Archive for December, 2010

Happy New Year!

Happy New Year! Best wishes for 2010!

U.S. Petroleum Weekly – December 31, 2010

Crude oil stocks fell 1.3 million barrels; Gasoline stocks decreased 2.3 million barrels; Distillate stocks rose 0.2 million barrels; Propane/propylene stocks were down 2.5 million barrels; Other oils stocks decreased 2.2 million barrels; Total crude oil and petroleum stocks were 9.2 million barrels lower for the week.

Refinery utilization rose 0.1% to 87.8%.

Implied crude oil demand fell 0.5 million barrels.

Crude oil and petroleum product net imports fell0.2 million barrels to 9.2 million barrels.

Refiners reduced crude oil stocks because use of LIFO accounting enables them to keep lower priced inventory on hand; expense higher priced one and consequently pay lower taxes. Demand also recovered a bit.

Going into new year crude oil stocks will probably rise on refiner restocking.

U.S. Natural Gas Weekly – December 30, 2010

Working gas in storage fell 136 Bcf from previous week. The consensus was at 143 Bcf.

Storage level 44 Bcf lower than same time year ago. In short a replay of last’s year oversupply.

Pending Home Sales Index Rose 3.5% In November

Pending home sales index rose 3.5% In November vs. revised rise of 10.1% in October. On year level, the index is down 4.9%.

Generally rising pending home sales are positive for the economy, but currently and until excess unsold housing inventory is cleared rising pending home sales index mean more foreclosed homes are being sold at depressed prices which is a sign of additional pressure on home prices.

Chicago Purchasing Managers Index For December At 68.6

Chicago Purchasing Managers Index was reported at 68.6. The consensus was at 61.0, prior reading at 62.5.

Regional manufacturing surveys signal significant improvement in industrial production in December.

U.S. Initial Jobless Claims At 388.000; Down 33.000

Initial jobless claims in the U.S. were reported right at 388.000 vs. 415.000 consensus; last week revised (up 2.000) reading was at 422.000.

First reading bellow 400.000 since July 2008; The part of the reduction probably comes from seasonal effects (it is hard to seasonally adjust the data accurately on holiday weeks), so we have to wait for a confirmation of a positive trend after holidays pass.

China HSBC/Markit PMI For December At 54.4

HSBC/Markit China PMI fell from 55.3 to 54.4.

Hindenburg Omen Spotted On December 14, 2010

It has to be confirmed till January 20th, 2010 to be regarded as a sell signal.

Morning Reading – December 28, 2010

*** The Big Picture: Retail Sales Increase Most in 5 years ***

*** The Big Picture: Chinese stocks lower again ***

*** Calculated Risk: Dallas Fed: Manufacturing Activity Continues to Grow ***

*** Calculated Risk: Freddie Mac: 90+ Day Delinquency Rate increases in November ***

Conference Board Consumer Confidence For December At 52.5

Conference Board consumer confidence came out at 52.5 vs. 56.3 consensus and 54.3 revised reading for November.

S&P/Case-Shiller Home Price Indexes Fell In October

Seasonly adjusted S&P/Case-Shiller HPI 10 city composite fell 0.9% In October; On year level 10 city index is up 0.2%.

Rig Count Weekly – December 27, 2010

Number of crude oil drilling rigs fell for 15; Number of natural gas drilling rigs fell for 10.

Morning Reading – December 27, 2010

*** FT BeyondBRICS: China: the long-awaited Xmas gift ***
*** FT BeyondBRICS: Asia markets wrap: Shanghai at 2-month low after rate rise ***
*** The Big Picture: The Only Constant Is Change (1881-2010) ***
*** The Big Picture: Job Offers Rising ***
*** The Big Picture: Going Bankrupt: 100 Bailed Out Banks ***
*** The Big Picture: Lessons from the Muni Bond Market in 2010 ***
*** Reuters: New claims may add to Nakheel’s legal woes: sources ***
*** The Slope of Hope: Some Musings ***
*** The Slope of Hope: My Morning’s Inbox ***

Dry Bulk Weekly – December 27, 2010

Baltic dry index fell 11.3% last week; Capesize Index was down 13.8%; Panamax Index fell 9.4%; Supramax Index was down 7.4%; Handysize Index fell 1.2%.

I’m getting a little bit worried but to repeat last week’s comment: Iron stockpiles & steel inventory mostly unchanged; Iron ore and steel prices stable. No indication of any major disruptions in Chinese economy. Low rates are probably byproduct of excess supply of ships and seasonal factors (weaker construction steel demand in China during winter months).

Chinese Central Bank Raised Benchmark Interest Rate

POBC raised key one-year lending rate for 0.25% to 5.81%. This was widely expected; I have wrote on this earlier and almost certain there is more of this to come.

Raising interest rates and stalling real-estate prices are a bad cocktail. I will cover China even more extensively next year, as big things could come from here.


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