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Showing posts from January 24, 2021

WallStreetBets vs Hedge Funds: when will this game end?

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  The stage is set for an epic show; the battle lines are drawn. People across the world, some of who have never been bothered about stock markets or investors for that matter, are watching the duel between the hedge funds and the WallStreetBets, the Reddit group that grabs headlines this week, for variety of reasons. In the profile picture of the WallStreeBets, a gentleman resembling President Trump, is making coded gestures, perhaps in the form of a rallying cry, while remaining in chartered waters on a yacht, anchored between two tropical isles. As far as the motive of the group is concerned, it has done the trick. That’s why we all talk about it and fear it will jostle the markets. In direct proportion to the soundbites, the public interest is growing exponentially and there are clear signs that the development may take roots beyond the GameStop with far reaching consequences. The news about 1000% surge in value of the stock price of little-known oil trading company is a ca

Oil price: why did falling US crude oil inventories fail to do the trick this time?

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  The substantial fall of US crude oil stockpiles has not excited the oil price yet, buckling the familiar trend. The positive news has been overshadowed by a myriad of factors, according to seasoned market watchers. Some of the key reasons are as follows: ·        The Federal Reserve makes it known the inevitability of its continuing support to revive the battered economy ·        The outbreak of Covid-19 clusters again in China in the middle of winter ·        The reluctance of the Chinese to travel and engage in shopping with the arrival of the Chinese New Year ·        Intense lockdowns in the US and China ·        The logistical problems faced by Vaccine producers ·        The lingering doubts about the efficacy of existing vaccines against new variants of Covid-19 ·        The advice against unnecessary travels within or outside the borders by European countries ·        Less traffic on the road with air travels at a bare minimum, mainly for vital cargo transp

US oil inventories: a significant draw may push the price again

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The oil price that has been fluctuating in the past week, got the much needed boost for stability with the latest crude oil draw; the US crude oil inventories have gone down by 9.9 million barrels to the week ending, January 22. The latest data released by the EIA, the US Energy Information Administration, gives the investors the confidence to carry on investing in the sector, as there are plenty of uncertainties hovering over the progress. The US crude oil inventory draw has been a reliable indicator when it comes to gauging the movement of the oil price; although, there was no immediate positive trend of the oil price after hearing the news, market will react positively in the next few days – in line with the existing pattern. Although, the expectation was for a revival of the oil supply into the markets from the key players like Iran, Libya and Iraq, there are no sign of it happening in the near future. Israel, on Tuesday, dashed hope of Iran coming back from the cold; Libya

Flow of Iranian crude oil into markets: will Israel turn the tap off?

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  As Iran preparing itself for making its presence in the crude oil market again, without being hampered by a myriad of sanctions, Israel dashed the hopes of the former by implying that would not be that easy. Lt. Gen. Aviv Kohavi, the chief of Israeli defence force, did not mince his words, when he outlined his plans: he said he ordered the defence forces to make preparations for offensive action against Iran next year; he did not want the Biden administration to revive the 2015 nuclear deal, even with new tough conditions attached to it. Since Israel is a democracy, being the only country in the region, General Kohavi, stressed that his job is to put the plan on the table and it is up to politicians to make a decision. Of course, the general would not have gone public without the consent of the political masters in Israel that he was referring to. Once he made the statement public, Iran reacted by saying it was a ‘ploy’. Iran, however, showed some concerns, if you read between

Covid-19 in the UK: are we about to see the light at the end of the tunnel?

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  The infection rate of Covid-19 seems to be on decline and the trend has been consistent for the past few days in the United Kingdom so that the inhabitants can breathe a collective sigh of relief. As of yesterday, the 7-day-average of infections and the 7-day-aveage of the deaths are 35929 and 1239 respectively. There is no doubt that the strict lockdown measures and masking up the population are working, although a significant opposition exists against the moves. It is too early to gauge the effect of the accelerated vaccine programme in bringing down the dreadful numbers, though. The decline in rate of infection is bigger than that of deaths; most of the deaths have occurred in care homes which house the elderly – the most vulnerable group in the pandemic. The British government hopes the lockdown may be eased before the Easter in proportion to the indicators of success of controlling the outbreak. There is noticeably less traffic on the roads and I hardly notice airpla

Oil price stabilized: Iraq and Libya join in production cuts

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  The rare unity of Arab nations with Saudi Arabia at its nucleus appears to be helping the latter in its determination to cut the crude oil output to compensate for the loss of revenues during the past few months. Both Iraq and Libya confirmed that they will cut down the output for January and February, mimicking what Saudis did: not only did Saudi Arabia cut the oil output by 1 million barrels per day, but also raised the crude oil price for Asia, something that didn’t go down very well with the key players in the region. For example, the Indian petroleum minister took a swipe at Saudi Arabia saying he didn’t understand the logic behind such a move; during the height of the pandemic, however, Saudis reduced the price of crude oil for the region, to help them out, when their respective economies were suffering. Since India buys most of its oil from Iraq, the latest move by Iraq with the blessings of the Saudis, may not go down well with New Delhi, as the Indian economy has suffe

Covid-19: can both cause and solution lie in the same phenomenon?

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  This is just a random thought, folks! The emergence of the Covid-19 out of the blue still baffles the scientific community with no firm evidence to locate the exact origin even after a period of one year, let alone a solution. Only after the rest of the world came to know that it was a pandemic, did the WHO, the World Health Organization, make up their collective mind to declare it was a pandemic, after all. They were not in favour of masking up the whole populations either at the early stages of the pandemic; but later chose to go with the flow. The organization may have learned its lessons, when the way it handled came under severe scrutiny while heading to a point of funding being slashed by the Western countries, led by the United States under President Trump. It is unfortunate that the medical experts in the organization have to tread carefully on a political minefield in order to get to the truth – and the real origin of the pandemic. The ordinary folks, meanwhile,

Infection and death rates in the UK are down - finally

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  Coronavirus infection rate in the United Kingdom seems to be subsiding finally, having registered the highest death toll since the beginning of the pandemic last year. The fall in the figures, however, has not given the authorities any meaningful cause for optimism, as they have been there before; if the public flout the lockdown rules, as happened in the last summer, things can get worse again, as it happened after the Christmas. In short, the pandemic can only be kept at bay with the public complying with the measures introduced by the authorities. Despite the encouraging statistics, the government is not prepared to take any more risks: the opening of schools may not happen in February after all; even summer holidays are in jeopardy now; even on the vaccine front, there are logistical issues to deal with. The other lingering worry is the emergence of new variants and the way they will respond to the existing vaccines. There is no tangible sign of air travel coming back t

Sharp oil production cuts: will the OPEC kill the golden goose?

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  If you showed an arc to a good mathematician, said Emerson in one of his famous essays, the former would complete the circle.  This is exactly what we saw in the oil markets this week: smart investors looked at the dots in the charts that really matter and completed the picture on their minds that most analysts, traders and investors do not see. In short, they exercised caution in exact response to what they see, as going with the flow was never in their character. As a consequence, oil price that showed a remarkable recovery during the second phase of the pandemic lost its momentum this week, much to analysts’ surprise. On one hand, the measures taken by the Western governments to keep the pandemic at bay do not seem to be doing the trick; the leaders, having listened to endless experts, are really in a quandary without knowing how to move forward; the progress made on the vaccine front so far is doing very little to shore up the loss of enthusiasm in it by the public, somet

Crude Oil: latest news