Will markets ever work again? The actions of the LME this week, in forgiving a Chinese nickel producer and certain brokers who dealt with the company their terrible trades suggest that the answer is no. James Mackintosh reports for The Wall Street Journal: The tide went out this week in London’s nickel market, and we discovered—in Warren Buffett’s immortal words—who had been swimming naked: a giant Chinese producer that couldn’t meet its margin calls, additional security brokers require when leveraged trades lose money. Instead of letting the market cleanse itself of this indebted trader, … [Read more...]
THE JONES ACT: The Reason America Buys Russian Oil
Americans don't use Russian oil because it makes economic sense, they use it because bad policies have made American oil for American consumers make less sense. Chief among these bad policies is the Jones Act, which strangles the ability of American oil producers to get their product to consumers in the same country. At Cato Institute, Colin Grabow explains: With imports of Russian oil (as well as coal and natural gas) now banned, the country’s refineries must decide on alternative sources. The good news is that there are U.S. grades of crude oil well‐suited for refineries on the East and … [Read more...]
Just Wait Until Fuel Price Inflation Hit Supermarkets
You have been enduring an era of Bidenflation for a little more than a year now, and you're used to watching prices climb ever higher. But what's happening to fuel prices right now is shocking no matter how accustomed you are to inflation. The problem with fuel price inflation is that sooner or later, it hits everything that moves. Just imagine what will happen as higher fuel prices hit an already stretched-thin trucking fleet, and those costs are pushed on to grocery stores and retailers. Ashley Soriano reports for FoxBusiness: Many Americans are penny-pinching as the cost of food – and just … [Read more...]
Ukraine Invasion Breaks the Nickel Market
The invasion of Ukraine by Russia, and the subsequent sanctions placed on Russia by most of the world, have broken the nickel market. Russia is one of the world's largest nickel exporters and attempts to shut off that supply have led to market fallout. The FT reports: The London Metal Exchange suspended trading in one of its main contracts after a vicious “short squeeze” sent the price of nickel soaring and left a Chinese metals tycoon facing billions of dollars in potential losses. Nickel prices doubled on Tuesday and briefly rose above a record $100,000 a tonne as banks and brokers … [Read more...]
MARKET TURBULENCE: Investors Must Navigate Russia-Ukraine War
It’s in times like these where you need to have Your Survival Guy investment plan in place and be vigilant about your personal security. You need to start off by understanding the value of compound interest, and of counterbalanced portfolio returns. Those are the foundations of any investment plan that seeks to ride through storms like the one in Europe today. The war in Ukraine is causing large increases in oil supplies as oil traders prepare for possible bans on Russian oil. The Wall Street Journal reports: The S&P 500 dropped 1.4%, while the Dow Jones Industrial Average declined 1.2%, … [Read more...]
BIDENFLATION: Gas Prices Started Rising Well Before War in Ukraine
Prices for gasoline are going up, and the media is blaming it all on the war in Ukraine. Certainly, Russia's invasion of Ukraine is affecting global markets, but gasoline prices began rising well before the bullets began to fly. Look at the chart below on the price of gasoline in New York Harbor since Joe Biden was inaugurated. Most of the increase in gasoline prices happened well before Ukraine was invaded. Action Line: Don't fall for the idea that the war in Ukraine is the root cause of energy price spikes. The root cause lives in the White House. It's not just gasoline either, … [Read more...]
Oil Prices Soar on Russian Attack
Oil and natural gas prices are soaring on the news of a Russian attack on Ukraine. Oil prices are back above $100 per barrel. A perfect storm of excess global liquidity, years of starving oil and gas companies of capital in favor of alternative energy producers, and a major oil producer disrupting the current world order could see prices spike even higher. Russia’s invasion of Ukraine is an undeniable reminder that oil remains the world’s most important commodity. Joe Wallace and Jenny Strasburg report for The Wall Street Journal: A global oil benchmark surged above $100 a barrel for the … [Read more...]
As US-Russia Tensions Push Oil Higher, Drillers Rediscover Shale Basins
With economies recovering from the pandemic, and tensions between Russia and the United States pushing oil prices higher than they already were, shale drillers are taking another look at basins they had abandoned when the pandemic hit. Collin Eaton reports for The Wall Street Journal: Spurred by the highest oil prices in years, shale companies are moving drilling rigs back into oil fields that were all but abandoned a few years ago. Private oil producers are leading an industry return to places like the Anadarko Basin of Oklahoma and the DJ Basin in Colorado, where drilling had almost … [Read more...]
FEAR: Gold Prices Surge on Potential Russia-Ukraine War
As tension in Ukraine hits extreme levels, investors are heading for the safety they see in gold. Suzanne O'Halloran reports for Fox Business that gold prices have spiked to a nine-month high in response to the risk of war. She writes: Nervous investors, spooked by a Russian-Ukraine conflict, barreled into gold on Thursday, driving the price to a level not seen since June of 2021: $1,900.70 and upward momentum may continue, aiding the SPDR Gold ETF. "Gold has key resistance around the $1920 to $1930 zone, but if the [safe] haven bid remains strong, bullish momentum could support a move … [Read more...]
Will Shale Drillers Come off the Sidelines at $100/Barrel?
With oil prices nearing $100 per barrel, many shale drillers may be rethinking their restraint. Since the COVID pandemic collapsed oil prices and demand, shale drillers have consolidated and restrained themselves from drilling too many new wells in what is a dwindling supply of the best producing areas. Now, some may be rethinking that restraint as high prices make increasing production irresistible. Derek Brower reports in the Financial Times: Oil’s vault above $95 a barrel is tempting US shale energy executives to fire up drilling rigs in search of more crude, risking the wrath of Wall … [Read more...]
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