• 3 minutes Looming European Gas Crisis in Winter and North African Factor - a must read by Cyril Widdershoven
  • 7 minutes "Biden Targets Another US Pipeline For Shutdown After 'Begging' Saudis For More Oil" - Zero Hedge Monday Nov 8th
  • 12 minutes "UN-Backed Banker Alliance Announces “Green” Plan to Transform the Global Financial System" by Whitney Webb
  • 6 mins GREEN NEW DEAL = BLIZZARD OF LIES
  • 2 days China's aggression is changing the nature of sovereignty.
  • 3 days Building A $2 Billion Subsea Solar Power Cable From Chile To China
  • 1 day Ukrainian Maidan after 8 years
  • 2 days OPEC+ Expects Large Oil Glut In Early 2022
  • 2 days Delta variant in European Union
  • 2 days Hunter Biden Helped China Gain Control of Cobalt Mines in Africa
  • 4 hours Communist China Declared War on the US Long Ago Part 1 of the 2-part series: The CCP's War on America
  • 2 days Forecasts for Natural Gas
  • 2 days Microbes can provide sustainable hydrocarbons for the petrochemical industry
  • 8 hours Сryptocurrency predictions
  • 2 days NordStream2
  • 2 days CO2 Electrolysis to CO (Carbon Monoxide) and then to Graphite
  • 2 days President Biden’s Nuclear Option Against OPEC+ - Waste of Time
  • 3 days Big Bounce: Russian gas amid market tightness - new report by Oxford Institute for Energy Studies
Matt Smith

Matt Smith

Taking a voyage across the world of energy with ClipperData’s Director of Commodity Research. Follow on Twitter @ClipperData, @mattvsmith01

More Info

Premium Content

Commodity Markets In Distress As Oil Rout Continues

One hundred and eleven years after the birth of Count Basie, and the ongoing rout in the crude complex is in full swing today. Downhill one-way traffic continues amid headlines such as ‘No End in Sight for Oil Glut‘ and ‘Oil Poised for Longest Weekly Losing Streak Since 1986 Amid Glut‘. As the headlines get more apocalyptic, and the price projections get lower (this week: $15 oil, no, $10 oil), the more it feels like we are approaching a turning point. Or at least a whipsaw.

Looking at the overnight data releases, China has served to endorse the current mood of doom and gloom via a preliminary manufacturing print of prodigiously downbeat proportions. A print of 47.1 was seen, which was considerably lower than last month’s 47.8, and shy of the consensus of 47.7. It is the lowest print since March 2009 (hark, the belly of the great recession). Related: Hungry Venezuela Eyes $40 Billion Offshore Discovery In Guyana

China Caixin Preliminary PMI (source: investing.com)

In other preliminary releases, Eurozone manufacturing on the aggregate came in above consensus (and in line with last month’s level), aided by a decent number from Germany, but held in check by a miss from France (showing increasing contraction to boot). Eurozone services data on the aggregate also beat consensus, ticking higher on the prior month. Related: Supply, Demand Equilibrium Further Away Than Ever Before

Weakness across the commodity complex as a whole continues to be an ongoing theme in global markets. The below chart illustrates the losses seen in the stock prices of various oil and mining companies, with Bloomberg estimating that $2.05 trillion has been wiped off their market caps. Meanwhile, the Bloomberg Commodity Index of 22 raw materials has dropped to its lowest level since 2002.

While US refiners continue to make hay while the sun shines amid super-strong crack spreads, US producers are feeling increasing pain as oil prices continue to drop. US oil and gas companies raised $44 billion in debt in the first half of this year, the most since 2007, in an effort to maintain liquidity amid the oil price drop. As prices retest 6-year lows, producers once again see their financial situations heading south. Related: Oil Prices Must Rebound. Here’s Why

On the whole, 62 US oil and gas companies own $235 billion of debt, and at least 10% of that is at a distressed level. JPM Morgan has set aside $140 million for potential write-downs in the coming months, with other banks doing the same. All is looking rather ominous. While oil producers get pummeled, miners get mauled:

By Matt Smith

More Top Reads From Oilprice.com:


Download The Free Oilprice App Today

Back to homepage





Leave a comment

Leave a comment




EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News