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Energy & Commodities

Trump’s China Trip To Reap Billions In Energy Deals

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Posted by OilPrice.com

on Friday, 03 November 2017 06:52

Oil-drum-imageU.S. President Donald Trump will visit China November 8-10 for a series of bilateral and commercial events, including a meeting with Chinese President Xi Jinping.

On that trip, President Trump’s first visit to China—the country that he has repeatedly criticized for trade practices and the way it has handled relations with North Korea—the administration will be taking some 40 U.S. companies on a trade mission to forge deals and discuss Chinese investments in the U.S.

One of the biggest deals up for discussion is an investment of around $7 billion by an alliance including China Petroleum & Chemical Corporation, or Sinopec, for an oil pipeline in Texas and an expansion of an oil storage facility in the U.S. Virgin Islands, Bloombergreports, quoting a person familiar with the proposal. The deal is likely to be in the form of a non-binding memorandum of understanding, not a definitive contract. According to insiders, the investment will still need a final go-ahead by both the U.S. administration and China.

Sinopec, in partnership with ArcLight Capital Partners—a Boston-based private equity firm focused on energy infrastructure assets—and with Connecticut-based Freepoint Commodities, is expected to propose a project for building a 700-mile-long pipeline from the Permian to the Gulf Coast and a storage facility at the Coast, according to Bloomberg’s source. Sinopec also wants to expand an oil storage facility on St. Croix, U.S. Virgin Islands.



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Energy & Commodities

How Commodities Performed in 2017, and Why They’re Very Cheap

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Posted by VisualCapitalist.com

on Wednesday, 01 November 2017 06:46

If you’re looking for action, the commodities sector has traditionally been a good place to find it.

With wild price swings, massive up-cycles, exciting resource discoveries, and extreme weather events all playing into things, there’s usually never a dull day in the sector. That being said, it’s hard to remember a more lackluster period for commodities than in the last couple of years.

For commodity bulls, the good news is that the sector is no longer tanking. The bad news, however, is that all the recent action has been in relatively niche sectors, as metals like cobaltzinc, and lithium all have their day in the sun. 

At the same time, the big commodities (gold, oil, copper) have all slid sideways, having yet to revisit their former periods of glory.

ARE COMMODITIES CHEAP?

From the post-crisis bottom in 2009 until today, the S&P 500 is up a staggering 215.4%. 

During that same timeframe, most major commodities crashed and then went sideways. The Goldman Sachs Commodity Index (GSCI) is down roughly -31.2%, which is a strong juxtaposition to how equities have done.

This extreme divergence can be best seen in this long-term chart, which compares the two indices since 1971.

incrementum-commodities-vs-sp500-

In other words: despite the lack of action in commodities that we noted earlier, the sector has never been cheaper relative to equities even going back 45 years. 

That means that there could be some much-needed action soon.

COMMODITY WINNERS SO FAR



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Energy & Commodities

China’s Copper Tsunami

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Posted by Edelson Institute

on Tuesday, 31 October 2017 08:09

Man, the S&P 500 is on a roll. It’s up 14.2% this year so far. But you know what’s doing even better? Copper! Just look at this chart.

102617 1613 ChinasCoppe1

Copper’s up 27% so far this year. Wow!

Prices are up because demand for copper is red-hot. And global copper demand is led by China. China’s copper demand is projected to increase 3.1% this year alone. That leads the 2.5% rise in global copper demand.

In fact, on Monday, Goldman Sachs raised its 2018 price target for copper by 28%. The bank now expects a global copper deficit of 130,000 tons in 2018.

Here’s where it gets really interesting. Copper is said to have “Ph.D. in economics.” We call the metal “Doctor Copper” because it takes the pulse of the global economy.

The Pulse of a Megatrend



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Energy & Commodities

Energy Giant Bets On Battery Breakthrough Within 5 Years

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Posted by OilPrice.com

on Tuesday, 24 October 2017 06:58

d56c89edf567c9847d49a97db588c18fNorth Carolina-based utility provider Duke Energy is betting on the rise of increasingly efficient battery technology to propel the rise of solar and wind power over the next five years, according to a new report by Forbes.

“There’s going to be a lot of excitement around batteries in the next five years. And I would say that the country will get blanketed with projects,” Duke Energy business development managing director Spencer Hanes said on Thursday as part of a conference in Chicago.

....read more HERE

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Energy & Commodities

Miners Could Be Setting Up For A Big Hit Into Year End

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Posted by Avi Gilburt - Elliottwavetrader.net

on Tuesday, 24 October 2017 06:44

As I read through the blogs and public articles on miners and the GDX, it has become quite evident that many have now turned either bearish or completely indifferent to this complex. In fact, it seems as though the number of hits being seen in the Seeking Alpha metals section has dropped dramatically over the last year.

It seems most are looking for the metals to just drop from right here for a myriad of reasons. (Well, that is, other than those who only see the word “UP” when you mention the word “gold” to them). For those who usually place their expectation upon the immediate direction of the complex, it would seem that the recent drop in price has them expecting it will immediately continue to drop. Isn’t linear analysis wonderful? So, it would make sense, at least from a sentiment standpoint, that we need to get a number of them believing that the market is about to rally strongly, which will then trigger our trap door.

While my perspective is also a bit bearish in the intermediate term, I think we can be setting up a bit of a surprise in the short term.

Price pattern sentiment indications and upcoming expectations

So, as many are expecting continuation of the weakness in the GDX and mining stocks, I think we could be setting up more of a rally before the true weakness takes hold later this year. 

As long as the GDX remains over the lows struck in early October, I think the GDX can approach the 24.50-25 region. While there is still some potential that it can stretch as high as the 26 region, if it is unable to reach that high on the next rally, and then breaks back down below the October lows, that opens the door to a 30% decline in the GDX. 

Moreover, as I look to ABX, a leading stock in the GDX, as long as it remains below 18.35 on its next rally, and then breaks down below the lows we are currently striking, it opens a trap door for us to drop towards the 11 region.  This supports the estimated 30% drop I would expect in GDX, again, should we be unable to reach the 26 region in GDX or over 18.35 in ABX on the next rally.

sc-1

See charts illustrating the wave counts on the GDX.

 

Avi Gilburt is a widely followed Elliott Wave technical analyst and author of ElliottWaveTrader.net (www.elliottwavetrader.net), a live Trading Room featuring his intraday market analysis (including emini S&P 500, metals, oil, USD & VXX), interactive member-analyst forum, and detailed library of Elliott Wave education.



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