Month: May 2024

Aluminum prices in London reached their highest in two years as the industrial metals rebound theme continued, driven by a combination of supply constraints and the prospect of increased demand in China and the US. 

The latest driver for the silvery-white, lightweight metal, used in everything from vehicles to aircraft to window frames to soda cans, comes as China, the world’s top producer, signaled overnight aggressive emission-cutting targets for smelters, in return, tighter metal capacity. 

In a further boost for the bulls, China’s State Council pledged to strengthen capacity limits in industries from steel to alumina in a work plan for energy conservation and carbon reduction in 2024-25. The move to constrain additional supply comes at a time when the transition to greener energy is boosting demand for copper and aluminum.

The country will strictly control new capacity for copper smelters and alumina output, and take a reasonable approach in allocating fresh capacity for silicon, lithium and magnesium, the government said late Wednesday.

The government also reiterated strict implementation of the “aluminum swap scheme,” or the requirement for any new smelter to be matched by closure of an existing one. New capacity for aluminum, alumina, polysilicon and lithium batteries must meet advanced levels of energy efficiency, it added. –Bloomberg

With the US economy chugging along with the US government spending $1 trillion every 100 days, i.e., stealth stimulus, demand for metals and other commodities has increased. Easing in China has also boosted the prospect of demand increases for industrial metals. However, Chaos Ternary Research Institute wrote in a note that a near-term pullback in aluminum prices is quite possibly because of inventories in China and deliveries to the London Metal Exchange, which remain elevated. 

In markets, aluminum prices on the LME rose 1.4% to $2,734 a ton. 

The historic squeeze in New York copper futures fizzled this week, trading below the record high. 

Industrial metals tracked by Bloomberg have soared to a 1.5-year high. 

As tracked by Bloomberg, spot commodity prices have risen this year to 1.5-year highs. 

In a note titled “The 5D Bull Makret,” Goldman analysts led by Daan Struyven and Samantha Dart wrote, “We remain selectively bullish commodities because 1) demand growth remains solid, 2) we see more structural upside in industrial metals and gold, and 3) oil’s geopolitical risk premium has shrunk. We expect commodity total returns to rise from 13% YTD to 18% by year-end.” 

The analysts provided more insight into the 5D trends:

• Disinvestment: low investment in commodities induces select tightness
• Decarbonization & climate change: require higher prices to attract green capex
• De-risking (hedging): geopolitical de-risking and strategic restocking support demand for gold and critical commodities
• Datacenters & AI: support demand via power and via higher incomes
• Defense spending: support demand for metals and distillate fuels

This comes as global Purchasing Managers’ Index data has turned up. 

To sum up, rising commodity prices are yet more troubling signs for Jerome Powell & the gang in their attempt to slay the wicked inflation monster. 

By Simon White, Bloomberg Markets Live reporter and strategist

Risk assets will face a less-easy ride as Treasury bill issuance falls and coupon (notes and bonds) issuance rises, weighing on central-bank reserves.

Nothing lasts forever. The Treasury tilted issuance towards bills last year – the Yellen pivot – which allowed the market to continue to rally despite the inundation of government debt. After reaching 23% in March, the bills proportion of total debt fell back to 22.2% in April, the biggest monthly drop since March 2023. The Yellen pivot is fading.

But the largest peacetime fiscal deficit still needs funding. That means good old-fashioned bond issuance is starting to take up the slack as bill issuance falls back.

Reserves have started to decline again, draining liquidity from the system. Quantitative tightening may have been in operation for almost two years, and the Federal Reserve’s balance sheet falling since then, but reserves have spent most of the intervening period higher than they were since QT began.

This has undoubtedly given risk assets an easier time than if reserves had fallen at the same rate as the balance sheet. By issuing more bills, the Treasury enabled money market funds to fund most of the deficit using otherwise inert liquidity parked at the reverse repo facility. 

But MMFs are not able to directly buy longer-term debt (i.e. notes and bonds), and unless the buyers are banks (who have been largely reducing their exposure to USTs), bank deposits and therefore reserves will be used to facilitate the purchase. On net, some of these reserves will end up being depleted through QT – although at a slower pace from June as the Fed reduces the monthly cap on the run-off rate for USTs from $60 billion to $25 billion.

Reserves have fallen almost $250 billion since April. Almost $100 billion of that is due to a rise in RRP and the Treasury’s account at the Fed (the TGA). When neither of these two is falling, and the Fed proceeds with QT, reserves must fall.

This will be an increasing absence of a tailwind for risk assets which will eventually become a headwind. Regional banks are among those who may face a particular challenge from declining liquidity, making another bank failure a distinct possibility. It’s when those sort of choppy waters hit the Fed will probably see fit to curtail QT altogether.

Shares of Kohl’s Corp. crashed during the early morning cash session following a dismal earnings report. Or better yet, let’s call it what it is: a ‘Kohllapse’…

Kohl’s slashed guidance for the full year after reporting first-quarter results that missed about every metric.  

Comparable sales, which measure the performance of stores open for more than one year, dropped 4.4% in the quarter ended May 4 — the ninth consecutive decline. Analysts tracked by Bloomberg were expecting a 1.74% decline. 

Here’s a snapshot of the first quarter (courtesy of Bloomberg): 

• Comparable sales -4.4%, estimate -1.74% (Bloomberg Consensus)

• Adjusted loss per share 24c vs. EPS 13c y/y, estimate EPS 6.7c

• Gross margin 39.5% vs. 39% y/y, estimate 39.5%

• Net sales $3.18 billion, -5.3% y/y, estimate $3.34 billion

• Merchandise inventories $3.08 billion, -13% y/y, estimate $3.24 billion (2 estimates)

The midmarket department store chain also slashed its full-year forecast to $1.25 to $1.85 a share, well below the Bloomberg consensus estimate of $2.39 a share. 

Here’s a snapshot of the full-year forecast (courtesy of Bloomberg): 

• Sees adjusted EPS $1.25 to $1.85, saw $2.10 to $2.70, estimate $2.39

• Sees net sales -2% to -4%, saw -1% to +1%

• Sees operating margin 3% to 3.5%, saw 3.6% to 4.1%, estimate 3.89%

“Regular price sales increased year-over-year, with early success in underpenetrated categories, positive trends in our Women’s business, and continued strong growth in Sephora. However, lower clearance sales versus last year represented a more than 600 basis point drag on comparable sales,” CEO Tom Kingsbury wrote in a statement. 

Kingsbury continued, “We are approaching our financial outlook for the year more conservatively given the first quarter underperformance and the ongoing uncertainty in the consumer environment.” 

Here’s how Wall Street analysts responded to the earnings report:

Vital Knowledge

• “This very ugly KSS report/guide reflects how big box retailers without 1) a powerful consumables anchor and/or 2) aggressive pricing are being squeezed hard in the present environment,” analyst Adam Crisafulli writes

Citi (neutral)

• “Although gross margin and SG&A were both better than consensus, the issue with KSS has been (and continues to be) the top-line,” analyst Paul Lejuez writes

• The department store operator has several merchandising initiatives this year to help drive sales, including baby, gifting and impulse, but they “have yet to provide any sales boost,” he says

Bloomberg Intelligence

• Kohl’s “weak” 1Q results delays company turnaround, writes analyst Mary Ross Gilbert

• “Strong Sephora sales — up 60% in 1Q with comp sales up 20% — are masked by lower revenue in adjacent categories, postponing prospects to restore growth,” she says

If Kohl’s intraday plunge of 25% holds until close, it would mark the largest single-day crash in the company’s history.

Shares are crashing to Covid lows. 

Elsewhere, Foot Locker Inc. soared as much as 27%, the highest in years, after better-than-expected comparable sales provided insight into CEO Mary Dillon’s turnaround plan, which showed some signs of working. 

Still, Dillon warned about consumers: “There’s still pressure on the consumer for us—exposure to inflation, interest rates and reduced savings,” adding, “But it’s discretionary for a reason. They decide where to spend it.”

More headlines this AM from retailers (courtesy of Bloomberg): 

• Dollar General Inc., in the midst of turnaround efforts under two-time CEO Todd Vasos, said Thursday that gains in traffic and market share drove sales growth, though shoppers are spending less per transaction on average. Consumable products are growing, but more discretionary items such as apparel, seasonal and home products are declining.

• Best Buy Co., the last big US electronics chain, is all about discretionary items — and comparable sales slumped 6.1% in its most recent quarter, missing estimates. Still, the company outperformed on profit thanks to membership and service offerings.

• Discount chain Burlington Stores Inc. surged as much as 16% in premarket trading after reporting comparable sales and earnings that topped estimates. The company also raised its full-year guidance. “The quarter got off to a slow start in February, likely due to disruptive weather and delayed tax refunds, but then our sales trend picked up,” CEO Michael O’Sullivan said in a statement.

The overall theme about the working poor, recently laid out by Goldman analysts, has been an ominous one:

• Goldman Warns Consumers Are Cracking As Stagflation Threats Emerge
• Goldman’s Commentary On Consumer Health Is An Ominous One
• Wall Street Is Suddenly Freaking Out About “Low-Income Consumers”

This week’s news from retailers continues to reinforce Goldman’s theme about deteriorating working poor consumers. 

Authored by Matt Lamb via The College Fix,

Pro-Palestinian green tent cities are more likely to pop up at elite colleges with students from high-income families, new research suggests.

Washington Monthly recently published an analysis that looked at pro-Palestinian protests, including encampments, and found they were clustered among institutions with a lower percentage of Pell grant recipients. Those grants go to poorer college students, so they serve as a good proxy of the overall income of enrollees.

“Pro-Palestinian protests have been rare at colleges with high percentages of Pell students,” the article reported.

“Encampments at such colleges have been rarer still. A few outliers exist, such as Cal State Los Angeles, the City College of New York, and Rutgers University–Newark.”

The authors, Marc Novicoff and University of Tennessee Professor Robert Kelchen, said in a “vast majority of cases,” campuses with poorer students “have not had any protest activity.”

They offered several reasons why this might be.

“They may have off-campus jobs and nearby family members to see and take care of,” the researchers wrote.

The students might be sympathetic to the cause, but not place a high priority on it.

The authors wrote:

They might sympathize with the protesters—a nationwide poll of college students in May found that 45 percent support the encampments, 24 percent oppose them, and 30 percent are neutral. But in the same poll, only 13 percent rated conflict in the Middle East as the issue most important to them. That was well behind health care reform (40 percent), educational funding and access (38 percent), and economic fairness and opportunity (37 percent).

This might lead students working “a low-paying job” to be “unlikely to devote what little free time they have to protesting about an issue they don’t see as a high priority.”

Politically inclined students might be more drawn to colleges such as Columbia University, with a history of activism.

The article also looked at the political leaning of the student populations, using data from the Foundation for Individual Rights and Expression, and suggested less liberal campuses might be less friendly to pro-Palestinian activity.

“Whatever the cause, the pattern is clear: Pro-Palestinian protests are overwhelmingly an elite college phenomenon,” the article concluded.

Professor William Jacobson commented on the findings at his Legal Insurrection website.

“[The ‘elite college phenomenon’] doesn’t make the Red-Green Alliance among elites any less dangerous. Terrorist groups in the west traditionally have been drawn from the wealthy and the elites,” he wrote. “These may be dangerous people, but they are elite dangerous people. This is not a mass working class revolution.”

President Joe Biden and VP Kamala Harris were in Philadelphia, Pennsylvania on Wednesday, where they struggled to fill a college gymnasium with supporters for a the media called a “black voter outreach” event amid the Biden campaign’s struggle to keep black voters in his electoral coalition.

Photos from President Biden’s Philadelphia rally: the school’s gym is only about half full of supporters

A good amount of space is empty and spacious press workspace takes up the rest pic.twitter.com/et70d2lpCD

— Steven Nelson (@stevennelson10) May 29, 2024

The pair launched a new campaign effort, “Black Voters for Biden-Harris,” during a visit to Girard College – a boarding school primarily made up of black students. As part of the new drive, the campaign will partner with black organizations in an attempt to increase outreach among voters in key states, while also collaborating with groups on voter education and registration activation, both online and on the ground.

According to the Epoch Times, the campaign will also utilize partner organizations’ networks to “strengthen our voter protection efforts to safeguard the Black vote from continued MAGA attacks,” according to the press release.

The Biden-Harris campaign plans to hold multiple events in battleground states, including black church engagement in Arizona, new office openings throughout Georgia, and a community-led block party-style celebration in Nevada, campaign officials said.

Further organizing events will also take place throughout the weekend in Florida, Maine, Michigan, Nebraska, New Hampshire, Pennsylvania, Virginia, and Wisconsin.

As the Conservative Treehouse notes, the event was “one of the most divisive, toxic and bitter racist events in modern political history.”

The Biden campaign is relying on the formula they used in 2020, where James Clyburn, Barack Obama, the AME Church and Black Lives Matter organizers activated a regional playbook to influence the election.

In the big picture the Black Lives Matter (BLM) group are the ballot harvesters, the essential foot soldiers for the race-based electoral system Clyburn and Obama constructed. The AME network are the ballot counters, the precinct poll workers, spread throughout the various urban enclaves of Pennsylvania, Wisconsin, Georgia, Michigan, Arizona, Virgina and both Carolinas. It’s a race-based coalition, dependent on conformity to achieve the 2024 objective.

The extremely toxic remarks made by Joe Biden were intended to rally the racist sentiment amid the black voters in the key precincts within key states.  However, for 2024 the challenge is larger. Minorities are just like all Americans who are negatively impacted by Bidenomics, inflation, energy prices, the open border and illegal migration ¹intended to suppress wages.

Watch:

The event comes as Biden’s support continues to slip among black voters. More via the Epoch Times;

President Biden also used the opportunity to tout his successes during his time in office, including appointing the first black woman to the United States Supreme Court, Justice Ketanji Brown Jackson, and appointing more black women to the federal circuit courts than“every other president in American history combined.”

President Biden’s overall approval rating among black Americans has decreased from 87 percent in March 2021 to 55 percent in April 2023, according to Pew Research.

“That’s not hyperbole,” he continued. “Because you voted, Donald Trump is a defeated former president and with your vote in 2024, we’re going to make Donald Trump a loser again.”

Oh?

Authored by Sam Doorman via The Epoch Times,

The Supreme Court ruled unanimously that the National Rifle Association plausibly alleged that the administration of the state of New York violated the First Amendment by pressuring insurance companies to cut ties with the gun rights organization.

The case, NRA v. Vullo, emerged out of the aftermath of the Parkland shooting on Feb. 14, 2018.

“A government official can share her views freely and criticize particular beliefs, and she can do so forcefully in the hopes of persuading others to follow her lead,” Supreme Court Justice Sonia Sotomayor wrote in the majority opinion.

Justices Neil Gorsuch and Ketanji Brown Jackson filed concurring opinions.

“In doing so, she can rely on the merits and force of her ideas, the strength of her convictions, and her ability to inspire others. What she cannot do, however, is use the power of the State to punish or suppress disfavored expression,” Justice Sotomayor added.

The U.S. Court of Appeals for the Second Circuit had rejected the NRA’s First Amendment arguments and said that regardless, New York Department of Financial Services Superintendent Maria Vullo was entitled to qualified immunity.

David Cole, who argued for the NRA on March 18, maintained that New York state engaged in a type of coercive activity that violated the First Amendment.

“This was not about enforcing insurance law or mere government speech,” Mr. Cole said.

“It was a campaign by the state’s highest political officials to use their power to coerce a boycott of a political advocacy organization because they disagreed with its advocacy.”

The U.S. solicitor general’s office similarly argued that Ms. Vullo’s conduct, and former New York Gov. Andrew Cuomo’s communications, showed that the state was engaging in coercion prohibited under the First Amendment.

Neal Katyal, who argued for Ms.Vullo, said the state targeted the NRA based on illegal insurance products and therefore was justified in telling companies to cease its work with them.

Live pricing feeds for the S&P 500 and Dow Jones indices have last updated at 1041ET.

“Market data is such an important part of our day-to-day operations,” said Michael Beth, director of equity and derivatives trading at WallachBeth Capital LLC.

“It’s always difficult when we don’t see live updates.”

CNBC has confirmed with the CME that no index pricing for the Dow Jones and the S&P 500 is being generated at this point, but they are working on a fix, CNBC reports.

While the benchmark for US equities hasn’t moved, individual stocks have continued to trade.

The index feed disruption – oddly – coincided with the lows of the day as futures pushed higher right after…

Whatever it takes to keep the dream alive…

Boston’s 39-year-old Mayor, Michelle Wu, wants to follow in the footsteps of San Francisco, Philadelphia, Seattle, Denver, New York, and other liberal strongholds – where property crimes, including grand larceny and motor vehicle theft, have seen a sharp increase in recent years.

As the Daily Mail reports, Wu wants to make crimes including shoplifting and disorderly conduct off-limits to prosecution. She also wants to include certain categories of breaking and entering, wanton and malicious property destruction, larceny under $250, and trespassing as non-prosecutable crimes. She did toss in drug possession – which is fine as long as crimes like disorderly conduct and disturbing the peace are enforced.

Those who commit such wanton crimes would receive little more than a slap on the wrist.

The offenses are all on a ‘do-not-prosecute’ list that was created by former Suffolk County District Attorney Rachael Rollins.

Rollins, who later joined the Biden administration but resigned amid ethical violations, had advocated for the non-prosecution of more ‘low-level’ offenses. 

During her 2021 campaign, Wu was asked by left-wing nonprofit Progressive Massachusetts whether she supports Rollins’ list, to which she responded “Yes.” When asked if she supported closing the Boston Police gang database, she also said yes. She also supports firing any Boston PD employees involved in the January 6th protest in Washington DC.

The Police gang database notably played a critical role in the federal bust of 40 individuals allegedly connected to a violent street gang which had operated for years out of a Boston housing project.

Wu, the city’s first female and Asian American Mayor, has promised to reallocate police funds to other city priorities, and believes in ‘demilitarizing’ law enforcement by eliminating the use of tear gas, rubber bullets and police dogs. Further, Wu wants police records on use-of-force to be made public, which critics say could endanger officers’ safety.

So, embolden criminals and de-fang cops. Right.

Boston about to get San Franciscoed https://t.co/bp5fcP9B0w

— zerohedge (@zerohedge) May 29, 2024

Libs’ Big Ideas:

“1. Let’s treat criminals as law-abiding citizens.”

“2. Let’s treat law-abiding citizens as criminals.” https://t.co/jInNfRKelS

— Mike Lee (@BasedMikeLee) May 29, 2024

By Michael Every of Rabobank

Pure Shakespeare

Stocks were down again as US yields and the dollar were up again. Not helping matters, the Fed’s Beige Book said, ‘mild stagflation’. Retail spending was flat to up slightly, but lower discretionary spending and heightened consumer price sensitivity; auto sales flat, with some incentives to spur sales; travel and tourism stronger, but with mixed outlooks; transportation mixed; manufacturing flat to up; housing up modestly; commercial real estate softer; energy stable; and agriculture mixed. The overall outlook was more pessimistic amid rising uncertainty and greater downside risks. Employment rose at a slight pace, with wage growth mostly moderate and several Districts reporting it at pre-pandemic historical averages or normalizing towards it. Prices increased at a modest pace as consumers pushed back, leading to smaller profit margins, and retail discounts were evident despite increases in input costs, particularly insurance, though with some falls in construction and raw materials costs. Price growth was expected to continue at a modest pace.

Elsewhere, things were more Shakespearean.

“Cry havoc, and let slip the dogs of war!” (Marc Anthony, Julius Caesar)

The Financial Times main headline is that ‘NATO has just 5% if air defences needed to protect eastern flank.’ No, NATO doesn’t have an eastern flank but an eastern FRONT: it faces east, so its vulnerable flanks are to the north and south. Regardless, it urgently needs to spend 20x more on air defence alone. Meanwhile, Poland is reinforcing its border with Belarus and Russia, as the former withdrew from the Conventional Armed Forces in Europe treaty, and the Baltics and Scandinavia plan a ‘drone wall’. Many EU countries will also now allow Ukraine to use their donated weapons to attack Russian forces inside Russia proper. Militarily, that’s the best strategy; geopolitically, it means the West escalating to deescalate – which Russia will only mirror. The UK Telegraph is running a series of articles starting today on the topic ‘What if Putin Wins?’ The first argues, “A Russian victory would unleash a cascade of events triggering irreversible changes, pushing the world to the brink of chaos.”

“The first thing we do, let’s kill all the lawyers.” (Dick the Butcher, Henry VI, Part 2)

We can also expect imminent market headlines from the Trump trial in New York, where the jury are still out. In every trial, there are always two opinions: the prosecution and the defense. In this trial there are three: anti-Trump, pro-Trump, and anti-Trump but concerned about the rule of law.

Alan Dershowitz, a Democrat, has been withering in his criticism of how this trial has been prosecuted. Legal expert Jonathan Turley notes it “has seemed otherworldly, a vaguely familiar proceeding where common elements of a trial seem to have been flipped,” listing the numerous ways normal practice has not been followed – which those pro-Trump naturally allege have occurred for nefarious political purposes. Given how the judge –‘The Merchan of Vengeance’– instructed the jury, experts think the most likely outcomes are a hung jury or a conviction.

If it’s the former, Trump will gain huge publicity, and cry he was wronged by Democrat ‘lawfare’; and if he’s convicted, that is arguably even more the case (even if the latter will prompt a rapid appeal, potentially all the way up to the Supreme Court, which many observers think will then see the verdict overturned). To presume, as White House strategists must do(?) that being able to call Trump a “convicted felon” on TV will necessarily dent his electoral prospects rather than boosting them may be to totally misread the current situation, as in 2016.

This matters for markets more than some reading the very Beige Book realize. Not only could this trial potentially increase the likelihood of Trump winning in 2024, which would already shift the US, the world, and world markets, but it might boost his odds of taking the Senate and the House too, ensuring that he could shift them all if he wants to. It might also convince him that he needs to (as the Wall Street Journal says Elon Musk might take an advisory role at the White House were Trump to win: what might that mean for US policy: Orange Cybertrucks? CyberTrump? Trumpcoin? Camp Trump on Mars?)

More broadly, it’s a further dent in the reputation of US law just as (contrived?) media controversy rages over a Supreme Court judge for flying a flag, again politicizing the highest echelons of the US justice system. Following previous controversial court cases involving Trump there, it doesn’t do New York many favors as an investment destination unless one’s business is in the anti-Trump camp. Yet that points to a polarization in the US mirroring past ones in emerging markets. Indeed, Dershowitz and Turley fear precisely the political rule BY law, not OF law if precedent is set: could future presidents find partisan judges and juries to rustle up court cases to take out potential opposition legally, as happens elsewhere? That still seems unlikely given the checks and balances in the US system, but for some this is all a worrying step in that direction. US businesses and markets players, even those anti-Trump, should be aware that those kinds of legal environments are partly why so much foreign capital ends up in the US in the first place.

Moreover, when The Economist is worrying about the collapse of global liberal institutions, and the International Criminal Court and the International Court of Justice have mired themselves in controversy, splitting the West internally and vs. the Global South in a new Cold War –as Mexico joins South Africa’s case vs. Israel at the ICJ, The Australian says “The ICC issuing warrants for the arrest of Netanyahu and his defence minister is grandstanding by this toothless, bloated court”– the last thing the West needs is for its rule of law to be brought into ill-repute. ‘Let’s kill all the lawyers’ is how you destabilise things in Shakespeare’s eyes: but so is letting all the lawyers kill us.

On that note, many other Henry VI, Part 2 quotes spring to mind, and should spring to yours:

“My troublous dreams this night doth make me sad.“ Duke of Gloucester (Act 1, Scene 2)

“How irksome is this music to my heart! When such strings jar, what hope of harmony?” King Henry VI (Act 2, Scene 1)

“The commons, like an angry hive of bees. That want their leader, scatter up and down. And care not who they sting in his revenge.” Warwick (Act 3, Scene 2)

Crude prices have given back the brief gains overnight (following API’s report of a big crude draw) as US GDP slowed and weighed on demand expectations (offsetting nervousness from another attack on a ship in the Red Sea, and Israeli comments that it probably wouldn’t be able to defeat Hamas before the end of this year).

Additionally, traders are anxiously awaiting the OPEC+ meeting over the weekend for more clarity on the supply-demand outlook.

“There’s some caution in the market, with attention on slowing consumption just before the high-demand summer season,” said Will Sungchil Yun, a senior commodities analyst at SI Securities Corp.

“But a surprise from OPEC+ can’t be completely ruled out and that could drive prices immediately higher.”

The official inventory data will trigger the next leg if it confirms API’s print.

API

• Crude -6.49mm (-1.9mm exp)

• Cushing -1.71mm

• Gasoline -452k

• Distillates +2.05mm

DOE

• Crude -4.16mm (-1.9mm exp)

• Cushing -1.76mm

• Gasoline +2.02mm

• Distillates +2.54mm

Crude inventories and stocks at the Cushing Hub tumbled last week, confirming API’s overnight report. Inventories built though on the product side…

Source: Bloomberg

The Biden admin added 485k barrels to the SPR (while drawing down from the gasoline reserve)…

Source: Bloomberg

US Crude production remained flat near record highs…

Source: Bloomberg

WTI was hovering around $79 ahead of the official data having fallen this morning after the GDP print. WTI extended losses after the official print…

Finally, Bloomberg notes that the prompt timespread for Brent crude is getting closer again to a bearish contango structure that indicates supply is abundant when compared with demand.