Thursday, August 7, 2014

US Is Gushing Oil (excerpt)

In the US, June’s merchandise trade deficit narrowed to $60.3 billion from May’s $63.3 billion as oil imports dropped $0.9 billion during the month. At an annual rate, the trade deficit in crude oil and petroleum products dropped by $181 billion over the past 36 months through June.

Compared to the rest of the world, it’s easy to gush over the US economy, which is gushing so much oil. US crude oil field production has been soaring since 2012, and was up to 8.6 million barrels per day during the week of August 1. That’s the highest since November 1986. All this oil reduces the likelihood that a geopolitical crisis might trigger a spike in oil prices that could cause a recession and a bear market in stocks, at least in the US.

Today's Morning Briefing: Geopolitical Matters.(1) Discounting geopolitical risk. (2) Will push come to shove? (3) Panic, or buying opportunity? (4) Ukraine weighing on Russia MSCI and Eurozone MSCI too. (5) Flight to safety boosting demand for Eurozone bonds. (6) Historically low yields in Eurozone pushing yields down in US despite tightening outlook for Fed. (7) Eurozone may be slipping back into recession owing to latest crisis. (8) Bad news out of Italy and Germany. (9) US is gushing oil. (10) Focus on overweight-rated S&P 500 Transportation. (More for subscribers.)

No comments: