Category: INO.com Contributors

Analysis Of US Crude Production

Posted on by Robert Boslego

According to the Energy Information Administration, U.S. petroleum inventories (excluding SPR) built by 8.8 million barrels last week to 1.461 billion, whereas SPR stocks were unchanged. Total stocks stand 171 mmb above the rising, rolling 5-year average and about 157 mmb higher than a year ago. Comparing total inventories to the pre-glut average (end-2014), stocks are 402 mmb above that average.

Total US Oil Stocks

Crude Production

Production averaged 11.1 mmbd last week, up 100,000 b/d from the prior week, and 11.025 mmbd over the past 4 weeks, off 7.7 % v. a year ago. In the year-to-date, crude production averaged 12.129 mmbd, up 0.4 % v. last year, about 50,000 barrels per day higher than a year ago.

US Crude Production

Other Supply

I have previously noted how the "Other Supply," primarily natural gas liquids and renewables, are integral to petroleum supply. The EIA reported that it fell by 30,000 b/d v. last week at 6.789 mmbd. The 4-week trend in "Other Supply" averaged 6.958 mmbd, off 0.4 % over the same weeks last year. In YTD, they are 0.7 % higher than in 2019. Continue reading "Analysis Of US Crude Production" →

What To Expect From A Biden (And Bernie) Fed

Posted on by George Yacik

Now that Judy Shelton has passed the first big hurdle to be confirmed as a member of the Fed – passing muster with the Senate Banking Committee by a 13-12 party-line vote – let’s assume that the full Senate will confirm her. While it’s not a slam dunk, Republicans do control the chamber by a 53-47 majority, so even if Mitt Romney votes against her, as he says he will, she’s probably in.

Despite what her many detractors believe – that she has the power all by herself to return the U.S. to the gold standard and direct the Fed to do whatever President Trump wants – that probably won’t happen unless Fed chair Jerome Powell resigns or Trump figures out a way to remove him without triggering a massive global financial panic safely. Even then, it’s a fantasy. So Shelton is probably going to be confirmed, and nobody is going to die as a result.

So let’s turn instead to what a Fed under a President Biden might look like. Luckily, the former vice president has publicly revealed what he has in mind, in a short and concise 110-page press release entitled, “Combating the Climate Crisis and Pursuing Environmental Justice,” the product of a “unity task force” set up by Biden, and former presidential candidate Bernie Sanders, whom I guess wrote most of it. I’ll save you the trouble of pouring through it unless you’re feeling masochistic.

Granted, there’s only a little (fortunately) in the tome that deals with the Fed. Indeed, through the magic of word search, I found that there are only eight references to “Federal Reserve” in the document, but what’s there is enlightening about their thinking. No, there’s nothing in there about Fed monetary policy, I suppose to respect the Fed’s independence. Continue reading "What To Expect From A Biden (And Bernie) Fed" →

Precious Metal Futures Continue To Shine

Posted on by Mike Seery

Gold Futures

Gold futures in the August contract settled last Friday in New York at 1,810 an ounce while currently trading 1,902 up about $92 for the trading week as prices are right near all-time highs trading higher for the 5th consecutive session.

If you have been following my previous blogs, you understand that I thought gold prices would break 2,000. I think that could possibly happen in next week's trade as prices still look cheap, in my opinion, and if you are long a futures contract continue to place the stop loss under the 10-day low standing at the 1,791 area as an exit strategy.

Gold prices are trading far above their 20 and 100-day moving average as this is the strongest trend out of all asset classes at the current time. Who knows how high prices can go as that is why the theory states to hold on to winners and exit losers quickly.

TREND: HIGHER
CHART STRUCTURE: IMPROVING
VOLATILITY: HIGH

Silver Futures

Silver futures in the September contract settled last Friday in New York at 19.76 an ounce while currently trading at 23.03 up over $3 for the trading week with prices touching a 6 year high. I have been recommending a bullish position over the last month or so from around the 18.61 level, and if you took that trade, continue to place to stop loss under the 10-day low at 19.24 as the exit strategy. However, the chart structure will improve in next week's trade; therefore, the monetary risk will also be reduced. Continue reading "Precious Metal Futures Continue To Shine" →

New Sports Betting ETF Hits the Market

Posted on by Matt Thalman

Since the world of sports was put on hold due to the spread of Covid-19 and the attempt to slow its spread, many market participants have noted the rise in 'retail' investors. But, many have claimed that these 'retail' investors aren't just your average mom and pop investor, the young high school or college kid who wants to make a little money while stuck at home, (although we have seen a slight uptick from these age groups and demographics participating in the stock market over the past few months.) Some believe the largest new group of investors with the most impact on the markets in recent weeks are the ex-sports gamblers, especially those gamblers that prefer online sports gambling.

I say "ex"-sports gamblers because besides just recently when PGA Tour Golf and NASCAR began competing again, sports gamblers have not been able to bet on anything when all sports activities were shut down due to Covid-19. So, it is not to say that once professional major league sports begin to operate once again in the US, these sports gamblers won't go back to their old ways of betting on games and not stocks.

However, their 'old' ways of gambling may be changing in a big way in the near term. The online fantasy sports gambling website, DraftKing (DKNG), recently went public and was already operating an online sportsbook and casino before the countrywide shutdown. Furthermore, DraftKings competitor FanDuel, owned by Flutter Entertainment (FLTR), had also already begun to operate online sports gambling websites and apps in states that have legalized sports betting before the Covid-19 shutdowns and stoppage of professional sports. Even MGM Resorts (MGM) has begun partnering with companies to build online sportsbooks and casinos in states those activities are legal.

Some believe that due to the Covid-19 shutdowns, State and local governments who currently don't allow sports betting or online sports gambling will pass laws to allow these activities in the near term as governments try to find new forms of tax revenue. So, while not only is it possible that sports gamblers are now gambling on stocks, but they may be able to legally gamble on sports, regardless of where they live, soon. Continue reading "New Sports Betting ETF Hits the Market" →

Silver Begins Big Upside Rally Attempt

Posted on by Chris Vermeulen

The move we saw in Silver early this week to new 6-year high price levels, above $22.60, is quite likely the biggest upside move in Silver since the bottom in March 2020 – after the US stock market collapsed because of the COVID-19 virus event. This new rally in Silver is likely the move we’ve been suggesting to our followers relating to a series of measured upside price moves totaling approximately $5.30 in each advance.

As traders, watching bonds accelerate moderately higher as the US Dollar falls and the stock market attempts new lofty levels, we are intrigued by the move in metals because it suggests a large segment of investors believe a bubble is nearing very peak valuation levels. The only reason metals, particularly Silver, would be accelerating as it has recently is that traders have suddenly adopted a stronger demand for second-stage hedging of risk.

Gold is the traditional hedge for many traders in times of risk. Silver, being the second-tier hedge, typically start to rally 4 to 6+ months after Gold begins to move substantially higher. Gold is currently trading near all-time highs – near $1820. Silver just recently bottomed in March 2020 near $11.65 and has rallied more than 70% to current levels – above $20.35. If our research is correct, Silver will rally to levels above $26 within this current upside rally.

The multiple measured moves in Gold and Silver suggest waves of price advances happen in a series of structured upside price moves. We believe this current upside move in Silver will push price levels above $26 per ounce. If Gold continues to rally as Silver rallies, then future measured moves should target $31.50 and $36.75 in Silver – possibly higher. Continue reading "Silver Begins Big Upside Rally Attempt" →