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Fri, 26th May 2017

Anirudh Sethi Report

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Archives of “united states” Tag

Today’s Stunted Oil Prices Could Cause Oil Price Shock In 2020

As oil prices remain unsteady and OPEC continues to make headlines every hour, the world is focused on oil’s immediate future. As Saudi Arabia announces plans to slash production and move their economy away from oil dependency, many industry insiders are predicting that the now over-saturated market will reach an equilibrium with higher commodity prices by 2018 and U.S. shale production will continue to grow along with global demand.

Robert Johnston, the CEO of one of the world’s biggest political risk consultancies, is unconvinced. In a speech made at the Association of International Petroleum Negotiators’ 2017 International Petroleum Summit, Johnston laid out his concerns for the future of oil.

Despite the recent dip in oil prices, industry experts have been predicting a supply-gap and rising oil prices for years. This is due in large part to an oil investment drought marked by two year of consecutive decline, a statistic that has no precedent in the oil industry. This year a report by the International Energy Agency concluded that if oil investment remains stagnant over the next few years, by 2020 we will see a significant increase in the price of oil as global demand continues to climb.

The IEA’s Executive Director Fatih Birol addressed these findings in a keynote address at the Atlantic Council Global Energy Forum in Abu Dhabi in January, announcing that no major oil projects were started in the last year and there were zero large oil discoveries “because there is no money for exploration. You find something if you look for it,” Birol said.

The potential supply gap has far-reaching implications that we are not ready to combat. Gas and oil are still fundamental to much of the world’s infrastructure, despite a steady increase of research and utilization of renewable energy resources. While electric cars continue to show a promising future, especially in the light of ambitious new green car policy initiatives in India and China, they still account for less than 2 percent of the world’s cars. And, as the global middle class continues to grow and exercise their buying power, the demand for oil will continue to grow alongside them.

The oil industry desperately needs new sources of oil, and they need new investors and technologies to find those sources quickly. There are currently a wide variety of techniques employed to find new deposits (seismic prospecting, well logging, gravity surveying, magnetic prospecting, and geochemical prospecting, etc.) but these are all methods with significant limitations in their ability to accurately estimate the size of new oil and gas deposits.

Many companies, including oil giant BP, have begun efforts to develop of artificial intelligence programs with algorithms that will allow them to find and drill with unprecedented accuracy in the future, but the technology is not yet ready. We can only hope that it will be ready by 2020 or that the IEA is wrong in their predictions. 

Donald Trump’s Saudi Speech: Full Transcript

I want to thank King Salman for his extraordinary words, and the magnificent Kingdom of Saudi Arabia for hosting today’s summit. I am honored to be received by such gracious hosts. I have always heard about the splendor of your country and the kindness of your citizens, but words do not do justice to the grandeur of this remarkable place and the incredible hospitality you have shown us from the moment we arrived.

You also hosted me in the treasured home of King Abdulaziz, the founder of the Kingdom who united your great people. Working alongside another beloved leader—American President Franklin Roosevelt—King Abdulaziz began the enduring partnership between our two countries. King Salman: your father would be so proud to see that you are continuing his legacy—and just as he opened the first chapter in our partnership, today we begin a new chapter that will bring lasting benefits to our citizens.

Let me now also extend my deep and heartfelt gratitude to each and every one of the distinguished heads of state who made this journey here today. You greatly honor us with your presence, and I send the warmest regards from my country to yours. I know that our time together will bring many blessings to both your people and mine.

I stand before you as a representative of the American People, to deliver a message of friendship and hope. That is why I chose to make my first foreign visit a trip to the heart of the Muslim world, to the nation that serves as custodian of the two holiest sites in the Islamic Faith.

World Money: Five Hidden Signals From The IMF

Less than a month ago a handful of the world’s policy makers gathered in Washington at the International Monetary Fund (IMF), no surprising headlines were run – but an obscure meeting and a discreet report launched exclusive signals for the next global economic crisis.

The panel, which included five of the most elite global bankers, was held during the IMF’s spring meetings to discuss the special drawing rights (SDR) 50th anniversary.  On the surface the panel was a snoozefest, but reading beyond the jargon offers critical takeaways.

The discussion revealed what global central banks are planning for a future crisis and how the IMF is orchestrating policy for financial bubbles, currency shocks and institutional failures.

Why the urgency from the financial elites?

In his opening remarks Obstfeld identified, “There has been increasing debate over the role of the SDR since the global financial crisis. We in the Fund have been looking more intensively at the issue over whether an enhanced role for the SDR could improve the functioning of the international monetary system.”

“The official SDR is something we are familiar with but is there a role for the SDR in the market or a market SDR? What is the SDR’s role for the unit of account?”

Here’s the five most important signals from the world money panel, what they could mean for the international monetary system and the future of the dollar.

1. China Spars for the SDR Market

Nasdaq’s “Big 5” Stocks Near $3 Trillion Market Cap

Since President Trump was elected – much to the heart-crushing chagrin of the billionaire class in Silicon Valley and its epic funding of Hillary – the big 5 stocks of the Nasdaq (Alphabet, Amazon, Apple, Facebook, and Microsoft) have gained a stunning $675 billion in market cap.

This pushes them near $3 trillion and well over 10% of the entire US equity market…

For context, Bloomberg notes that is more than the total value of stocks in any single equity market worldwide except the five largest: the U.S., China, Japan, Hong Kong and the U.K.

Half Of Canadians Have $200 Or Less In Savings

Two months ago, when quoting the CEO of cell phone insurer Assurant, who appeared on Bloomberg TV to discuss business trends, one of his quotes caught our attention: “the reality is, half of Americans can’t afford to write a $500 check,” Colberg said. We decided to look into the CEO’s claim about the woeful state of US finances. What we found is that according to a recent Bankrate survey of 1,000 adults, 57% of Americans don’t have enough cash to cover a mere $500 unexpected expense. Turns out the CEO was right. And while that may appear dire, it is a slight improvement from 2016, when 63% of U.S. residents said they wouldn’t be able to handle such an expense.

The Bankrate survey findings echoed research published last year by the Federal Reserve, which found that 46% of respondents said they would be challenged to come up with even less, or $400, to cover an emergency expense, and would likely borrow or sell something to afford it. When the Fed asked what types of emergency expenses Americans had actually faced in the last year, more than one out of five cited a major unexpected medical expense. The average expense: $2,782, or almost seven times higher than the Fed’s hypothetical $400 surprise bill.

How does this stunning statistic compare to some other developed nations?

It turns out that the state of half of US finances, deplorable as it may be is positively shining, not to mention “twice as good”, when compared to the country’s neighbor to the north, where a recent Ipsos survey on behalf of accounting firm MNP, found that more than half of Canadians are living within $200 per month of not being able to pay all their bills or meet their debt obligations. Needless to say, if $500 in savings is bad, half that amount is outright bizarre.

Macron, Le Pen: What to Expect From French Presidential Election

A woman walks near election campaign posters for French centrist presidential candidate Emmanuel Macron, left, and far-right candidate Marine Le Pen, in Saint Jean Pied de Port, southwestern France, Friday May 5, 2017

Marine Le Pen has repeatedly underscored her desire to mend fences with Russia so that Europe has a peaceful future ahead. She lashed out at the Western sanctions against Russia as “stupid” and recognizes Crimea as part of the Russian Federation.

She believes that France should maintain equally good relations with both the US and Russia, that it has no reasons for waging a cold war with Moscow and needs closer diplomatic, trade and strategic relations with Russia, which she calls “a great country.”

Emmanuel Macron also wants to rebuild relations with Russia and engage into intense and frank dialogue, even though Paris’ vision does not totally correspond with that of Moscow.

Unions and alliances

France’s possible exit from the European Union was the centerpiece of Le Pen’s agenda ahead of the first round vote in April. She has since softened her anti-EU rhetoric a bit and now says she wants to supplant the EU with a “European alliance of free and sovereign states.”

Marine Le Pen said her first order of business on setting foot in the Elysee Palace will be to propose negotiations to radically overhaul what she described as “a totalitarian union,” and announce referendums on EU membership and on withdrawing from the European Union.

Duterte Warns Trump: “That Guy Kim Simply Wants To End The World”

In a rare comment on the deteriorating North Korean situation, outspoken Philippine president Rodrigo Duterte urged the US to show restraint after North Korea’s latest missile test and to avoid playing into the hands of leader Kim Jong Un, who “wants to end the world“. The notoriously blunt Duterte said on Saturday that the Southeast Asia region was extremely worried about tensions between the United States and North Korea, and said one misstep would be a “catastrophe” and Asia would be the first victim of a nuclear war.

“There seems to be two countries playing with their toys and those toys are not really to entertain,” the president said quoted by Reuters during a news conference after the ASEAN summit in Manila, referring to Washington and Pyongyang. “One miscalculation of a missile, whether or not a nuclear warhead or an ordinary bomb, one explosion there that would hit somebody would cause a catastrophe.”

Duterte also warned the United States, Japan, South Korea and China that they are sparring with a man who was excited about the prospect of firing missiles. Duterte’s speech, which was delivered in his capacity as chairman of ASEAN, was due to speak by telephone to U.S. President Donald Trump later on Saturday. He said he would urge Trump not to get into a confrontation with Kim.

“You know that they are playing with somebody who relishes letting go of missiles and everything. I would not want to go into his (Kim’s) mind because I really do not know what’s inside but he’s putting mother earth, the planet to an edge.

North Korea Warns China Of “Catastrophic Consequences” For Siding With U.S.

Having repeatedly threatened the annihilation of its neightbor to the south, and most recently warning of a “super-mighty preemptive strike” against the US, one day after it emerged that Pyongyang appeared to have resumed activity at its Punggye-ri Nuclear test site, North Korea asked China not to step up anti-North sanctions, warning of “catastrophic consequences” in their bilateral relations.

Pyongyang issued the warning through commentary written by a person named Jong Phil on its official Korean Central News Agency (KCNA), which was released Saturday.

As South Korea’s Yonhap news agency writes, it’s rare for Pyongyang’s media to level criticism at Beijing, though the KCNA didn’t directly mention China in the commentary titled “Are you good at dancing to the tune of others” and dated Friday. The commentary instead called the nation at issue “a country around the DPRK,” using North Korea’s official name, the Democratic People’s Republic of Korea.

“Not a single word about the U.S. act of pushing the situation on the Korean peninsula to the brink of a war after introducing hugest-ever strategic assets into the waters off the Korean peninsula is made but such rhetoric as ‘necessary step’ and ‘reaction at decisive level’ is openly heard from a country around the DPRK to intimidate it over its measures for self-defense,” the commentary’s introduction in English read.

‘Repeal or Replace’: Israeli PM Claims Iran Deal Allows Tehran to Develop Nukes

Benjamin Netanyahu, Prime Minister of Israel, uses a diagram of a bomb to describe Iran's nuclear program while delivering his address to the 67th United Nations General Assembly meeting September 27, 2012 at the United Nations in New York.The prime minister added the Iranian deal should be reviewed or revoked.

“There’s no question that the deal with Iran, which paves the way to eventual Iranian acquisition of the critical elements of nuclear bombs and nuclear arsenal, something we don’t accept and never signed on the deal and we won’t let happen,” Netanyahu said Friday.

“My position vis-a-vis the deal with Iran… repeal or replace,” Netanyahu said, adding that Washington should not let Tehran “have the best of all world.”

The relations between Israel and Iran have been strained since the Iranian Revolution in the late 1970s. The ties are overshadowed by a number of issues, including Tehran’s nuclear and missile programs accompanied by controversial anti-Israeli statements of high-ranking Iranian officials, such as former Iranian President Mahmoud Ahmadinejad.

North Korea Threatens US With “Super-Mighty Preemptive Strike”

Whether China is right about North Korea conducting a nuclear test on April 25 remains to be seen, but for now Kim Jong-Un is content with merely escalating the verbal warfare and overnight North Korean state media warned the United States of a “super-mighty preemptive strike” following the latest round of comments by Rex Tillerson who said the United States was looking at ways to bring pressure to bear on North Korea over its nuclear programme.

The Rodong Sinmun, the official newspaper of the North’s ruling Workers’ Party, did not mince its words: “In the case of our super-mighty preemptive strike being launched, it will completely and immediately wipe out not only U.S. imperialists’ invasion forces in South Korea and its surrounding areas but the U.S. mainland and reduce them to ashes” it said according to Reuters.

The threat will hardly come as a surprise: the reclusive communist nation regularly threatens to destroy Japan, South Korea and the United States “and has shown no let-up in its belligerence after a failed missile test on Sunday, a day after putting on a huge display of missiles at a parade in Pyongyang.”

The comments come in response to Tillerson statement in Washington on Wednesday when he told reporters that “we’re reviewing all the status of North Korea, both in terms of state sponsorship of terrorism as well as the other ways in which we can bring pressure on the regime in Pyongyang to re-engage with us, but re-engage with us on a different footing than past talks have been held,”