U.S. Crude Oil Production Slowed in May

The Energy Information Administration reported that May U.S. crude oil production averaged 10.442 million barrels per day (mmbd), off 30,000 b/d from April’s all-time record high of 10.472 mmbd.

However, May’s production was also lower than 10.461 mmbd posted for March. From December through March, production had spiked by 423,000 b/d.

Part of the explanation for the lack of continued growth is the unplanned maintenance in the Gulf of Mexico. Last month, GOM production dropped by 75,000 b/d. In April, it had declined by 99,000 b/d. In EIA’s Short-Term Energy Outlook, May’s GOM production was forecast to increase by 200,000 b/d from April.

Otherwise, increases in North Dakota (25,000 b/d) and in Texas (20,000 b/d) were also relatively modest.

U.S. Crude Oil Production

The EIA-914 Petroleum Supply Monthly (PSM) figure was 304,000 b/d lower than the weekly data reported by EIA in the Weekly Petroleum Supply Report (WPSR), averaged over the month, of 10.706 mmbd. EIA’s most recent weekly estimate for the week ending July 27th was 11.0 mmbd. Continue reading "U.S. Crude Oil Production Slowed in May"

Winklevoss Bitcoin ETF Rejected Again

In March of 2017 the Winklevoss twins had their first Bitcoin ETF proposal rejected and now the second Winklevoss Bitcoin ETF proposal was dismissed in July of 2018 by the Securities and Exchange Commission. The reason all of this matter is because the Winklevoss twins where the first to have the SEC rule on a Bitcoin ETF back in 2017, and now that their proposal has been rejected for a second time things are starting to look a little bleak for investors who want a Bitcoin ETF.

First and foremost, the Securities and Exchange Commission that made the ruling expressed concern about Bitcoin’s trading reliability and security; two significant issues which don’t appear to be easy fixes anytime soon. The commission went on to say “The record before the commission indicates that a substantial majority of bitcoin trading occurs on unregulated venues overseas that are relatively new and that, generally, appear to trade only digital assets.” The commission stated that more then 75% of Bitcoin trading happens on unregulated foreign exchanges.

But, the commission did note that regulated Bitcoin markets are in their early stages of development and that if they further grow, the commission would then review the idea of allowing a Bitcoin ETF based on SEC requirements. Continue reading "Winklevoss Bitcoin ETF Rejected Again"

Trade Tensions Overshadow Apple Earnings

Hello traders everywhere. The stock market started out the day in positive territory mostly due to positive earnings for Apple Inc. (AAPL), which hit an all-time high of $201.32 and still trading +5% higher on the day. However, trade tensions between the U.S. and China have taken control of the market action and pushed stocks lower.

The Trump administration's unpredictability on trade has been in the spotlight in the last 24 hours after reports that talks between Washington D.C. and Beijing were set to resume were quickly overtaken by a threat to raise tariffs by 25%, instead of the initially proposed 10%, on $200 billion worth of imported Chinese goods. Of course, China vowed to retaliate if the United States slapped further tariffs.

Trade Tensions Overshadow Apple Earnings

The Fed decision, which is due at 2 pm EDT today is also weighing on traders minds. While a rise in interest rates is not expected today, discussion on trade or where the Fed is thinking of heading could be on the table and might provide clues as to their future moves. Will they still act on the two remaining rate hikes that they had mentioned earlier in the year? Continue reading "Trade Tensions Overshadow Apple Earnings"

Hedging Energy Sector Oil Price Risk

Volatility in oil prices makes investing in the energy sector a risky proposition. The collapse in oil prices following the OPEC meeting in November 2014, at which Saudi Arabia announced its intent to flood the market to put American shale oil producers out-of-business, resulted in a rout in energy equities prices.

The Energy Select SPDR ETF (XLE) fell by 37 percent from November 26, 2014, to January 20, 2016. For many investors, the drop had become too large to sustain, and they closed their positions, locking-in a substantial loss.

XLE has recovered its loss, and as of July 27th, the price was nearly identical to its value on November 26th, 2014. But the recovery in oil prices, due to heightened geopolitical risks, also makes them vulnerable to another downward correction.

Citicorp, for example, issued a forecast proclaiming that “the bull argument is based on a faulty analysis,” and that oil prices “will fall back into a band between US$45 and US$65 in just over a year.”This raises the question of whether investing in the energy sector represents an attractive risk-reward opportunity. Continue reading "Hedging Energy Sector Oil Price Risk"

NASDAQ Breaks Through Key Technical Support

Hello traders everywhere. The NASDAQ has broken through a key technical support level at $7649.58 where the 50-day moving average stands trading -1.3% lower on the day. The fall lower comes on the heels of a lackluster Friday trade where we saw the NASDAQ fall -1.5% to close out the week. We'll have to watch and see if the index continues lower or if it will bounce off support and head higher having tested the 50-day MA twice in the last two months before bouncing off it and heading higher. Will the third time prove to be different?

Key Technical Support

The reason for the sharp sell-off can be directly attributed to the FAANG stocks as they continue to be put under selling pressure. The leader of the tech sell-off continues to be Facebook Inc (FB) as it sheds another -3.7% on the day continuing its historic three-day drop. Not to be outdone though Netflix Inc. (NFLX) is down -4.7%, Alphabet Inc. (GOOGL) -1.6%, Amazon.com Inc. (AMZN) -1.5% and Apple Inc. (AAPL) -.6%. Continue reading "NASDAQ Breaks Through Key Technical Support"