Oil remains bullish near highs
Oil prices are easing again today after moving back towards seven-year highs in recent weeks. It was given an additional bump yesterday following the release of the EIA data which showed a larger draw than expected. But with crude already trading near its peak, it maybe didn’t carry the same momentum it otherwise would.
The fundamentals continue to look bullish for oil. Temporary disruptions in Kazakhstan and Libya are close to being resolved, with the latter taking a little longer to get fully back online. But OPEC being unable to hit output targets at a time when demand remains strong is ultimately keeping prices elevated and will continue to do so.
A big test for gold
Gold is off a little today but the price remains elevated with key resistance in sight. The yellow metal has remained well supported in recent weeks even as yields around the world continue to rise in anticipation of aggressive tightening from central banks.
It could be argued that the bullish case for gold is its reputation as an inflation hedge, especially given central banks’ recent record for recognizing how severe the situation is. But with inflation likely nearing its peak, that may not last. That said, fear around Fed tightening may also be peaking which could support gold in the short-term and a break through USD 1,833 could signal further upside to come.
For a look at all of today’s economic events, check out our economic calendar: www.marketpulse.com/economic-events/
Oil at $85 per barrel hits seven-year high on Middle-East tensions
Oil prices are continuing their steady ascent, with geopolitical tensions adding to an already bullish market for energy commodities. Although other factors,…
Oil prices are continuing their steady ascent, with geopolitical tensions adding to an already bullish market for energy commodities. Although other factors, such as a weaker-than-feared Omicron variant, are also playing a role in the rise of oil prices, investors are paying more attention to what’s happening overseas. In particular, political tensions in oil-producing areas threaten to curtail supply once again and drive up prices.
West Texas intermediate ended the day at $85.4 per barrel, a 1.9% bump from yesterday’s prices, while Brent crude saw a similar percentage increase. That’s the highest closing level seen since October 2014, when oil prices fell as a result of the shale-induced crash. In contrast, while the energy sector was up, the rest of the markets reported significant losses across the board.
The main catalyst for this recent jump in price is the Abu Dhabi oil facility attack. Iran-backed Houthi rebels claimed responsibility for the attack against the United Arab Emirates facility, which killed three people and injured many others.
“The damage to the UAE oil facilities in Abu Dhabi is not significant in itself, but it raises the question of even more supply disruptions in the region in 2022,” warned senior oil markets analyst Louise Dickson. “The attack raises the geopolitical risk in the region and may signal the Iran-U.S. nuclear deal is off the table for the foreseeable future.” She added that should this happen, that would mean Iranian oil would also be off the market, further boosting prices as demand moves elsewhere.
Other analysts made similar warnings. Goldman Sachs stated that should similar attacks like these take place, oil could easily rise to over $100 per barrel sometime this year. While good for energy companies, higher prices are also accelerating inflation, with the CPI taking into consideration these ever-volatile energy prices. A large portion of the recent 7% inflation rate is due to this rise in energy prices.
Amidst everything that’s going on, oil production is continuing to increase. According to a report from the Energy Information Administration, Permian oil output is growing to over five million barrels per day starting in February. That’s the highest level seen since March 2020 when the pandemic first kicked into gear. Total shale output is growing to 8.3 million barrels per day as well. While oil and shale production is stilling lags pre-pandemic levels, the Permian basin has recovered remarkably quickly given the low production costs.
At the same time, OPEC forecasts that the world’s demand for oil will continue to go up. The cartel predicts that the world requires over 100.8 million barrels of oil per day, a 4.2 million bbd increase compared to 2021. Most of this increase is due to the rising demand for light distillates. As long as this current environment stays the same, it’s quite likely that oil will indeed jump over $100 per barrel once again.
In response to all this, investors are continuing to bid up on shares of big energy companies. Chevron (NYSE: CVX) is up more than 10% this month, while Exxon Mobil (NYSE: XOM) has gained over 19% over the same period.
The post Oil at $85 per barrel hits seven-year high on Middle-East tensions appeared first on Warrior Trading News.
Here Are The Highlights From Biden’s “Longer-Than-Expected” Press Conference
Here Are The Highlights From Biden’s "Longer-Than-Expected" Press Conference
Update (1800EET): In what seemed like an attempt to make up for…
Here Are The Highlights From Biden’s “Longer-Than-Expected” Press Conference
Update (1800EET): In what seemed like an attempt to make up for the fact that this was only the second solo presser of his presidency, America’s geriatric Democrat-in-chief stretched his Q&A out for nearly two hours. In that time, he blamed a gallery of villains for the woes plaguing contemporary American society. They included: the virus (but – and this is important – not the Communist-controlled one-party state that unleashed it), meat processors (for driving up prices on meat), Vladimir Putin and, of course, his predecessor, President Trump (but not Dr. Fauci, who helped finance the gain-of-function research that may have helped Chinese scientists create SARS-CoV-2).
First of all, Biden admitted that he suspects Russia will attempt to invade Ukraine. But if they do, Biden promised that the economic costs will be extremely “heavy”. He has “never seen sanctions like the ones I’ve promised will be imposed” Biden said, referring to his rival, President Vladimir Putin.
On the geopolitical front, Biden also said that the US isn’t yet ready to remove President Trump’s tariffs on China. Does he have a timeline for possible removal? “The answer is uncertain,” Biden said. His top trade official is working on it.
And as oil prices continue their climb, Biden said he is doing everything he can to increase available supplies (everything except another release from the US SPR).
Later, he said that it’s not too late for talks with Iran to yield another deal. “There is some progress being made,” but “it remains to be seen” if Tehran will make a deal, Biden said in a news conference Wednesday marking his first year in office.
He also confirmed that VP Kamala Harris will be his running mate in 2024.
Early in his opening statement, Biden said he wouldn’t simply accept the status quo as a “new normal”.
“I’m not going to give up and accept things as they are now…some people call it a new normal. I call it a job not yet finished,” Biden said.
He also acknowledged that it’s become “clear” to him that Democrats in Congress will need to break up the president’s tax and spending plans.
While he claims to support the Fed’s political independence, Biden said that it’s probably appropriate for the central bank to “recalibrate” policy so as to effectively combat inflation. He also said his nominees to serve in senior roles at the central bank (including re-nominating Powell to serve as its chairman for another term) should be approved by the Senate right away.
The No. 1 takeaway from the MSM is that Biden’s press conference was “longer than expected”. Many of his supporters celebrated this as evidence that the president can still ‘turn it on’ when he needs to.
On length of Biden’s press conference: you cannot answer the question “are you competent?” you can only demonstrate it. That is what Biden did today, and did it in a slam dunk. Anyone who has ever dealt with a hostile reporter, it is a task, draining, takes mental acuity.
— David Doak (@SouthPoint1000) January 19, 2022
Others gleefully mocked them for grasping for a positive.
A hilarious number of people on here attempting to prop up Joe Biden’s press conference by complementing its length.
“It may have been rambling and incoherent at times but boy was it long”
— Kevin Dalton (@NextLAMayor) January 20, 2022
Now, we imagine Biden is rewarding himself with a glass of warm milk and a nap.
* * *
President Joe Biden is about to cap his first full 12 months in office by holding what has been described by the NY Post as only the second solo press briefing since the former VP returned to the White House.
Readers can watch live below. The briefing is slated to begin at 1600ET:
Biden is expected to discuss COVID, his dismal approval rating and a range of other topics.
Biden has largely remained out of public view this week – stopping briefly to speak with reporters outside of the White House on Monday.
On Tuesday, members of the White House attended an economic briefing and also called Finland’s President Sauli Niinistö to discuss tensions between Ukraine and Russia.
Will Biden’s handling of the pandemic elicit tough questions from the press now that the omicron variant has sent cases and hospitalization rates to all-time highs this month? We think you probably know the answer…
More than 855K US residents tested positive for COVID Monday, according to CDC data, nearly 3x last winter’s peak of just 294K cases on Jan. 8, 2021. And about 150K US hospital patients have COVID, besting the pre-omicron record of 133K “variant” cases recorded last January.
To put this all in context: 352K Americans died of (or from) COVID in 2020 under Trump, while 474,000 Americans died of/from COVID in 2021 under Biden.
Murderer! Right, Salon?
Now, President Biden is running around trying to “take credit” for the dynamic drop in COVID cases.
The impression that Biden has been asleep at the wheel has helped to drive Biden’s job approval rating lower; one recent Quinnipiac Poll tagged Biden’s approval rating at just 33%.
President Biden’s overall approval rating in the last seven Quinnipiac polls: 49%, 46%, 42%, 38%, 37%, 36%, 33%.
— Ryan Struyk (@ryanstruyk) January 12, 2022
If QPac’s numbers are that low, imagine what the “real” numbers might look like.
If even the left-wing pollsters have numbers this bad for Biden, the real numbers must be even more horrific. https://t.co/LiV8S7f7O4
— Mollie (@MZHemingway) January 12, 2022
Either way, Biden is cratering.
The President only agreed to participate in Wednesday’s briefing after his top media advisors desperately implored him to get out there and speak directly to the American people.
Joe Biden’s Awesome First Year
To win an exhausted nation’s admiration, all Joe Biden had to do was nothing. Instead, he’s burning future votes like kindling…
The Gallup agency released a picture of the comet that is the Joe Biden presidency on its first anniversary. This is what a one-year, 14-point party affiliation swing looks like:
The pollsters put the numbers in context:
Both the nine-point Democratic advantage in the first quarter and the five-point Republican edge in the fourth quarter are among the largest Gallup has measured for each party in any quarter since it began regularly measuring party identification and leaning in 1991.
How great was life for Joe Biden a year ago? MSNBC’s John Heilemann compared him to Lincoln; PBS White House correspondent Yamiche Alcindor said the return of the Democrats “felt like we are being rescued from the craziness and now here are the superheroes to come and save us all”; Rachel Maddow went through “half a box of Kleenex” in joy; even Chris Wallace on Fox said Biden’s half-coherent inauguration speech was “the best inaugural address I ever heard,” JFK’s iconic “Ask Not” included.
Biden looks bad. During the campaign, when he was challenging strangers to pushup contests and doing sternum-pokes in crowds while nervous aides bit their lips, you could make the argument he was merely in steep with his mental decline, which was okay. Against Trump the standard of “technically alive” worked for a lot of voters. Biden now looks like a man deep into the peeing-on-houseplants stage, and every appearance is an adventure.
He might say, “Even Dr. King’s assassination did not have the worldwide impact that George Floyd’s death did,” or repeat his evolving fantasy about getting arrested with Nelson Mandela (who according to the president also later came to Washington to say, “You got arrested trying to see me!”), or let it slip that aides are shielding him from all news (a logical takeaway from his “Let’s Go Brandon, I agree” Christmas moment). Or, he might just collapse into syllable-piles before casting around in fright, like this gut-wrenching “Where’s Tim?” scene:
It’s reached the point where MSNBC is permitting guests like Donny Deutsch to say things like, “He seems old.” In a panic, Party spokestool Paul Begala went on the network this week to deliver a real-life version of the old Mel Brooks “the peasants are revolting” joke, saying “the problem for the Democrats… is not that they have bad leaders. They have bad followers.”
As Paul Begala said, “the problem with the Democrats…FF
Biden has always been an easy punchline. A tumescent yeller with hair plugs is a magnet for comics.
TK News subscribers can continue reading here.
FInally, here are some questions that Biden might face during Wednesday’s briefing, courtesy of the Hill:
- Is Build Back Better dead? Are you willing to urge Democrats to pass pieces of it rather than the whole proposal?
- You have warned for several months that Republican laws like the one in Georgia represent an attack on democracy. Why then did you wait until last week to make a forceful push to alter the filibuster? And would you support reforming the Electoral Count Act if other efforts fail?
- What preventative measures is your administration looking at in order to prevent another test shortage and other pandemic-related measures should another variant arise? What do you say to criticism that your administration is reacting instead of being more proactive two years into the pandemic?
- Have you been satisfied with the messaging coming from the Centers for Disease Control and Prevention? Can your administration improve the way it communicates about the pandemic to the American public?
- You and your advisers have predicted that inflation will be transitory, but with the costs of food, housing and other essential goods rising, how can you assure Americans that your administration is focused on addressing surging inflation?
- Last week, the Supreme Court struck down your sweeping vaccine-or-test mandate for large private businesses. Will that be the end of your efforts to mandate vaccines or are more actions on the table?
- You recently called the Jan. 6 attack on the Capitol an “insurrection” and an attempted “coup.” Do you believe the Justice Department should prosecute former President Trump for his role in the Jan. 6 riot?
- Can you commit unequivocally to running for reelection? Will Vice President Harris be your running mate? If you can’t commit unequivocally, who do you think should be the nominee if circumstances ultimately cause you to decide against running?
- Your press secretary, Jen Psaki, said Tuesday that Russia could launch an attack on Ukraine “at any point.” What is your administration going to do to punish Russia if it does so? Are you doing everything you can to try to force Russia to pull troops back from the border with Ukraine?
4 Top Stock Trades for Thursday: AAPL, GLD, BAC, F
It was another brutal day in stocks. I was not happy to see the market gap up on the day, as that made it easy to sell into and that’s exactly what happened….
It was another brutal day in stocks. I was not happy to see the market gap up on the day, as that made it easy to sell into and that’s exactly what happened. The S&P 500 and Nasdaq each dropped about 1%. With that in mind, let’s look at a few top stock trades despite the selling.
Top Stock Trades for Tomorrow No. 1: Apple (AAPL)
Apple (NASDAQ:AAPL) has been a relative strength leader until recently, but it’s now coming under some selling pressure.
I wasn’t sure when we would get the tag of the 50-day moving average, but in combination with last week’s low, it is even more attractive.
On a move back up through last week’s low (at $168.17), bulls can look to trade Apple stock on a bounce, first targeting $170, then the declining 10-day moving average.
A break lower could end up putting the $158 to $160 zone in play, along with the 21-week moving average.
While Apple hasn’t traded that well lately, remember it was a leader before this recent dip.
Top Stock Trades for Tomorrow No. 2: Gold ETF (GLD)
Gold has had a lot working against it, mainly that it hasn’t had any momentum despite robust money printing from the global central banks and inflation that’s been on a tear.
When I look at the chart of the SPDR Gold Trust ETF (NYSEARCA:GLD), however, I see a powerful upside rotation.
Not only is the GLD clearing multiple weeks worth of highs, but it’s also clearing last month’s high as well. That’s the type of rotation that could put fourth-quarter resistance in play, up near $175.
Of course, it’s hard to have too much faith in this one, seeing as though most of its breakouts have not yielded any sustained upside moves. If it pulls back again, see that its cluster of moving averages acts as support.
Top Stock Trades for Tomorrow No. 3: Bank of America (BAC)
Given how the other banks had traded on earnings, it’s no wonder that Bank of America (NYSE:BAC) stock had been trading poorly ahead of the print.
However, it’s also not surprising that the stock’s gap up on Wednesday morning was sold into.
Shares opened right near that gap-fill level at $48.70, then proceeded to fall throughout the session. While its short-term moving averages are supporting it now, there are not a lot of bullish catalysts to go on.
I guess bulls can be long against the 50-day if they really want to own this one.
However, keep an eye on BAC stock if breaks below $45. That could open the door to the December low near $42.70 and the 200-day moving average.
On the upside, though, the stock needs to clear $48.70.
Top Trades for Tomorrow No. 4: Ford (F)
Let’s keep it short and sweet with Ford (NYSE:F).
The stock knifed right through its 10-day moving average and dipped down to the 21-day.
On a bounce, we need to see the stock reclaim $23, then the 10-day. On a further dip, however, keep an eye on the gap-fill at $21.88. That’s followed by the 10-week and 50-day moving averages.
For now, this is still a name we want to buy on the dips.
On the date of publication, Bret Kenwell did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
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