“In our view, the bar remains high for oil prices to become the main directional driver of HY spreads but the risk has risen.”
“I’m surprised that people didn’t already expect higher OPEC output.”
And so, having been given a (probably temporary reprieve) and a new lease on life, the bulls have managed to drive Brent above $50 for the first time since June 7 on Thursday.
All told, the mood remains “risk-on.”
“We believe this may not send a requisite message to rein in drilling activity for all producers. On the flip side, it sends a theoretical message for producers to issue more debt.”
“Each month something seems to come along to raise doubts about the pace of the rebalancing process.”
Algos, crisis of confidence, incessant data parsing for something negative, or folks “questioning their religion”?
“If output doesn’t rise as much as previously anticipated, then it’s time for the bears to start questioning their religion again.”
“Given the recent rebound in net speculative length from its 18-month lows, we believe, however, that a failure for these shifts to materialize soon could push prices below $40/bbl as the market tests OPEC’s and shale’s reaction functions.”
On Sunday evening we wondered if news that Libya and Nigeria may soon be asked to cap output would serve as a catalyst for crude prices to start the week. Boom.. here's your catalyst for oil on Monday: KUWAIT: OPEC, NON-OPEC TO DISCUSS OUTPUT CAPS ON LIBYA, NIGERIA — Walter White (@heisenbergrpt) July 9, 2017…
KUWAIT: OPEC, NON-OPEC INVITED LIBYA, NIGERIA TO MEET IN RUSSIA
KUWAIT: OPEC, NON-OPEC TO DISCUSS OUTPUT CAPS ON LIBYA, NIGERIA
KUWAIT: LIBYA, NIGERIA MAY BE ASKED TO CAP OUTPUT SOON
Now “the high-yield bond market is waking up,” he went on to caution.
“It’s kind of like going to AA. You know, we need a partner. We really need the investment community to show discipline.”
In what is becoming a daily occurrence, crude took another dive earlier this morning as volume surged. This has been going on all week and has been variously attributed to technical selling around key levels and all sorts of other shit like that, but the bottom line is: there is a crisis of confidence in…