What Will Drive The Next Oil Price Crash?

Authored by Tsvetana Paraskova via OilPrice.com,
As we roll into 2018, analysts and investors are more optimistic that the oil market will further tighten next year and support higher oil prices, but rising U. S. shale production will likely cap any significant price gains.
On the demand side, expectations are that global economic growth will support solid oil demand growth.
On the supply side, Venezuela’s dire situation, possible new sanctions on Iran, and increased tension in the Middle East mostly with the Saudi-Iran issues and the Iraq-Kurdistan standoff may take more barrels off the market than OPEC and friends plan, and send geopolitical jitters through the oil market.

This post was published at Zero Hedge on Dec 22, 2017.

In From The Cold: CIA Gesture Indicates Thawing US-Russia Ties

In the annals of Russian-American relations, it is difficult to recall a precedent for the Kremlin leader calling his White House counterpart to convey his personal gratitude and appreciation for the profound contribution made by the US’ Central Intelligence Agency and its director to Russian national security.
The great irony is that the incumbent Kremlin boss is a former KGB officer. Vladimir Putin never ceases to surprise.
The Kremlin readout of Putin’s phone call to US President Donald Trump on Sunday should be an eye-opener to anyone who bought the US propaganda that Putin is a demon preparing to devour the West – or Russian propaganda that encourages an impression to be formed among the nave and the gullible that the world is carved into two neat halves, namely the good and the evil.
Countries like Turkey, Iran and Egypt – and Venezuela and North Korea – should take particular note that the world situation and the emerging international order are a lot more complicated than some among them would like to think. What prompted Putin to make such an extraordinary move?
For a start, the Kremlin senses that the investigation into alleged Russian interference in the US election last November is meandering aimlessly and may have to be wound up sooner rather than later. That being the case, a future is conceivable in which the tidal wave of Russophobia in the US recedes, leaving behind much devastation and debris but also the opportunity to begin rehabilitation and reconstruction.
Most certainly, Putin understood the great symbolism and meaning behind the gesture by the CIA to pass on crucial intelligence relating to the security of his hometown, the city of his heart’s desires, and the pride of all Russian people.

This post was published at Zero Hedge on Dec 20, 2017.

Oil Producers Turning To Crypto To Solve Sanctions Problems

Authored by Tom Luongo,
Last week, Venezuela announced it would develop a national cryptocurrency backed by its oil reserves, the Petro. Now there is a report that Russia is considering the same thing. Iran will likely follow suit.
As of right now this is just a rumor, but it makes some sense. So, let’s treat this rumor as fact for the sake of argument and see where it leads us.
The U. S. continues to sanction and threaten all of these countries for daring to challenge the global status quo. There is no denying this. And so much of what we see in the geopolitical headlines are knock-on effects of this challenge.
The Geopolitical ‘Why’
From the Middle East to North Korea, the Dutch changing their laws to block Nordstream 2 to the Saudis breaking off relations with Qatar, everything you read about in the news is a move on the geopolitical ‘Go’ board.

This post was published at Zero Hedge on Dec 12, 2017.

Time’s Up On The Norks

Yes, I know the problem is difficult.
I know there are no good answers.
I know that any military solution is not only fraught with risks, but is likely to result in tens of thousands of casualties and might lead to nuclear fireballs.
Nonetheless we must cut the crap. Either North Korea (and by extension every other nation) has the right to possess nuclear weapons or it does not.
Either we and other nations have the right to determine who can “join” the nuclear club or we do not.
It’s binary, when you get down to it.
Nobody wants to take it on in this regard, but we must. We must because the same situation applies today to Iran. Tomorrow it will be Sudan or for that matter Venezuela. The principles are the same; either a sovereign nation has the right to possess any technologically-possible means of defense and offense within its military or it is not a sovereign nation with the right of self-determination.

This post was published at Market-Ticker on 2017-12-01.

Venezuela’s Default Disaster

Socialism always promises heaven and gives hell.
In the early hours of Thursday, November 2, the Maduro regime certified its latest failure with what they promised would never happen: technical default. With his usual arrogance, Maduro issued a ‘decree’ demanding ‘the refinancing and restructuring of the debt as of November 3.’ That is, default.
The bad news for investors or high-yield hunters is that the likelihood of being swindled again is almost 100%.
Chavez once said ‘put me oil at zero and Venezuela will not suffer,’ and Maduro stated that ‘a revolutionary government with economic power as the one I preside has plans to surpass any situation arising from any price of oil.’ Reality has now kicked in.
Venezuela was not destroyed by low oil prices, but by high socialism.
Socialism has led Venezuela to an unparalleled economic disaster . No, it’s not ‘the price of oil.’ Venezuela is the only OPEC country that has fallen into default, depression, and hyperinflation. It’s not oil, it’s socialism.
The management disaster is spectacular and the greatest example of the devastating effect of socialism is the state-owned oil company. PdVSA, the national oil company, has gone from being one of the most efficient and profitable twenty years ago, to end up importing oil.

This post was published at Ludwig von Mises Institute on 11/20/2017.

Venezuela Just 24 Hours Away From Formal Declaration Of Default

Less than a week after Venezuela shocked the world by announcing it would proceed to restructure its massive external debt, even as it was within the grace period on hundreds of millions in unpaid interest expense, on Thursday the socialist nation confirmed it has never been closer to an official default after Reuters reported that Venezuela’s state oil-firm company, PDVSA, has not made a debt payments to India’s top oil producer ONGC for six months, and has previously used a Russian state-owned bank and another Indian energy company as intermediaries to make payments.
Reuters sources noted that PDVSA has made no payment since April on what was a $540 million backlog of dividends owed to ONGC for an investment the Indian firm made in a an energy project in Venezuela. Venezuela’s President Nicolas Maduro said last week that the country planned to restructure some $60 billion of bonds, much of it held by PDVSA, as the country struggles to meet debt repayments.
While ONGC Videsh – the overseas investment arm of ONGC confirmed to Reuters that PDVSA had fallen behind on the payments, but declined to give details on the delays.
Curiously, the Indian company appears not to be overly concerned about non-payment for half a year, and instead was willing to keep giving Maduro the benefit of the doubt: ‘They have got certain challenges at this stage,’ ONGC Videsh said in an emailed response to Reuters’ questions. ‘They have assured that they are working on it (payment of dues). In due course it will be settled and follow up steps will be undertaken.’ And just to underscore that it has no intention of pushing Venezuela into involuntary bankruptcy, ONGC added that ‘we have a good working relationship with PDVSA.”

This post was published at Zero Hedge on Nov 9, 2017.