Oil Binaries will be Impacted by Reports of Saudi Oil Pipeline Explosion

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Oil Binaries will be Impacted by Reports of Saudi Oil Pipeline Explosion

Reports of an explosion in a Saudi oil pipeline have sparked some fast paced movement in the prices of this commodity. For the first time since May, oil prices have climbed over $110 a barrel. While officials of this country have carefully worded their comments to imply that oil facilities were not impaired, it is not known whether this is the whole truth as yet. The pipelines that were reportedly damaged lie in the city of Awwamiya.

Even as the news broke in New York on Thursday afternoon, oil futures spiked briefly and then settled once more at below $109 price levels. Binary traders should take special note of these events if they are ‘invested’ in this commodity.

Rumours Can prove Dangerous

Phil Streible, a commodities broker in Chicago believes that the report is not quite true. He points out that rumours can be quite dangerous especially when they concern highly sensitive commodities like oil. Meanwhile, in a bid to keep things under control, the Saudi Interior Ministry has issued an official statement saying that a fire near the Ras Tanura refinery did not affect the oil facilities in the area. Rumours of sabotage were also dispelled by the official spokesman.

However, international intervention has already occurred in the tense situation in these parts in the form of the U.S.’s escalated warnings about joining hands with Israel against Iran. Given the simmering war between Saudi and Iran this intervention is likely to colour this episode too. In fact, the escalated warnings helped boost oil future prices in the U.S. market.

A Highly Volatile Market

According to the CE of the commodity market newsletter Barratt’s Bulletin, the alleged explosion and the effect of the news on oil prices only indicates how volatile the oil segment is. Price sustainability and price fluctuations are heavily dependent on socio- economic- politic happenings in the Middle East, he said.

For those trading in oil binaries, these are the hotspots to watch. The current situation is so tense that even a minor incident could snowball into a full fledged military manoeuvre in this part of the world. And if this happens, oil prices are bound to be impacted dramatically.

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The Rich Get Richer when Central Banks Print Money

The Rich Get Richer when Central Banks Print Money

The Netherlands Central Bank has just published a fascinating new paper, titled “Monetary policy and the top one percent: Evidence from a century of modern economic history”. Authored by Mehdi El Herradi and Aurélien Leroy, (Working Paper No. 632, De Nederlandsche Bank NV: https://www.dnb.nl/en/binaries/Working%20paper%20No.%20632_tcm47-383633.pdf), the paper “examines the distributional implications of monetary policy from a long-run perspective with data spanning a century of modern economic history in 12 advanced economies between 1920 and 2020, …estimating the dynamic responses of the top 1% income share to a monetary policy shock.” The authors “exploit the implications of the macroeconomic policy trilemma to identify exogenous variations in monetary conditions.” Note: the macroeconomic policy trilemma “states that a country cannot simultaneously achieve free capital mobility, a fixed exchange rate and independent monetary policy”.

Per authors, “The central idea that guided this paper’s argument is that the existing literature considers the distributional effects of monetary policy using data on inequality over a short period of time. However, inequalities tend to vary more in the medium-to-long run. We address this shortcoming by studying how changes in monetary policy stance over a century impacted the income distribution while controlling for the determinants of inequality.”

They find that “loose monetary conditions strongly increase the top one percent’s income and vice versa. In fact, following an expansionary monetary policy shock, the share of national income held by the richest 1 percent increases by approximately 1 to 6 percentage points, according to estimates from the Panel VAR and Local Projections (LP). This effect is statistically significant in the medium run and economically considerable. We also demonstrate that the increase in top 1 percent’s share is arguably the result of higher asset prices.

…click on the above link to read the rest of the article…

Russian South Stream 2.0 Comes Out of the Shadows

Russian South Stream 2.0 Comes Out of the Shadows

The new Black Sea gas pipeline Turkish Stream will run under sea from Krasnodar to a landing hubv just west of Istanbul. On November 19, presidents Vladimir Putin and Recep Tayyip Erdogan met in Istanbul to announce the completion of pipeline’s off-shore section.

Pipeline capacity is for 30 bullion cubic meters, bcm, although initial phase capacity will be closer to 17bcm (the first pipe). Currently, Gazprom supplies the above volume (30bcm) to Turkey (ca 16bcm), Bulgaria, Serbia, Slovakia, Hungary and Austria. Turkish market has been supplied via Blue Stream pipeline, and the other countries are supplied via Ukraine.

Based on reports from Russia’s Kommersant (https://www.kommersant.ru/doc/3806415), Gazprom has managed to achieve two feats:

  1. Gazprom has completed laying two (not one) pipes for Turkish Stream, one intended to supply Turkey and another, to supply Southern Europe,
  2. Gazprom secured tenders for purchases of gas from all EU states to be connected to the South Stream project (Bulgaria’s open tender closes in December 2020, but all other countries have already signed onto supply agreements).

Significantly, the tenders were secured in compliance with the EU Energy Directives. This means that Gazprom latest venture has addressed the main cause of the EU’s original objections to the same pipeline prior to 2020. In the case of open tenders process, Gazprom used exactly the same scheme to secure capacity orders for its Nord Stream 2 pipeline to Germany, Czech Republic and Slovakia back in 2020.

California Rooftop Solar Mandate: An example of bad groupthink?

California Rooftop Solar Mandate: An example of bad groupthink?

Here are the key reasons.

Rooftop solar is about as effective in reducing emissions as waving a broom into the smog. UC Berkeley’s Severin Borenstein argued this in his note to CEC Commissioner (http://faculty.haas.berkeley.edu/borenste/cecweisenmiller180509.pdf). Note: Borenstein also alleges that CEC has failed to involve experts in energy economics in its decision making process – something that is not a good policy formation practice.

UC Davis economics professor James Bushnell accused CEC of “regulatory groupthink.” (https://energyathaas.wordpress.com/2020/10/22/how-should-we-use-our-roofs/) and offered an alternative to roof solar that can generate far greater environmental benefits. There are, of course, other, more efficient ways for deriding emissions, including: mandating more urban density, raising home and cars efficiency standards, expanding the renewable energy mandate, improving grid efficiencies and transmission expansion, and so on. Once again, CEC did not allow for any independent assessment of the proposed plans economic and environmental impacts.

…click on the above link to read the rest of the article…

Remember the Russian Attack on the Internet?

Remember the Russian Attack on the Internet?

Of course, the minute there is any suspicion of the ‘nation-state’ actors behind the attack, we know that is the code word for ‘the Russians’. And, of course, given the sheer number of ‘security research’ lackeys eagerly awaiting for the U.S. or UK or EU dollars/pounds/euros in grants and subsidies, the ‘Russian’ spectre loomed large in the wake of Mirai havoc. Here’s a snapshot:

  • http://www.itsecurityguru.org/2020/10/12/research-shows-russian-hackers-could-be-behind-the-mirai-botnet/
  • https://www.nbcnews.com/news/us-news/who-shut-down-u-s-internet-friday-n671011
  • https://twitter.com/hackerfantastic/status/782840355116969984
  • https://www.networkworld.com/article/3130504/security/record-iot-ddos-attacks-raise-bar-for-defenders.html
  • https://www.csoonline.com/article/3144200/security/expect-more-iot-botnet-attacks-mirai-source-code-now-freely-available.html
  • https://www.nytimes.com/2020/10/22/business/internet-problems-attack.html

But, in the end, the famous DoS attack was down to just three U.S. students: https://www.wired.com/story/mirai-botnet-minecraft-scam-brought-down-the-internet/?mbid=social_twitter. Which, sort of, begs a question: how many ‘security experts’ of the ‘Russian spectre looms large over everything’ variety have lost their lucrative contracts with the Government, the media and the think tanks that provide platforms to the endless Russophobic hysteria? My bet is: none. Like in the good old days of the Soviet empire, you can’t get fired for lying in Pravda…

Ifo WorldEconomic Climate Index: 1Q 2020

Ifo WorldEconomic Climate Index: 1Q 2020

The latest warning is from the Ifo World Economic Climate Index.

Per Ifo release: “The Ifo Index for the world economy dropped from 89.6 points to 87.8 points this quarter, drifting further from its long-term average (96.1 points). While assessments of the current economic situation brightened marginally, expectations were less positive than last quarter. The sharp decline in oil prices seems to be having no overall positive economic impact. Growth in the world economy continues to lack impetus.”

In numbers, thus:

  • Headline World Economic Climate Index is now averaging 88.7 over the two quarters through 1Q 2020, which is statistically below 97.7 average for the 2 quarters through 3Q 2020 and 93.2 average for 4 quarters through 1Q 2020. Current 2 quarters average is way lower than 8 quarters average of 98.4. Historical average is 94.9, but when one considers only periods of robust economic growth, the index average is 98.9. Again, current 2 quarters average is significantly below that.
  • Present Situation sub-index 2 quarters average is at 87.0, which is woefully lower than 2 quarters average through 3Q 2020 at 91.6 and is well below 96.0 average for the historical series covering periods of robust economic expansions.
  • Expectations for the next 6 months sub-index is at 90.4 on the 2 quarters average basis, down from 103.5 2 quarters average through 3Q 2020 and below historical (expansion periods only) average of 101.5.

Geographically, per Ifo release: “The economic climate deteriorated in all regions, except in Oceania, Asia and Latin America. In Oceania the climate index stabilised at a low level, and in Asia and Latin America it edged upwards. The indicator is now below its long-term average in all regions, with the exception of Europe.

…click on the above link to read the rest of the article…

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