive; agriculture, food and beverages; infrastructure, maritime and logistics; pharmaceuticals and cosmetics; and energy and renewable energy...."

Foreign friendships must benefit RI: Jokowi by Rendi A. Witular, The Jakarta Post, Brisbane | Headlines | Mon, November 17 2014, 9:53 AM; "After a string of meetings with leaders of the world’s powerhouse nations during his first nine-day official trip overseas, President Joko “Jokowi” Widodo may have redefined the meaning of a “free and active” foreign policy... In a press conference on board the presidential aircraft en route to Jakarta, Jokowi said that diplomacy during his administration would no longer be confined to image-building... “For me ‘free and active’ is making friends with countries that can provide us with benefits. What’s the point of making friends if we are always on the losing end?” said Jokowi, when asked how his vision of international affairs differed from his predecessor’s. ... “What’s the benefit of making friends if it is aimed merely at image-building and if it risks our national interests? It does not mean that we’re creating enemies. It is just that we won’t be close [with countries providing no benefit to Indonesia].”... Although he speaks in a soft tone, Jokowi has been direct in recent conversations with world leaders during the Asia Pacific Economic Cooperation (APEC) summit in Beijing, the ASEAN and East Asia summits in Naypyitaw, Myanmar, and the G20 Summit in Brisbane, Australia.... Jokowi held bilateral talks with, among others, Chinese President Xi Jinping, US President Barack Obama, Japanese Prime Minister Shinzo Abe, Russian President Vladimir Putin, German Chancellor Angela Merkel, Australian Prime Minister Tony Abbott and French President Francois Hollande.... Foreign Minister Retno LP Marsudi told The Jakarta Post that the administration would be more assertive in matters concerning the President’s maritime-axis doctrine.... “It  seems [in the past]  that  Indonesia could not make up its mind. Now, from the very beginning [of Jokowi’s administration] we can deliver  a  message  on  what  Indonesia  is  demanding,” she said.... Jokowi also ensured that agreements forged in the recent bilateral meetings would be followed up. “I will instruct on Monday [in a Cabinet meeting] that all related ministers follow up on the commitments made during my meetings with world leaders. I want something concrete,” he said....."

12 November 2014: Jokowi demands Obama heed concern on palm oil trade restrictions impacting farmers and small companies, caution on FTAs

Jokowi ushers in ‘blak-blakan’ diplomacy by Rendi A. Witular, The Jakarta Post, Jakarta | Headlines | Wed, November 12 2014, 9:28 AM; "As ethnic Javanese, both President Joko “Jokowi” Widodo and his predecessor Susilo Bambang Yudhoyono adhere to the profound norms of the Javanese culture that emphasize the need to compromise and to avoid getting too directly to the point.
While Yudhoyono often refused to be straightforward during bilateral meetings, Jokowi is doing the opposite.... In a press conference late on Monday, Jokowi described his brand of diplomacy as blak-blakan (Javanese slang meaning “being direct”).... During a meeting with Xi on Sunday, for example, Jokowi directly requested that China bolster economic ties through concrete actions including the involvement of Chinese state companies in the development of Indonesia’s infrastructure. Jokowi has also demanded a bigger role for Indonesia in the China-led Asian Infrastructure Investment Bank (AIIB), proposing that the bank open its headquarters in Jakarta.... When he met Obama on Monday, Jokowi demanded that the US lift restrictions on Indonesian palm oil entering the US market. Jokowi said he had expressed his concerns to several other leaders about the difficulty experienced by certain Indonesian agricultural and fisheries products in entering overseas markets. “We don’t want to enter into any discussions on free trade deals. We don’t want to open up unless there is something we can gain,” he said. “Many of our commodities, such as rattan, palm oil and fish, have fallen victim to trade restrictions. These are not commodities produced by big corporations. These are the products of our farmers and small companies,” said Jokowi...."

Jokowi on world stage, first stop Beijing by Rendi A. Witular and Hasyim Widhiarto, The Jakarta Post, Beijing and Jakarta | Headlines | Sun, November 09 2014, 11:27 AM; "In his first official overseas excursion since taking office on Oct. 20, President Joko “Jokowi” Widodo is embarking on a nine-day bilateral and multilateral diplomatic trip aimed at courting investors for the country and showcasing his maritime vision... Beijing was his first stop as he arrived on Saturday evening to attend the annual APEC summit, a prestigious powwow of 21 leaders of Asia-Pacific economies, on Nov. 10 and 11, and also to shore up support from Chinese government and business leaders.... As China is Indonesia’s biggest trading partner, Jokowi looks to be devoting much of his attention during the trip to seeking support from the world’s second-biggest economy...."

Jokowi asks more of China by Rendi A. Witular, The Jakarta Post, Beijing | Headlines | Mon, November 10 2014, 9:02 AM; "Appearing upbeat and donning a stylish suit, President Joko “Jokowi” Widodo met China President Xi Jinping on Sunday on the first leg of his overseas trip since taking office on Oct. 20. Jokowi suggested the leader of the world’s second-biggest economy bolster ties through “concrete” actions.... In his introduction note to Xi at his office in Beijing, Jokowi said Indonesia’s relationship with China, which stretched hundreds of years, was underlying capital to expand future strategic partnerships.... In his welcoming note, Xi congratulated Jokowi for his ascension to the presidency and hoped that under his leadership Indonesia would not only see more rapid development but also play more of a role in dealing with regional and international issues.
“China has always regarded Indonesia as our old best friend and we have always prioritized keeping our relations intact by seeing Indonesia as a strategic partner that we can trust,” said Xi.... In a press conference later in the evening, Jokowi explained that he had requested of Xi that China be more involved in Indonesia’s infrastructure development, particularly in the maritime sector. “What I mean by concrete outcomes is that there should be more progress in the sectors of investment and trade. I’ve requested to President Xi that Chinese state companies be involved more in the construction of our seaports, railways and toll roads,” he said. ... Jokowi has also demanded bigger role in the China-led Asian Infrastructure Investment Bank (AIIB), by proposing that the bank open its headquarters in Jakarta for funds to flow into the country. “China will of course have a 50 percent stake in the bank. We will also have a stake, but smaller. We will inject around Rp 5 trillion [US$ 416.67 million) in participating funds to be paid in installments over five years,” he said.... "

Eye on Brazil: 5 million hectares of sustainable Amazon oil palm eyed, China $150 billion infra spend plan for Brazil, Petrobras' political corruption scandal

I was talking yesterday to Nicholas (Khor Reports research assistant) about Brazil oil palm. So since we've not really covered this here, I've gathered a few links below. It is fascinating to see China's infrastructure investment plans for Brazil to lower cost of bringing its product to market. That has been quite the bane of agriculture producers in Brazil interior. Brazil has identified a maximum 5 million hectares for oil palm, mostly for biodiesel purposes (imagine the cost savings of not having to transport diesel inland). How is this proceeding?

Also to note a key project is by Petrobras-Vale and the former is mired in a massive political corruption problems:

China - Brazil $50 billion infrastructure investment plan

China to invest $50 billion in Brazilian infrastructure AFP By Damian Wroclavsky May 14, 2015 7:27 PM; Brasília (AFP) - China will invest $50 billion to help overhaul Brazil's aging infrastructure, Brasilia said Thursday, ahead of an official visit by Chinese Prime Minister Li Keqiang. "There are $50 billion in new projects," said Jose Graca Lima, Brazil's undersecretary of state, who oversees Asia and Oceania. "We shall have to await the end of the visit to expand upon which projects," he said, without providing details. Battling a fifth straight year of poor growth and mired in a bruising graft scandal involving state oil giant Petrobras, Brazil is seeking to revamp its sagging infrastructure ahead of next year's Rio Olympics, the first Games to be held in South America. A Brazilian government source said Brazil, Latin America's biggest economy, was determined to overhaul its dilapidated roads, railways, airports and ports ahead of the Olympics. The Chinese cash infusion is set to cover various sectors, including transport and energy.

China's ICBC, Brazil's Caixa to start $50 billion fund -sources Wed May 13, 2015 5:43pm EDT BRASILIA; May 13 Caixa Econômica Federal, Brazil's top mortgage lender, and the Industrial and Commercial Bank of China Ltd (ICBC) will create a $50 billion fund for Brazilian infrastructure investments, two government sources with knowledge of the plans said on Wednesday. The fund will be financed entirely by the ICBC, but both banks need to set up the regulatory framework to decide on the projects, said the Brazilian sources, who requested anonymity because the plan remains private. The plan will be formally announced when Chinese Premier Li Keqiang visits Brazil next week, they added. Caixa and ICBC will sign a memorandum of understanding during Li's visit in which the main terms for the fund will be outlined, the sources said. The governments agreed the fund will finance a railway link from Brazil's Atlantic coast to the Pacific Ocean in Peru as a way to reduce the cost of exports to China, said one of the sources. The fund will also finance a joint-venture to produce steel in Brazil. In January, Chinese President Xi Jinping pledged $250 billion in investment in Latin America over the next 10 years as part of a drive to boost resource-hungry China's influence in a region long dominated by the United States. Last year, China and Brazil agreed $7.5 billion in financing for Brazilian miner Vale SA, and the purchase of 60 passenger jets from planemaker Embraer SA.

News links on Brazil oil palm topics

Oil palm set to take over from cattle ranching as the biggest threat to Brazil’s Amazon rainforest?  By Chris Lang 10 November 2014  Despite the reduction in deforestation in Brazil over the past decade, “the deforestation problem is far from solved”, notes Datu Research in a recent report about the beef industry and deforestation in Brazil. Datu describes the most effective tactic in reducing deforestation as “pressure from Western companies that demand deforestation-free supply chains”.  Demand for Brazilian beef is increasing. In August 2014, Russia announced a suspension of beef imports from several countries, including the USA, Australia, and the EU. Even before that announcement, demand was increasing. The Brazilian Beef Exporting Association reports that beef exports increased by more than 10% in the first eight months of 2014.  Datu argues that with the expansion of palm oil and other commodities, “it will become increasingly difficult to attribute deforestation to a specific commodity, making commodity-by-commodity enforcement methods less effective”. Instead, Datu and the Environmental Defense Fund (which paid for the report) suggest complementing deforestation-free supply chains with “enforcement and certification mechanisms focused not by commodity, but by jurisdiction”........ Datu is promoting a “zero net deforestation” approach, where forest can be cleared in some areas, “as long as other areas are sufficiently reforested to maintain net carbon density”. This raises the risk that biodiverse forests could be cleared, and “offset” by monocultures of fast-growing eucalyptus plantations.  Or even oil palm. Datu notes that the Brazilian government sees palm oil as a win-win opportunity: green fuel, green jobs, and a carbon sink “ideal for reforesting lost segments of the Amazon”. The report notes that REDD “has not yet been implemented at sufficient scale to have significant impact”. But with the jurisdiction approach, Datu writes that “the stage would be set” for REDD, “giving producers economic incentives”. In other words, payments from the sale of carbon credits that would allow greenhouse gas emissions to continue elsewhere....

Oil Palm Changes Rural Culture in Brazilian Amazon By Fabiana Frayssinet; CONCORDIA DE PARÁ/MOJÚ/ACARÁ, Brazil , Nov 20 2013 (IPS) - Thousands of small farming families in Pará, in the Amazon jungle in northeast Brazil, have turned to the African oil palm as a new source of income, through contracts with biofuel companies. Strange bedfellows, which poses cultural and economic challenges. The small farm of Antônio de Oliveira smells like a mixture of oranges, black pepper and achiote or annatto (Bixa orellana), a shrub whose fruit is harvested for its seeds, which contain a natural dye that has coloured his farm red. “I didn’t know anything about oil palm…it’s really different to work with, it’s a queer bird, and complicated,” said Oliveira, who signed a contract with the biofuel company Biopalma three years ago to plant African oil palm (Elaeis guineensis), known as “dendê” in Brazil. Biopalma belongs to the Vale mining company, and has 60,000 hectares of oil palm of its own. In addition, it buys the output of small farmers through its Family Agriculture programme. The company plans to use palm oil to produce biodiesel to run the machinery and vehicles at its mines.....

Petrobras, Vale May Join to Make Brazil Palm Oil and Biodiesel 'By'Stephan Nielsen 2:32 AM HKT  August 15, 2012 Aug. 14 (Bloomberg) -- Petroleo Brasileiro SA, Brazil’s state-controlled oil company, and Vale SA are discussing a partnership to produce palm oil and biodiesel in the northern state of Para. Both companies are currently developing separate biodiesel projects in the state, Rio de Janeiro-based Petrobras said today in a statement. Petrobras’s biofuels unit said it will build a 230 million-liter (60.7 million-gallon) a year biodiesel facility in Para in its five-year plan for 2012-16, according to the statement. Vale plans to produce biodiesel from the palm oil in the region and mix it with regular diesel to fuel its Brazil operations from 2015, Petrobras said.

Brazilian mining giant buys Amazon palm oil company  February 03, 2011; Vale, a Brazilian mining giant, will buy palm oil producer Biopalma da Amazonia SA Reflorestamento Industria & Comercio, reports Bloomberg.  The deal, valued at $173.5 million, will enable the mining company to run more of its operations on palm oil biodiesel.  Vale began its palm oil push in 2009 when it formed a partnership with Biopalma. At the time Vale said the deal would save $150 million in fuel costs starting in 2014, with palm oil biodiesel replacing up to 20 percent of diesel consumption in the company's northern operations.  Biopalma has six oil palm plantations covering 18,400 hectares (45,467 acres) in Para, according to Vale. The company expects this to expand to 60,000 ha in 2013. The announcement comes less than a year after Brazil laid out plans to dramatically expand palm oil production in the Amazon. The initiative, called the Program for Sustainable Production of Palm Oil (O Programa de Produção Sustentável de Óleo de Palma), will provide $60 million to promote cultivation of oil palm in abandoned and degraded agricultural areas, including long-ago deforested lands used for sugar cane and pasture. ...

Brazil launches major push for sustainable palm oil in the Amazon by Rhett A. Butler,  May 07, 2010 "Sustainable" palm oil effort may pressure Malaysia and Indonesia on environmental performance of widely used vegetable oil. Brazilian President Lula da Silva on Thursday laid out plans to expand palm oil production in the Amazon while minimizing risk to Earth's largest rainforest, reports Globo and Terra Brasil. The plan, called the Program for Sustainable Production of Palm Oil (O Programa de Produção Sustentável de Óleo de Palma), will provide $60 million to promote cultivation of oil palm in abandoned and degraded agricultural areas, including long-ago deforested lands used for sugar cane and pasture. Brazilian officials claim up to 50 million hectares of such land exist in the country.... Although Embrapa, Brazil's agricultural research agency, has identified some 29 million hectares (71.6 million acres) of land suitable for oil palm cultivation in the Amazon and 2.8 m ha (6.9 m acres) outside the region — an area that would dwarf the 13 m ha of oil palm currently cultivated worldwide — Brazil says it will strictly limit development to less than 5 million hectares. The program specifically prohibits expansion at the expense of native forests, a major concern among environmental groups that have watched the relentless conversion of tropical forests across Malaysia and Indonesia for oil palm over the past 25 years. The palm oil program marks a new focus for Brazil, which currently produces about 110,000 metric tons of crude palm oil per year, a fraction of the amount produced by market leaders Indonesia (16.9 million metric tons in 2008) and Malaysia (15.8 m tons), according to the FAO. But Brazilian growers could see a boost in the international market if they can cost-effectively produce palm oil without driving direct or indirect deforestation, a concern that has dogged Malaysian and Indonesian producers. Brazil says it will rely on its world-class satellite monitoring system to ensure that expansion does not cause deforestation.  Read more at