September 2019 – Page 156

Yergin: Expect Extreme Volatility In Oil Markets

Authored by Tsvetana Paraskova via OilPrice.com,

Rising pipeline takeaway capacity in the Permian and global oil demand growth at its weakest in a decade are set to lead to more volatility in oil prices in the near term, a prominent energy expert said, joining a growing number of analysts who see prices further depressed by slowing economies and crude demand.

“The pipeline bottlenecks are in the process of being resolved, so a lot more oil is going to come onto the market by the end of the year. We expect the U.S. (crude oil output) to be up to 13 million barrels a day,” IHS Markit’s vice chairman Daniel Yergin told CNBC on Tuesday.

While U.S. production will continue to add more supply in an already oversupplied global market, on the demand side, expectations are getting increasingly pessimistic.

“We’re in one of the weakest periods since 2008 and we think demand growth this year is under a million barrels per day. So you have that factor at the same time as you have more oil coming to the market. So expect some volatility,” Yergin told CNBC in an interview on the sidelines of a conference in Abu Dhabi.

Despite expectations of volatility, IHS Markit’s vice chairman sees Brent Crude prices range-bound in the US$55-65 range.

Yergin is not alone in predicting substantially lower oil demand growth this year than originally anticipated.

The International Energy Agency (IEA) revised down its demand growth estimates for 2019 in its latest Oil Market Report, by 100,000 bpd to 1.1 million bpd, after seeing that between January and May demand growth was just 520,000 bpd, the lowest increase for the period since 2008.

Several Wall Street investment banks have already warned that the escalating U.S.-China trade war raises the odds of an economic slowdown and subsequent low oil demand growth. Some banks have already cut their oil demand growth estimates for this year, saying that oil demand could grow at its slowest pace in at least half a decade.

In July, Barclays cut its oil price forecasts for the second half of 2019, saying that demand growth would be just over 1 million bpd this year. Barclays revised down its forecasts by US$2 to US$69 per barrel Brent Crude and US$61 per barrel WTI Crude.

In August, Morgan Stanley said that demand growth continues to soften amid slower economic growth and cut its forecasts for Q3 and Q4 2019 for Brent Crude to US$60 from US$65 per barrel, and for WTI Crude to US$55 from US$58 a barrel.

This week, Goldman Sachs revised down its oil demand growth estimate to 1 million bpd, down by 100,000 bpd from the previous outlook.

“Our oil supply-demand outlook for 2020 calls for additional OPEC production cuts to keep inventories near normal,” Goldman’s analysts said in a note, as carried by Reuters.

In its Short-Term Energy Outlook (STEO) published on Tuesday, the EIA also cut its global demand growth estimate for 2019 to 900,000 bpd, down by 100,000 bpd from the August forecast.

“If realized, 2019 would be the first year when demand growth is less than 1.0 million b/d since 2011,” the EIA said, and slashed its Brent Crude forecast by US$2 from the August outlook to US$63. For 2020, EIA expects annual average Brent Crude prices to slightly drop to US$62 a barrel, which would be US$3/b lower than the forecast in August.

It’s not only demand that will weigh on oil prices for the rest of the year—supply out of the U.S. is expected to increase with reduced takeaway constraints from the Permian to the U.S. Gulf Coast. The Cactus II crude oil pipeline added an estimated 670,000 bpd and the EPIC Midstream natural gas liquids pipeline, which was repurposed for crude oil, added another 400,000 bpd capacity, EIA said.

Thanks to Cactus II and EPIC, outbound shipments of crude oil from Corpus Christi surged to a record in the first week of September, RBN Energy said on Monday, noting that the data may be “suggesting that the expected surge in exports of Permian oil is finally occurring.”

Should the “surge in export volumes continue to build in the weeks ahead, the crude-oil export infrastructure at Corpus may finally get the benefit of the doubt,” RBN Energy said.

Yet, a growing group of analysts believe that U.S. shale production growth will considerably slow down for the rest of the year, giving oil bulls hope that the global oversupply concerns could be overblown.

Supply and demand issues and the unpredictable nature of the ongoing U.S.-China trade war are setting oil prices for an extended period of volatility.

Tyler Durden

Thu, 09/12/2019 – 09:26

The mischief and the statute 2

In a post earlier today, I mentioned a new paper on statutory interpretation called The Mischief Rule. Now, in a series of posts, I’ll blog parts of the introduction with framing comments. You might be interested in this if you’re a lawyer or law student who cares about statutory interpretation (i.e., if you’re a lawyer or law student!), if you’re a linguist interested in legal examples of pragmatics or tacit domain quantifiers, or if you’re following the Supreme Court’s docket and especially the Title VII case. If you want the footnotes, go to the article.

So here goes. The introduction starts with an old case, Nashville & K. R. Co. v. Davis, 78 S.W. 1050 (Tenn. 1902). We can call it the stop-the-train case. It’s especially hard for a textualist who rejects the mischief rule (e.g., Justice Scalia), but not for a textualist who embraces the mischief rule:

A Tennessee statute imposed duties on railroad engineers. If a railroad engineer found an animal or obstruction on the tracks, the statute required “the alarm whistle to be sounded, and brakes put down, and every possible means employed to stop the train and prevent an accident.” But what counted as an “animal” on the tracks? Cows and horses, yes. But what else? Did all the trains in Tennessee have to stop for squirrels?

The stop-the-train case poses difficult questions for some interpretive theories, especially textualism. The text does not identify a stopping point in what counts as an animal. Nor is there a dictionary definition that will include cows but exclude squirrels. Is a textualist interpreter duty-bound to say that trains have to stop for squirrels?

There is a legal rule that allows the interpreter to escape this impasse. The mischief rule instructs an interpreter to consider the problem to which the statute was addressed, and also the way in which the statute is a remedy for that problem. Put another way, the generating problem is taken as part of the context for reading the statute. In the real stop-the-train case, the court found the mischief to be especially train derailments; the court accordingly held that three domesticated geese were not “animals” within the meaning of the statute. In the court’s view, failing to consider the mischief would have meant that trains had to stop even for “[s]nakes, frogs, and fishing worms.”

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The mischief and the statute 2

A Tennessee statute imposed duties on railroad engineers. If a railroad engineer found an animal or obstruction on the tracks, the statute required “the alarm whistle to be sounded, and brakes put down, and every possible means employed to stop the train and prevent an accident.” But what counted as an “animal” on the tracks? Cows and horses, yes. But what else? Did all the trains in Tennessee have to stop for squirrels?

The stop-the-train case poses difficult questions for some interpretive theories, especially textualism. The text does not identify a stopping point in what counts as an animal. Nor is there a dictionary definition that will include cows but exclude squirrels. Is a textualist interpreter duty-bound to say that trains have to stop for squirrels?

There is a legal rule that allows the interpreter to escape this impasse. The mischief rule instructs an interpreter to consider the problem to which the statute was addressed, and also the way in which the statute is a remedy for that problem. Put another way, the generating problem is taken as part of the context for reading the statute. In the real stop-the-train case, the court found the mischief to be especially train derailments; the court accordingly held that three domesticated geese were not “animals” within the meaning of the statute. In the court’s view, failing to consider the mischief would have meant that trains had to stop even for “[s]nakes, frogs, and fishing worms.”

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Tesla Model S Spotted At Nurburgring Reportedly “Broke Halfway Through A Lap”

After Porsche announced that its 750 HP Taycan EV, being dubbed a “Tesla-killer”, had set a 7:42 time at the Nurburgring, Elon Musk quickly Tweeted out that the Model S would be there the “next week” to make a run of its own.

That’s when, unfortunately, Road and Track actually called the Nurburgring, who informed them of the truth at the time: that Tesla did not, in fact, have an upcoming track time booked – and that the Nurburgring was instead booked solid for the season.

But one week later, a Model S was spotted at a shop outside of the Nurburgring with “a clear wicker attached to its trunk lid and Michelin Pilot Sport Cup 2 Rs, some of the stickiest and most aggressive tires you can buy today.”

Oh, gee, surprise, Tesla’s planning to cheat to try and set a lap time at the Nurburgring. Cool, cool. pic.twitter.com/CSyIDf1ih9

— Brian Gluckman (@bgluckman) September 10, 2019

But, despite the Model S being at the Nurburgring, Road and Track says they heard the Model S would be instead participating in the Ring’s Industry Pool – where timing is “strictly prohibited” and “there’s so much traffic that a fast lap is impossible”.

Some sources on the ground said that Tesla has booked a private track to set a time for next week. The Nurburgring issued a schedule change for September 21, inserting a new 30 minute private window into a session that was already set for public laps and Ring taxi laps. Carving out time from a public lap session was likely an “expensive proposition” and “guaranteed to make the track money”.

Meanwhile, Musk himself has said that the run probably won’t be this week.

But we probably won’t try for best lap time this week, as we need to review & tune Model S thoroughly for safety on Nürburgring, especially Flugplatz section

— Elon Musk (@elonmusk) September 11, 2019

Even funnier is that a Model S had already been spotted on the track, but wound up breaking halfway through a lap:

We’ve also heard that a Model S, likely the one with the wicker and the Cup 2 Rs, was on the track already and was absolutely flying, pulling away from other cars, but broke halfway through a lap.

Many have noted the configuration of the Model S that was spotted near the track, asking the question of whether or not the car would really be setting a record if it doesn’t offer its modified configuration to customers. Will the company be running a special edition of the vehicle made just for the Nurburgring? Even better, will the Model S battery swap make an appearance?

Meanwhile, Musk Tweeted early Thursday morning that the Model S he plans on running has 7 seats.

Model S at Nürburgring has 7 seats

— Elon Musk (@elonmusk) September 12, 2019

…a claim that was rightfully met with immediate skepticism from social media…

Sure it does. You sit in the back during the lap and prove it.

— cazin678 (@cazin678) September 12, 2019

Tyler Durden

Thu, 09/12/2019 – 09:05

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Citing Safety, Some Students Oppose Removal of UT-Austin’s ‘Free Speech Zone’

Texas has passed a law telling public universities to let people express their First Amendment rights in any public outdoor spaces. As a result, the University of Texas at Austin has ended its policy of limiting certain sorts of speech to a designated “free speech zone.”

University President Gregory Fenves seemed happy with the new policy, telling The Daily Texan that “Our campus is a hub for people to gather and share different perspectives and experiences. This freedom is a constitutional right that has always been the foundation upon which students learn and faculty members teach and conduct research.”

It does indeed violate the First Amendment when public universities treat specific areas as “free speech zones” and try to restrict controversial speech in other spaces. The entire campus should be a free speech zone.

But not all students are pleased with the change in policy, The Daily Texan notes:

“What (some organizations) are currently doing is making students feel unsafe and unwelcome,” [University Democrats president Joe] Cascino, said. “I believe that universities should be able to step in and keep people like (Richard) Spencer or useless incendiary protests like (Young Conservatives of Texas’) or Turning Point’s from happening.”

In other words, the head of one of the campus’s most important progressive organizations believes that his equivalents on the right—the Young Conservatives and Turning Point USA—should be denied their right to speak. And that his justification for this is emotional safety. This precise threat to free speech is the main theme of my new book, Panic Attack: Young Radicals in the Age of Trump.

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Citing Safety, Some Students Oppose Removal of UT-Austin’s ‘Free Speech Zone’

But not all students are pleased with the change in policy, The Daily Texan notes:

“What (some organizations) are currently doing is making students feel unsafe and unwelcome,” [University Democrats president Joe] Cascino, said. “I believe that universities should be able to step in and keep people like (Richard) Spencer or useless incendiary protests like (Young Conservatives of Texas’) or Turning Point’s from happening.”

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Gold Surges After Draghi Unveils Moar Easing

It seems open-ended ECB QE was just the thing that gold-buyers were waiting for as heavy volume sent gold futures soaring this morning…

Silver is not moving so much for now…

US rates are also tumbling (dragged down by Bunds)…

Source: Bloomberg

Interestingly, precious metals are surging alongside the dollar (as EUR fades)

Source: Bloomberg

Tyler Durden

Thu, 09/12/2019 – 08:49

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Lindsey Graham: My Goal Is To Declassify FISA Warrant Applications

Via SaraACarter.com,

“My goal is to explain to you and the American public how the system failed and make sure it never happens again,” said Sen. Lindsey Graham on ‘Hannity’ show on Wednesday night.

“We’re going to pursue this in a transparent fashion,” Graham said.

“We’re going to declassify as much as we can, including the FISA warrant applications.”

Graham said he will seek to release to the public as much information possible about former British spy Christopher Steele.

“I’m going to give you all the information that was in the system about how suspicious people were of Christopher Steele, how biased he was, [and] let you read it for yourself. Transparency and accountability is my goal,” he said.

“The system had a lot of notice about [Christopher Steele] bias,” Graham said.

“Mr. Durham will make a decision as to who to prosecute, if anyone,” he added, referencing John Durham, the federal prosecutor tasked by Attorney General William Barr with investigating the origins of the Russia probe.

Tyler Durden

Thu, 09/12/2019 – 08:45

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Core Consumer Prices Surge At Fastest Rate Since 2008

After a hotter-than-expected producer price print yesterday, consumer prices were more mixed with headline CPI rising less than expected and core CPI rising more than expected.

In fact, core CPI rose 2.4% YoY (2.3% exp) – which is the hottest since September 2008…