{"id":18471,"date":"2016-03-04T06:32:09","date_gmt":"2016-03-04T11:32:09","guid":{"rendered":"http:\/\/olduvai.ca\/?p=18471"},"modified":"2016-03-04T06:33:47","modified_gmt":"2016-03-04T11:33:47","slug":"dallas-fed-unplugs-oil-bulls-warns-of-liquidity-crunch-contagion","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=18471","title":{"rendered":"Dallas Fed Unplugs Oil Bulls, Warns of Liquidity Crunch, Contagion"},"content":{"rendered":"<header>\n<h3 class=\"entry-title\"><a href=\"http:\/\/wolfstreet.com\/2016\/03\/03\/dallas-fed-unplugs-oil-bulls-warns-of-liquidity-crunch-contagion\/\" target=\"_blank\">Dallas Fed Unplugs Oil Bulls, Warns of Liquidity Crunch, Contagion<\/a><\/h3>\n<\/header>\n<div class=\"entry-content\">\n<p><strong>\u201cNegative ripple effects\u201d<\/strong><\/p>\n<p>The rally in crude oil has been red hot. In the three weeks since February 11, WTI shot up a short-crushing 34% to $34.69 a barrel at the moment. Now the talk in the oil patch is at what price these desperate shale oil drillers will once again\u00a0<em>increase<\/em>\u00a0production.<\/p>\n<p>Continental Resources CEO John Hart and Whiting Petroleum CEO Jim Volker told\u00a0<a href=\"http:\/\/www.reuters.com\/article\/us-usa-oil-shale-idUSKCN0W20JH\">analysts<\/a>\u00a0this week that they\u2019d step on the accelerator once oil reaches the $40 to $45 range. After all, drillers have to produce oil to be able to service their mountain of debts. They can\u2019t just switch to selling T-shirts.<\/p>\n<p>Alas,\u00a0that looming increase in production won\u2019t help deal with the glut.\u00a0And a glut it is.<\/p>\n<p>Dallas Fed President Robert Kaplan hammered this home as part of a wide-ranging\u00a0<a href=\"http:\/\/www.dallasfed.org\/news\/speeches\/kaplan\/2016\/rsk160303.cfm\" target=\"_blank\">speech<\/a>\u00a0today. And he wasn\u2019t speaking only for himself or stating his own wayward opinion. Instead, he started out his comments concerning oil with this: \u201cIt is our view at the Dallas Fed that\u2026.\u201d So this is official.<\/p>\n<p>The Dallas Fed, whose district in addition to Texas includes northern Louisiana and southern New Mexico, figured that global oil production in 2016 will exceed consumption by an average of 1 million barrels per day. So that would amount to adding another 300 million barrels by year-end to the already ballooning crude oil inventories around the world.<\/p>\n<p>In OECD countries, inventories continue to rise, he said, and are now at \u201croughly 400 million barrels above the historical five-year average.\u201d<\/p>\n<p>But the excess of production over consumption is coming down to 500,000 barrels per day by the end of the year, not because production will decline, but because consumption in 2016 is expected to grow by about 1.2 million barrels per day:<\/p>\n<p>&#8230;click on the above link to read the rest of the article&#8230;<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Dallas Fed Unplugs Oil Bulls, Warns of Liquidity Crunch, Contagion \u201cNegative ripple effects\u201d The rally in crude oil has been red hot. In the three weeks since February 11, WTI shot up a short-crushing 34% to $34.69 a barrel at the moment. Now the talk in the oil patch is at what price these desperate [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[184,7051,3730,303,2164,588,12745,4254,4255],"class_list":["post-18471","post","type-post","status-publish","format-standard","hentry","category-economics","tag-crude-oil","tag-crude-oil-storage","tag-dallas-fed","tag-fed","tag-oecd","tag-oil","tag-robert-kaplan","tag-wolf-richter","tag-wolfstreet"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/18471","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=18471"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/18471\/revisions"}],"predecessor-version":[{"id":18472,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/18471\/revisions\/18472"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=18471"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=18471"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=18471"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}