Monday, October 28, 2013

7 Quick Links for Monday

I have a hell of a busy week ahead of me. I hope yours looks less stressful. Here's a sample of what I'm reading this morning ...


“In our view, for as long as financial markets postpone the (anticipated) date at which the Fed starts to tapers its program of QE (quantitative easing), we expect precious metal returns will be well supported,” Deutsche Bank says

Reserves in Russia declined about 0.37 metric ton to 1,015.1 tons, data on the IMF’s website showed. Kazakhstan’s holdings expanded 2.52 tons to 137.04 tons, the data showed. Expectations that tapering would start spurred losses in emerging-market stocks and some currencies in August.

XX Sean's note -- but now, tapering seems off the table.


Stymied by the cost of drilling and complexity of tapping shale gas, China has struggled in its bid to revolutionize its energy supplies and unlock what may be the world's largest shale gas reserves.

Sinopec targets an annual production capacity to be built at the field of 5 billion cubic meters (bcm) by the end of 2015, the source said. That would dwarf company estimates reported by local media in July of around 2 bcm for the whole of Sinopec's shale output by 2015, and would be 100 times greater than China's estimated output last year of just over 50 million cubic meters from all test drilling at shale formations. 

XX Emphasis on "may" and "could". We'll see.

Energy producers on average need oil prices around $96 a barrel to break even on wells drilled in Permian layers known as the Cline Shale and the Northern Mississippian Lime, according to Mike Kelly, an analyst at Global Hunter Securities LLC. That compares to average break-even prices of around $78 a barrel in the Eagle Ford Shale a few hundred miles east of the Permian, and $84 in the Bakken of North Dakota. Some areas of the Permian need a price of just $70-$74, Kelly said.

XX The best cure for low prices is low prices


XX Not much to add. He may be right.

Premier Li Keqiang has pledged to cut the state’s role in the economy, change the financial and fiscal systems, and overhaul land and household registration rules to sustain growth. 

XX Why are the Chinese raising expectations like this?

The 29 members of the conference committee won't do anything other than preen for the cameras. This first meeting will take place roughly 6 weeks before December 13. When is the last time Congress has done anything substantive on the budget that far in advance of a deadline?

XX Probably true

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