Steve Bull's Blog, page 1226
December 20, 2017
Oil Market On Edge Following Outages
Several key outages have left the oil markets anxious despite a promising start to the week. Analysts are keeping a close eye on both Nigeria and Venezuela as political instability threatens to impact supply further.
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– Brazil’s oil production surged this year, jumping to 3.3 million barrels per day (mb/d), up from 3.2 mb/d in 2016 – a figure that includes other liquids production.
– The increase came largely from the pre-salt, which surpassed 1 mb/d in 2017, a sharp 33 percent increase from 2015 levels.
– Brazil is now the 9th largest oil producer in the world.
Market Movers
• Eni (NYSE: E) started production at its Zohr gas field in Egypt. Separately, the Italian oil company said that it restarted production at its Goliat field in Norway’s Arctic after a two-month outage.
• Ecopetrol (NYSE: EC) announced its fourth oil discovery in Colombia this year. “This new discovery shows that we are on the right track to our objective of increasing reserves. We are satisfied with the results of this alliance with Parex, which has underlined the potential of Santander province,” Ecopetrol CEO Felipe Bayon said.
• Total SA (NYSE: TOT) announced a final investment decision for large-scale development of the Libra project in offshore Brazil. The project will consist of a floating production storage and offloading unit with eventual capacity of 150,000 bpd.
Tuesday December 19, 2017
Oil prices initially rose on Monday on news that Nigerian oil workers went on strike, raising fears of a supply outage. The strike was called off, however, leading to a selloff in oil prices. But the lingering outage of the Forties pipeline continues to support Brent prices.
…click on the above link to read the rest of the article…
Un-Merry Christmas: The Perverse Incentives to Over-Consume and Over-Spend
Isn’t it obvious that if we set out to design the most perverse, toxic and doomed system possible, we’d end up with the Keynesian Cargo Cult’s insane permanent growth/Landfill Economy?
Few topics are off-limits nowadays: the personal and private are now splashed everywhere for all to see.
One topic is still taboo: the holiday’s perverse incentives to over-consume and over-spend,lest our economy implode. This topic is taboo because it strikes at the very heart of our socio-economic system, which is fundamentally based on permanent growth, the faster the better, as if unlimited expansion on a finite planet is not just possible, but desirable.
In the current Mode of Production, the solution to every social and economic ill is to “grow our way out of it.”
The solution to unemployment: jump-start growth by expanding consumption, spending and borrowing.
The solution to stagnant wages: jump-start growth.
The solution to declining profits: jump-start growth.
The solution to government deficit spending: jump-start growth.
And so on.
So what happens when most people have not just the basics of life, but a surplus of stuff? Where is the growth going to come from if people already have everything?
The answer is three-fold:
1. Replace a perfectly good product with a new product and dump the old one in the landfill.
2. Buy duplicates and put the surplus products in the closet or storage facility.
3. Buy gimmicks (Pet Rocks, etc.) that are tossed in the dump shortly after the holiday gift-giving season ends.
But does this Landfill Economy make sense?
…click on the above link to read the rest of the article…
The Internet is Already Broken
Photo by irina slutsky | CC BY 2.0
Near the end of 2014 Kim Kardashian set out to “break the internet.” She posed naked for pictures. This went great, getting 1% of entire internet activity on the day she did it. Now the worry is that such expressions of democracy will be gone when we lose net neutrality.
Net neutrality is a funny phrase. There certainly was net neutrality when leftist websites were blacklisted from Google. And when Amazon’s Jeff Bezos bought the Washington Post. Not to mention that all the content we receive come from six large companies who own just about all the media we consume. It is odd to see people who solely consume corporate outlets such as MSNBC bemoaning the loss of net neutrality.
What may be more troubling than the loss of a supposedly free internet is that so many of us were fooled already. Even in a neutral setting so many of us preferred to consume the very same websites that will now be able to pay for advantages on the internet.
The term “fake news” has never quite told the whole story. The idea that there is some sort of liberal conspiracy being peddled by all mainstream news outlets is silly. These people are only liberal to hide their corporate agenda from liberals, and I suppose everyone who hates liberals. Once you count the liberals and the liberal haters you don’t have many people left. Moreover, the news isn’t necessarily purely fake that often. When ABC suspended Brian Ross it was essentially for spreading fake news. What is a more effective strategy than outward lying is telling part of the truth. Or just spinning speculation without ever presenting evidence, Russia interference in the US elections being the blueprint. All bets are off for imperialism though I think. The New York Times and the Iraq war come to mind.
…click on the above link to read the rest of the article…
A Review Of The Most Disturbing Events Of 2017
With events like the British vote to leave the EU, the peak of the mass Muslim immigration into Europe, the “surprise” (for some people) upset win of Donald Trump in the U.S. presidential election and the subsequent leftist riots, it may be difficult to top the absolute geopolitical and social mayhem of 2016. However, when examining recent history and ongoing trends, it’s important to understand that these shifts are often cumulative; they tend to build upon each other like sheets of ice on a mountainside, storing up energy for a great avalanche.
We witnessed what I would consider a moderate build up and “avalanche” in the economic world in 2008, and of course this merely set the stage for an evolving form of fiscal collapse for the ten years that followed. This time around though, that ongoing collapse will surface in the form of currency crisis and treasury bond crisis, as well as all the international tensions and conflicts that come with these financial atom bombs. If I was to define the year of 2017 and its place in the grand scheme, I would say it represents the moment that the path became obvious for the next decade, at least for those that have been paying attention.
There have been some incredible revelations this year, things that will change the face of global economics and international relations, but most them have gone unnoticed in the mainstream overall. Here are just a few of the earth shattering events that will lead to unprecedented instability in 2018, probably through to the year 2030.
…click on the above link to read the rest of the article…
December 19, 2017
Winter Survival: Practical Preps for an Emergency Bug Out
“I got to, got to, got to, get away…turn me loose, baby.” – Jimi Hendrix, “Stone Free”
Yes, ReadyNutrition guys and gals, there comes a time when you just “got to get away,” so to speak. This doesn’t mean to the sands of (what used to be) St. Bart’s. This means “E&E,” or “Escape and Evasion,” as we used to call it in the Army. But what if your car is not working because of an EMP…and you have two feet of snow on the ground? What if you have a sheet of ice so thick on the ground that the Olympic Hockey Team could practice on it? The “suck” factor will be high, and the adrenaline will be pumping. You have to get out of there. Are you prepared?
You can be. Firstly, let’s refresh a few things that have been mentioned already. You have your BOB (your happy “Bug-Out Bag”) if you wish to call it that. It should be packed and ready in your vehicle.
And at this stage of the game, you should have already switched off for your winter needs, as we covered in numerous articles before.
You need both a Gore-Tex top and bottom for extreme cold weather. First things first! What are you facing? If it’s the ice, you need a pair of Yak-Trak’s or Crepons (like these) to place upon your feet with metal spikes on the bottom to give you some traction. Yes, these guys will run you about 30 to 40 bucks, and it’s well worth it. The rubber harness that holds either springs or spikes/metal cleats are durable and will last you for more than a couple seasons if you use them regularly.
…click on the above link to read the rest of the article…
In Legalizing Marijuana, Uruguay Trips over the Dollar, US Laws, and Global Banks
It’s far from easy to do business without the financial support of any bank. But Uruguay, in its efforts to create a legal, regulated market for the recreational use of marijuana, is trying. In August it was revealed that some of the pharmacies that had agreed to sell the two varieties of cannabis distributed by the Uruguayan State had received threats from their respective banks, including the local subsidiary of Spain’s Santander, that they would close their accounts unless they stopped participating in the state-controlled sales.
To fill the funding void, the state-owned lender Banco República (BROU) announced that it would provide credit to the pharmacies involved in the scheme as well as producers and clubs. But within days, it too was given a stark ultimatum, this time from two of Wall Street’s biggest hitters, Bank of America and Citi: Either it stopped providing financing for Uruguay’s licensed marijuana producers and vendors or it’s dollar operations could be at risk — a very serious threat in a country where US dollars are used so widely that they can even be withdrawn from ATMs.
Why Drug Lords Love the Patriot Act
The main reason why this is all happening is that under the US Patriot Act, handling money from marijuana is illegal and violates measures to control money laundering and terrorist acts. Despite the fact that US regulators have made it clear that banks will not be prosecuted for providing services to businesses that are lawfully selling cannabis in states where pot has been legalized for recreational use, major banks have shied away from the expanding industry, deciding that the burdens and risks of doing business with marijuana sellers, both within and beyond U.S. borders, are not worth the bother.
…click on the above link to read the rest of the article…
Bad Moon: (Trouble) Rising
Bad Moon: (Trouble) Rising
It seems that we are coming to the crux: President Trump, like Reagan before him, was elected by ‘the people’ rather than by (what Paul Craig Roberts calls the ‘ruling interest groups’): “As a high official in Reagan’s government who was aligned with Reagan’s goals to end stagflation and the Cold War, I experienced first-hand, the cost of going against the powerful interest groups that are accustomed to ruling. We took away part of their rule from them, but now they have taken it back. And, they are now stronger than before”. I too, experienced something of the panic that the end to the Cold War induced amongst the ‘ruling interest groups’ — after all, American policy in the Middle East (and western Europe) was entirely dominated by an unstoppable momentum to cleanse it of all Russian influence. And then – ‘pop’ – the Soviet enemy suddenly, was ‘enemy’ no more. Yet, the ‘ruling interest groups’ were, by then, fully committed to a globalized (i.e. a culturally non-nationalist, consumerist, life-style,) rules-based, political and financial, ‘world’, shaped by the US. Serendipitously, after 9/11, terrorism emerged served to underpin the perceived need for a common defence-based, NATO-esque, global ‘order’, as the glue to America’s unipolar moment.
President Obama lay very much in the globalist ‘struggle for a democratic-liberal world’ mould, (though he did try to make the ‘ruling interests’ understand that there were limits: that there had to be boundaries to US commitments). In other words, Obama accepted the globalist premise, though he tried to mitigate some of its military impulses. Notably however, he acquiesced to re-heating the Russia ‘threat’ (after Medvedev gave place to Mr Putin (thus ending Obama’s hope to seduce Russia into the embrace of the global economic order).
…click on the above link to read the rest of the article…
Can a Country Commit Suicide by Taxation?
Certainly, an economy can be seriously damaged by reckless taxation, but Greece seems determined to see if it can be outright destroyed by it, too.
Greece has confirmed that a nation can spend itself into a fiscal crisis.
And the Greek experience also has confirmed that bailouts exacerbate a fiscal crisis by enabling more bad policy, while also rewarding spendthrift politicians and reckless lenders (as I predicted when Greece’s finances first began to unravel).
So now let’s look at a third question: Can a country tax itself to death? Greek politicians are doing their best to see if this is possible, with a seemingly endless parade of tax increases (so many that even the tax-loving folks at the IMF have balked).
At the very least, they’ve pushed the private sector into hospice care.
Let’s peruse a couple of recent stories from Ekathimerini, an English-language Greek news outlet. We’ll start with a rather grim look at a very punitive tax regime that is aggressively grabbing money from taxpayers with arrears.
Tax authorities have confiscated the salaries, pensions and assets of more that 180,000 taxpayers since the start of the year, but expired debts to the state have continued to rise, reaching almost 100 billion euros, as the taxpaying capacity of the Greeks is all but exhausted. In the month of October, authorities made almost 1,000 confiscations a day from people with debts to the state of more than 500 euros. In the first 10 months of the year, the state confiscated some 4 billion euros.
But the Greek government is losing a race. The more it raises taxes, the more people fall behind.
…click on the above link to read the rest of the article…
Limits to Economic Growth?
These are notes from a short lecture given at Nottingham University on 28th November 2017. Click on the images to enlarge them.
1 Production Increase
During the 17th and 18th centuries the rise of mercantile power, colonialism and a slave economy was associated with the development of the idea that “improvement” meant production growth and was an indicator of a new idea of progress. This was a core idea in Adam Smith’s book The Wealth of Nations. In it Smith described the production increase at the early stages of the industrial revolution as being the result of an increasing division of labour and specialisation – his famous example being the pin factory.
However what really enabled the industrial revolution to take off was not just that production was being broken down into simplified specialised processes in factories but that this specialisation enabled mechanisation. Machines were being applied to production on a greater scale and these machines were powered. Their energy source was fossil fuels – coal fired steam engines began to overtake wind and water mills, sails, wood and the muscles of humans and work animals as the main energy and power sources.
2 Applications of fossil fuels to machinery and technical infrastructures
Later in the next century coal power was supplemented oil as a fuel source refined into petroleum and diesel. Later still natural gas became a fuel. The technologies of energy delivery evolved too. Gas was created from coal and piped across towns and cities. The fossil fuels, and later uranium 235, were used to generate electricity which could be distributed by power grids. It could be generated too by hydro power dams as well as by wind and solar.
…click on the above link to read the rest of the article…
The Beginning Of The End For Norwegian Oil
The demise of the North Sea doesn’t necessarily mean the end of Norway’s petroleum era—far from it. Still, despite significant reserves in the Barents Sea, Norway is about to embark upon a long period of structural decline as its benchmark fields inch closer to depletion and its reserves taper before our very eyes.
The average Norwegian might not even perceive the difference between an oil-rich Norway and one that is past its prime. The nation’s massive external and fiscal net position, as well as its complete energy independence thanks to hydropower, allows for great flexibility regarding future policies. Yet its oil workers must prepare for a future that is much more Arctic, smaller-scale and gas-based.
There’s ample evidence to conclude that all the sweet spots of Norway’s continental shelf have been found. The latest shelf licensing round (24) elicited a weak response, with only 11 companies applying for production licenses. There was plenty to bid for—102 blocks were up for grabs (never before did the Norwegian Petroleum Directorate offer so much, with an overwhelming majority of them in the Barents Sea), but due to their remoteness from formations deemed to be the most hydrocarbon-rich, bidders were only half as numerous as they were during the previous licensing round in 2015.
Other factors also contributed, including ongoing legal disputes whether drilling in the Arctic breaches Point 112 of Norway’s constitution (“natural resources should be managed based on long-term considerations, safeguarded for future generations”) and questions over the admissibility of drilling in Russia-disputed Svalbard waters (10 blocks) might have scared away an investor or two.
…click on the above link to read the rest of the article…
