{"id":52037,"date":"2020-03-30T13:27:21","date_gmt":"2020-03-30T18:27:21","guid":{"rendered":"https:\/\/olduvai.ca\/?p=52037"},"modified":"2020-03-30T13:27:27","modified_gmt":"2020-03-30T18:27:27","slug":"energy-collapse-earnings-ennui-consumer-credit-cracks","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=52037","title":{"rendered":"Energy Collapse, Earnings Ennui, &#038; Consumer Credit Cracks"},"content":{"rendered":"\n<h3 class=\"wp-block-heading\"><a href=\"https:\/\/www.zerohedge.com\/markets\/energy-collapse-earnings-and-consumer-credit-cracks\">Energy Collapse, Earnings Ennui, &amp; Consumer Credit Cracks<\/a><\/h3>\n\n\n\n<p><strong>Summary:<\/strong><\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\"><p><strong><em>The energy sector has lost extraordinarily $1.15trn in market value this year as oil prices have plunged to almost unimaginable levels.&nbsp;<\/em><\/strong><\/p><p><em>In this equity update we provide investors with&nbsp;<strong>different ways to play the havoc in the energy sector.&nbsp;<\/strong>We also take a look at earnings this week with especially Carnival earnings being the most interesting to watch as the cruise industry is in a severe crisis due to COVID-19.<\/em><\/p><p><em>Lastly, we focus on&nbsp;<strong>consumer credit and the apparent weakness observed in China and how that could be a forewarning of what to come in the US and Europe.<\/strong>&nbsp;As a result we recommend investors to add Mastercard and American Express to their watchlists.<\/em><\/p><\/blockquote>\n\n\n\n<p>The global energy sector has been punched in the gut by first a slowing economy last year and then this year by an oil price war between Russia and Saudi Arabia. Making things worst the sector is now experiencing an abrupt\u00a0<a href=\"https:\/\/www.washingtonpost.com\/business\/energy\/welcome-to-a-truly-free-oil-market\/2020\/03\/30\/39606878-7272-11ea-ad9b-254ec99993bc_story.html\"><strong>20% oil demand reduction<\/strong><\/a>\u00a0equivalent to 20mn barrels a day or the entire consumption of the US. The oil futures curve is in steep contango as the active contract in Brent today went below $23\/brl and stories have recently surfaced that\u00a0<a href=\"https:\/\/www.bloomberg.com\/news\/articles\/2020-03-25\/oil-s-60-crash-is-the-tip-of-an-iceberg-the-reality-is-worse\"><strong>physical oil is being transacted at $8\/brl<\/strong><\/a>\u00a0and\u00a0<a href=\"https:\/\/www.worldoil.com\/news\/2020\/3\/26\/oil-market-fears-us-is-running-out-of-crude-storage-capacity\"><strong>oil storage is running out of capacity<\/strong><\/a>. As we talked about on our Market Call this morning the constraint on physical storage and ongoing demand destruction could push the front-end of oil futures down even further.<\/p>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/zh-prod-1cc738ca-7d3b-4a72-b792-20bd8d8fa069.storage.googleapis.com\/s3fs-public\/inline-images\/saxo%201.jpg\" alt=\"\"\/><\/figure>\n\n\n\n<p><strong>The current oil price creates extreme shareholder destruction with the MSCI World Energy Index losing $1.15trn in market value this year.<\/strong><\/p>\n\n\n\n<p>\u2026click on the above link to read the rest of the article\u2026<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Energy Collapse, Earnings Ennui, &amp; Consumer Credit Cracks Summary: The energy sector has lost extraordinarily $1.15trn in market value this year as oil prices have plunged to almost unimaginable levels.&nbsp; In this equity update we provide investors with&nbsp;different ways to play the havoc in the energy sector.&nbsp;We also take a look at earnings this week [&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":[2,3],"tags":[130,1605,500,1097,596,29266,703,827],"class_list":["post-52037","post","type-post","status-publish","format-standard","hentry","category-economics","category-energy-2","tag-china","tag-consumer-credit","tag-market-collapse","tag-oil-price-war","tag-oil-supply","tag-peter-garnry","tag-saxo-bank","tag-united-states"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/52037","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=52037"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/52037\/revisions"}],"predecessor-version":[{"id":52038,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/52037\/revisions\/52038"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=52037"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=52037"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=52037"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}