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Oil Prices Slide As OPEC Opens The Valves – OilPrice.com

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Oil Prices Slide As OPEC Opens The Valves | OilPrice.com

Julianne Geiger

Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group.

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    Oil prices took another dive on Thursday, with the price of WTI falling more than 6% by late morning as OPEC’s production increased in September over August.

    Spot prices for WTI had fallen by 6.04% to $37.79 by 11:28 a.m. EDT, while Brent had dropped 5.22% to $40.09.

    The catalyst for this morning’s price drop is OPEC+’s September seaborne exports, which jumped to 22.84 million barrels per day from the 22.11 that the cartel exported by sea in August.

    For OPEC specifically, its exports rose from 17.53 million bpd in August to 18.2 million bpd in September.

    A Reuters survey shows that OPEC’s production for September was up 160,000 bpd from the previous month. OPEC is still in compliance. The culprits for this production increase is mostly Iran and Libya, both of whom are exempt from the production quotas.

    The market is interpreting this production increase as a viable threat to any oil market rebalancing.

    Further pressuring oil prices is the ever-present demand question—a metric that has been constantly pushed down by the pandemic. Bearish demand factors include another round of major airline layoffs affecting tens of thousands of employees, an impromptu lockdown of Madrid due to increasing coronavirus cases, and disappointing vaccine news—two separate vaccine trials have resulted in unpleasant side effects, including high fever, body aches, bad headaches, and exhaustion, just to name a few.

    While the vaccine news isn’t a death knell for either vaccine, they may reduce the number of people willing to sign up for the vaccine if either of these are ultimately approved.  

    It is the vaccine that OPEC has pointed to in a meeting on Thursday as the lynchpin to stabilizing the oil market and swiften “the pace of economic recovery.”

    By Julianne Geiger for Oilprice.com

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      Bombardier will get $275M for sale of aerostructures business to Spirit, less than originally agreed to – CBC.ca

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      Bombardier Inc. says it will receive less cash than it originally had agreed to in the sale of its aerostructures business to Spirit AeroSystems Holding Inc.

      The company says it will receive US$275 million in cash in the amended deal, down from the US$500 million in cash that was first announced last year.

      Spirit will also assume liabilities, including government refundable advances and pension obligations, valued at US$824 million.

      The sale includes operations in Belfast, U.K., and Casablanca, Morocco, as well as a maintenance, repair and overhaul facility in Dallas.

      Concerns about the future of the deal were raised last month after Spirit said some closing conditions were unmet, injecting a degree of uncertainty into the deal.

      Bombardier said Monday the closing conditions have been met and the transaction is expected to close on Friday.

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      Diane Francis: Cenovus-Husky deal another sign of the deliberate stranding and sabotage of Canada's oilpatch – Financial Post

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      Article content continued

      So my guess is that Trudeau will throw copious amounts of tax dollars into the questionable Newfoundland oil project to prop up his pal and Liberal cronies with contracts there, while continuing to spite the West’s struggling oil industry because they are Tories.

      The only good news is that Western Canada’s oil sector is not a sunset industry. Its prospects may be lousy in the short term, but not in the medium to long term. Oil will continue to dominate the world’s energy mix for several more decades to come, according to the International Energy Agency. This means prices will increase again and some analysts predict that they will likely jump upwards of 115 per cent from where they are by the end of the year. Alberta is also blessed with brilliant entrepreneurs, innovators and an enviable work ethic.

      Yet a recent Statistics Canada report blames the federal government’s damaging energy policies for contributing to the 35 per cent decline in oil and gas investment over the past five years and massive job losses. It forecasts that investment could shrink by another 40 per cent this year and another 220,000 jobs could be lost.

      If that happens, then all bets are off in terms of national unity.

      This weekend, when I read about the merger, I recalled the promise of the past. It’s been 34 years since Li Ka Shing was welcomed and feted in Calgary for investing, and believing, in Canada. Oh how times have changed.

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      Stock market live updates: Dow slides 900, VIX jumps above 30, reopening stocks lead losses – CNBC

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      Dow closes down more than 600 points

      The market indexes finished a dreary Monday off of session lows but still down sharply. The Dow lost 650 points, while the S&P 500 fell 1.9%. The Nasdaq Composite was the relative outperformer but still sank 1.6%. — Jesse Pound

      Pelosi finishes call with Mnuchin but ‘progress depends on’ McConnell

      House Speaker Nancy Pelosi’s spokesman said on Twitter that the Democratic leader remains “optimistic” about a pre-election deal after Monday’s phone call with Treasury Secretary Steven Mnuchin. However, spokesman Drew Hammill said that Democrats are still waiting on the White House to accept its language around Covid-19 testing and that “our progress depends on Leader McConnell agreeing to bipartisan, comprehensive legislation.” — Jesse Pound

      Market trimming losses in final hour

      Stocks have eased back from their session lows as the end of the session approaches. The Dow last traded down 690 points, while the S&P 500 and Nasdaq Composite were down 2% and 1.8%, respectively. — Jesse Pound

      Volatility index climbs above 33

      The Cboe Volatility Index extended its gain for the session to nearly 6 points and traded above the 33.4 level. The measure commonly known as the “fear gauge” is on track for its highest close since Sept. 3. If it closes above 33.6 it will the highest reading since June. — Jesse Pound

      Final hour of trading: Stocks plunge to start the week

      The major averages were sharply lower with an hour left in the trading session amid concerns over a spike in coronavirus cases and stalled stimulus talks. The Dow dropped 735 points, or 2.6%. The S&P 500 slid 2.1% and the Nasdaq Composite pulled back 1.9%. —Fred Imbert

      Bernstein says no update from Pfizer on vaccine is potentially worrying

      Pfizer management previously said that they expected to have an update on the company’s Covid-19 vaccine in October. But the month is now nearing its end and the company still hasn’t provided additional information, which Bernstein said could potentially be worrying. “Some investors have begun to ponder if this delay means the first interim analysis has missed, and, if so, what this means for the likely efficacy of the vaccine,” the firm said in a note to clients.

      Pfizer, which reports earnings on Tuesday before the opening bell, is developing its vaccine candidate in partnership with BioNTech. — Pippa Stevens

      S&P 500 still well above next support level, BTIG says

      The S&P 500 was still trading about 5% above its next support level despite Monday’s sell-off, according to a note from BTIG’s Julian Emanuel and Michael Chu.

      “The market is likely to drift lower near term (first SPX support at 3,209) in the face of Stimulus disappointment … Virus resurgence … and intensifying Election uncertainty,” the strategists said in a note Monday morning. — Jesse Pound

      The election could be closer than investors think, strategist says

      Wall Street may have been warming up to the idea of so-called Blue Wave as former President Joe Biden holds a sizeable lead in the national polls. However, Aegon Asset Management’s Frank Rybinski thinks investors should brace themselves for a very close contest.

      “A lot of the local races are a lot closer” than the national polls, said Rybinski, the firm’s chief macro strategist. He also noted that a recent Gallup poll found that 56% of Americans thought they were better off today than they were four years ago.

      “That’s the first reading [on that question] above 50% that we’ve had going back like 40 years,” he said. “If [former House Speaker] Tip O’Neill was right and all politics are local, you don’t get more local than  your own household finances. That tells me this is going to be a much tighter race than the national polls suggest.” —Fred Imbert

      Longer term outlook ‘keeps me optimistic,’ Lindsey Bell says

      Ally Invest Chief Investment Strategist Lindsey Bell pointed to rising Covid-19 cases and the sagging hopes for a stimulus deal as reasons for Monday’s sell-off. Still, she said the outlook for next year and beyond served as motivation for investors to hold firm.

      “Put it all together, and the setting feels eerily familiar. I’m keeping my eye on 2021 projections and the longer-term outlook. That keeps me optimistic about staying invested,” Bell said. — Jesse Pound

      Investors should buy this dip, UBS advisor says

      Teresa Jacobsen, managing director at UBS Wealth Management, said she thinks investors should buy during Monday’s market sell-off despite uncertainties around stimulus and the coronavirus pandemic.

      “On a day like today where you’re seeing volatility, this is giving investors a chance to build positions, and we’re encouraging clients to use that volatility do so,” Jacobsen said.

      Jacobsen said there was the potential for a more dramatic sell-off in the short term but pointed to a strong earnings season so far and progress on vaccines as reasons for this to not be a protracted downturn.

      “I think there a lot of positives over the longer term for investors,” she said. — Jesse Pound

      Pelosi says two sides still differ on testing plan

      House Speaker Nancy Pelosi said in a letter to Democratic lawmakers that she and the White House still disagree about health care portions of an additional stimulus bill, including a testing strategy for the coronavirus.

      “In all of our legislation, we have stressed the importance of testing, but the Administration has never followed through. The Republicans’ continued surrender to the virus – particularly amid the recent wave of cases – is official malfeasance,” Pelosi said. “We must come to agreement as soon as possible. But we cannot accept the Administration’s refusal to crush the virus, honor our heroes or put money in the pockets of the American people,” she said. — Jesse Pound

      Monday’s double whammy serves as a ‘harsh reminder,’ strategist says

      The sharp sell-off on Monday, triggered by a record surge in new coronavirus cases and waning hopes for a stimulus deal before the election, served as a reminder that we are not out of the woods yet in terms of the economic recovery, according to Ryan Detrick, chief market strategist for LPL. “The double whammy of a stalled stimulus bill and new highs in cases is a harsh reminder of the many worries that are still out there,” Detrick said. “Most of the recent economic data has been strong, but when you see parts of Europe going back to rolling shutdowns, it reminds us this fight is still far from over.” The Dow dropped 950 points at its session low in afternoon trading, and the S&P 500 last traded 2.7% lower.— Yun Li

      Here are some of the biggest movers midday

      • Dunkin’ Brands — Dunkin’ shares spiked after the company said it was in early talks about potentially being acquired by Inspire Brands.
      • Hasbro — Shares of the toy maker fell sharply despite the company posting better-than-expected results for the previous quarter.
      • Lordstown Motors — The Ohio-based electric vehicle maker saw its stock briefly jump in the company’s public-market debut. The stock began trading on Monday after a reverse merger with DiamondPeak Holdings, a SPAC.

      Click here to read more. —Fred Imbert

      Markets at midday: Stocks drop, Dow heads for worst day since September

      The major averages were sharply lower on Monday as concerns over the growing number of U.S. coronavirus cases and a lack of fiscal stimulus dented market sentiment. The Dow traded more than 700 points lower, or 2.6%, and was headed for its biggest one-day drop since Sept. 3. The S&P 500 slid 2.1% and was on pace for it worst day since Sept. 23. The Nasdaq Composite dropped 1.7%. —Fred Imbert

      Volatily Index jumps above 30

      The Cboe Volatility Index jumped about 3.7 points to trade above 31.20 on Monday morning. The index, often called Wall Street’s “fear gauge,” hasn’t closed above 30 since Sept. 8. The measure is still well below where it was during the coronavirus-sparked sell-off in March. — Jesse Pound

      Stock sell-off accelerates

      Stocks continued their downward march throughout morning trading. At the low, the Dow fell 714 points for a loss of 2.52%. The S&P 500 declined 2.14% at its low, while the Nasdaq Composite dipped 1.73%. — Pippa Stevens

      Dow on pace to break below its 50-day moving average

      Monday’s sell-off has put the Dow Jones Industrial Average on pace to close below its 50-day moving average level of 28,021.68 for the first time since Sept. 29. The moving average is a widely watched momentum indicator. The 30-stock average has not closed below 28,000 since Oct. 6 when the Dow closed at 27,772.76.

      The S&P 500 fell 1.4% in morning trading to around 3,418, just above its 50-day moving average level of 3,409.08. — Gina Francolla, Yun Li

      Airlines, cruise line operators lead declines

      Amid a surge in Covid-19 cases and stalled stimulus talks, airlines and cruise line operators led stocks lower on Monday. The two groups are especially sensitive to an uptick in coronavirus cases.

      United Airlines dropped 4.6%, while Delta, American, Alaska Air and JetBlue were all down more than 3%.

      Norwegian Cruise Line, Royal Caribbean and Carnival all declined more than 7%. — Pippa Stevens

      BlackRock downgrades Treasuries ahead of election

      BlackRock on Monday downgraded U.S. Treasuries and upgraded their inflation-linked peers ahead of the election on a growing likelihood of significant fiscal expansion, which could trigger a rise in price pressures. “Markets are increasingly reflecting a unified Democratic government outcome that may lead to a significant fiscal expansion,” Mike Pyle, BlackRock’s global chief investment strategist said in a note. “This electoral outcome would bring forward the market pricing of the higher inflation regime that we were already reflecting in our strategic asset views.” The benchmark 10-year yield, which moves opposite prices, hit a four-month high of 0.84% last week. — Yun Li

      Netflix, Amazon in the green

      Amid a broad sell-off on Monday, Netflix and Amazon were among the stocks trading in the green. The two tech companies are seen as beneficiaries of stay-at-home trends, and as Covid-19 cases surge across the U.S. and the world, investors wagered they could be set to accelerate gains. Each stock was about 1.5% higher during early trading. — Pippa Stevens

      Cramer says the market should focus on Dunkin’ bid, not poor SAP results

      CNBC’s Jim Cramer shrugged off the steep slide in SAP shares after the software company’s disappointing earnings report, saying he believes its quarterly results should not guide broader investor behavior.

      “I thought that the market should have focused on Dunkin’ Donuts, because here has been a red-hot stock, doing incredibly well, and then gets a bid anyway,” Cramer said on “Squawk on the Street.” “If we just focus on Dunkin’, what does it say about so many of our stocks that have actually been doing well?”

      He also noted a positive analyst note on Calvin Klein-owner PVH, as well as an upgrade for the stock of Kontoor Brands, which owns the Wrangler brand. “The whole process of being casual at home, another positive thesis, so I’m seeing too much good, not enough bad, to let SAP color this morning,” he said. – Kevin Stankiewicz 

      Stocks decline as stimulus talks stall

      Stocks dropped out of the gate on Monday as stimulus talks drag on. The Dow Jones Industrial Average declined 303 points for a loss of 1%, while the S&P 500 shed 0.96%. The Nasdaq Composite opened 0.82% lower. A surge in Covid-19 cases across the country also weighed on sentiment. — Pippa Stevens

      SAP plunges 20% as company sends a warning on Covid impact on business

      As Covid-19 cases surge, a warning from Europe’s biggest software company that businesses are holding back on spending added to the chill in markets Monday morning.

      SAP cut its earnings and revenues forecast for 2020, noting that its customers are spending less, as virus cases surge in Europe. “Lockdowns have been reintroduced in some regions, recovery is uneven and companies are facing more business uncertainty,” SAP said.

      SAP also said it was shifting more of its efforts to cloud computing, a move that is expected to depress its margins. JPMorgan cut its rating on the company to neutral from overweight.

      SAP shares were down 20% Monday, wiping about $30 billion off its valuation in its worst trading day in 12 years. — Patti Domm

      Here are Monday’s biggest analyst calls of the day: Apple, Palantir, Winnebago, Lululemon & more

      • Evercore ISI added Apple to the tactical outperform list.
      • JPMorgan initiated Zscaler as overweight.
      • Bank of America upgraded Kontoor Brands to buy from neutral.
      • Raymond James upgraded D.R. Horton and Toll Brothers to outperform from market perform.
      • Atlantic Equities reinstated Apple as overweight.
      • JPMorgan added Lululemon to the focus list.
      • Morgan Stanley initiated Palantir as overweight.
      • Citi upgraded Winnebago to buy from neutral.

      Pro subscribers can read more here.Michael Bloom

      Covid cases spike over the weekend

      Coronavirus cases are spiking in the U.S. and abroad, raising concerns about the pandemic into the winter months. The U.S. reported 83,757 new Covid-19 cases on Friday, passing the last record of roughly 77,300 cases seen in mid-July, according to data compiled by Johns Hopkins University. On Saturday, the U.S. reported another 83,718 new coronavirus cases.

      The U.S. on Sunday set a new daily record of 68,767 cases on a seven-day average, according to a CNBC analysis of data from Johns Hopkins University. 

      White House chief of staff Mark Meadows said the U.S. is not going to control the coronavirus pandemic on Sunday. “We’re not going to control the pandemic,” Meadows told CNN. “We are going to control the fact that we get vaccines, therapeutics and other mitigations.”

      Cases are also spiking around the world, with Italy, France and Spain seeing outbreaks worsen. Spain ordered a nationwide curfew on Sunday and Italy tightened restrictions over the weekend.

      Global cases are over 43 million and U.S. cases are more than 8.6 million. — Maggie Fitzgerald

      AstraZeneca says its coronavirus vaccine produces immune response

      Shares of AstraZeneca rose 0.8% in the premarket after the company said its coronavirus vaccine candidate triggered an immune response among adults.

      “It is encouraging to see immunogenicity responses were similar between older and younger adults and that reactogenicity was lower in older adults, where the COVID-19 disease severity is higher,” an AstraZeneca spokesman told CNBC via email. “The results further build the body of evidence for the safety and immunogenicity of AZD1222.” —Fred Imbert, Sam Meredith

      Ant Group on track for largest IPO on record

      China-based Ant Group will raise $34.5 billion in its dual initial public offering, making it the biggest listing of all time. The financial technology giant said it will split its stock issuance across Shanghai and Hong Kong, issuing 1.67 billion shares in each location. Based on where the company priced the new shares, Ant Group’s valuation stands at $313.37 billion.

      The prior largest IPO on record was Saudi Aramco, which raised just over $29 billion in its IPO. — Arjun Kharpal, Pippa Stevens

      Dunkin jumps after announcing potential merger

      Shares of Dunkin’ Brands surged 17% in premarket trading after the company said in a statement that it is exploring a deal with Inspire Brands that would take the Dunkin’ Donuts parent private. Dunkin’ has already reclaimed its pre-pandemic highs. — Jesse Pound

      Stimulus hopes dwindle

      With the election less than two weeks away, hopes are dwindling that an agreement on additional stimulus measures will be reached by Nov. 3. Over the weekend White House chief of staff Mark Meadows and House Speaker Nancy Pelosi accused each other of moving the goalposts on stimulus talks in separate interviews with CNN. — Pippa Stevens

      Dow futures drop more than 200 points

      U.S. stock futures came under pressure during early trading on Monday as Covid-19 cases across the country surge. Futures contracts tied to the Dow Jones Industrial Average fell 264 points, indicating a more than 300-point drop at the opening bell. S&P 500 futures shed 0.88%, while Nasdaq 100 futures declined 0.7%.

      The U.S. reported more than 83,000 new Covid-19 cases on both Friday and Saturday, topping the previous high of 77,300 new cases in July, according to data from Johns Hopkins University. Amid the spike, White House chief of staff Mark Meadows said in a CNN interview that “We’re not going to control the pandemic. … We are going to control the fact that we get vaccines, therapeutics and other mitigations.”

      The major averages are coming off a week of losses. The Dow and S&P each snapped a three-week winning streak, while the Nasdaq posted its first down week in five. — Pippa Stevens

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