Tuesday, May 2, 2017

The Market And Energy Page, T+102 -- May 2, 2017

Disclaimer: this is not an investment site. 

Market opening: the rally continues. Dow 30 up 30. Nasdaq at a new all-time record. AAPL at new all-time high. 

GM, Ford: sales come in significantly less than forecast.

Infosys: huge story. Indian company known for outsourcing lower cost engineers to US, now plans to open a 2,000-employee tech center in central Indiana, with another 8,000 jobs for American IT workers in other locations across the country in coming years. This is all part of Trump's making America great again; has to do with H-1B visas.

Fed: set to leave interest rates unchanged; may hint at June hike.

Dow futures: mostly negative overnight; now down about 16 points for the Dow 30
WTI: recovering a bit, up about 0.75%; back over -- just barely -  $49

COP misses by 3 cents; shares down about 1.5% in pre-market trading.

Peak Oil? What peak oil? BP says 1 billion additional bbls "possible" in Gulf of Mexico hubs - Reuters via Rigzone. Data points:
  • new seismic imaging technology makes forecast possible
  • "full waveform inversion" imaging technology applied to data from Atlantis, Mad Dog, Thunder Horse, and Na Kika fields
Peak demand? What peak demand? "Enormous" demand for oil forecasted in 2019 - 2020 -- KPC CEO -- Rigzone. Data points:
  • talking their book: Kuwaiti Petroleum Corporation
  • same argument: the demand will arise as a result of the lack of investment in the upstream industry during the downturn
  • "probably" $70 - $80 oil
  • comments
    • he has a different definition of demand that I so
    • it sounds like he's talking about a supply problem in 2019 - 2020, not a demand problem
    • $70 - $80/bbl hardly represents an "enormous demand"
Rebalancing? oil price optimism wears off as Texas wildcatter drill on -- Bloomberg data points:
  • investors increasingly skeptical that oil price rebound is on the horizon
  • producers in Texas are leading the longest shale revival since 2011
  • making OPEC-led efforts to rebalance the market increasingly difficult
  • WTI slid 5.4% during the report week, falling below two technical barriers -- the 50-day and 100-day moving averages; the drop below $50 was another barrier broken
OPEC cut: another six months won't be enough -- Bloomberg data points:
  • OPEC cuts may need to be extended through end of next year (2018) -- well beyond end of this year, as currently being discussed
  • talk of sub-$40 oil if US stockpiles increase
  • Harold Hamm: US oil output is poised to expand this year by at least 400,000 bopd, most of it from the Permian Basin, to a level of about 9.4 million bopd
Other headlines from Rigzone 
  • Libya oil rebounds as major fields restart; back to more than 700,000 bopd; Libya is exempt from any OPEC cuts
  • Total will invest $500 million to produce shale gas in Argentina -- note: shale gas, not shale oil 
  • Saudi Aramco cut it oil price for Asia due to losing market share; cut 40 cents/bbl to an 85% discount to the regional benchmark; Saudi Arabia ceded market share to Iran and Iraq by making deeper cuts in output than it promised 
Market, miscellaneous:
  • Shire up more than 2.5%; EPS $3.62 vs $3.32 forecast 
  • Aetna reports 1Q loss on failed Humana bid; beat earnings estimate; after scaling back its participation in Obamacare, ups 2017 forecast
  • Encana beats forecast for both earnings and revenue
  • Noble's 1Q17 loss narrower than expected; beats on revenue
  • BP earnings buoyed by rising crude prices 
  • Mastercard beats EPS forecast; could trade at all-time high today

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