Oil Rigs decline slightly

Oil Rigs decline slightly

by Bill McBride on 7/21/2017 03:48:00 PM

A few comments from Steven Kopits of Princeton Energy Advisors LLC on July 21, 2017:

• Total US oil rigs were down 1 to 764

• Horizontal oil rigs were down 2 to 653

• $45 WTI seems sufficient to restrain US oil rig count growth

• However, shale well productivity yoy continues to surge based on early data.   If the numbers continue to hold up, $45 will soon be a ceiling, not a floor, and oil prices could fall to $39-42 / barrel WTI by this time next year

Oil Rig CountClick on graph for larger image.

CR note: This graph shows the US horizontal rig count by basin.

Graph and comments Courtesy of Steven Kopits of Princeton Energy Advisors LLC.

Next Week

Next Week

Next Week

July 21, 2017

Central Bank: Monetary policy meetings in the United States (but no press conference afterwards), Brazil, Russia, Turkey and Colombia. Bank of Japan to release a “summary” of its July meeting and minutes from its June Board meeting. Reserve Bank of Australia Governor Lowe speaks publicly.

Special Event: Meeting scheduled for Monday in St. Petersburg, Russia between some Opec and non-Opec oil policymakers in effort to broaden the disciplined production cutbacks.

Scheduled U.S. Data Releases: Second-quarter employment const index and GDP, benchmark GDP revisions, new and existing home sales, the FHFA house price index, the Case-Shiller house price index, the Kansas City and Richmond Fed manufacturing indices, durable goods orders, the Conference Board and U. Michigan/Reuters indices of consumer sentiment, the Chicago Fed National activity index, and the “advanced” trade deficit estimate. Also weekly jobless insurance claims, mortgage applications, consumer comfort, chain store sales, and energy inventories.

Japanese Statistics: Consumer prices, retail sales, real household spending, unemployment, the index of leading economic indicators, the preliminary manufacturing purchasing managers index (PMI), and corporate serevice prices.

Other Selected Asian Data: Chinese corporate profits and index of leading economic indicators. South Korean GDP, industrial output, retail sales and consumer sentiment. Singapore’s CPI, PPI, jobless rate, and industrial production. Hong Kong trade.

Euroland: Business sentiment, Money and credit growth, preliminary PMIs, and index of leading economic indicators.

Members of the Euro Area: German consumer prices, import prices, retail sales, consumer sentiment, and preliminary PMI results for July. French PMI, GDP, consumer spending, CPI, and  PPI. Italian, French, Finnish and Portuguese consumer confidence. Italian business sentiment and industrial orders. Greek, Finnish and Austrian producer prices. Austrian manufacturing PMI, industrial production and GDP. French business confidence and Cypriot industrial output.

U.K. and Switzerland: British GDP, consumer confidence, Nationwide house price index, and the CPI surveys of industrial trends and distributive trades. Switzerland’s UBS consumption indicator, ZEW expectations index and KOF index of leading economic indicators.

Eastern Europe: Polish and Hungarian unemployment. Czech business sentiment and consumer confidence.

Nordic Europe: Swedish GDP, retail sales, PPI, trade balanace and consumer sentiment. Danish and Norwegian retail sales. Swedish, Icelandic, and Norwegian unemployment. Icelandic wage costs.

Canada: May GDP and wholesale turnover.

Mexico and Brazil: Mexican GDP, retail sales and trade balance. Brazilian producer prices.

Australia, New Zealand and South Africa: Australian CPI, import prices, and money and credit growth. Australian and South African producer prices. New Zealand trade and business sentiment. South African unemployment and index of leading economic indicators.

Copyright 2017, Larry Greenberg. All rights reserved. No secondary distribution without express permission.

Tags: Economic Data Calendar


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Bitcoin Multi-Fork and News

Bitcoin Multi-Fork and News

Bitcoin has in the past few days, formed a clear reverse head and shoulders pattern, that finally ended in a spike up to the new Bitstamp weekly high of $2,628.67. This was an almost 19% gain from the previous sideways trading range, that was confined to movements between $2,219.02 and $2,401.93 respectively. Regardless, this is still lower than the prior monthly high of $2,789, which was realized more than 4 weeks before on June 21. On the other hand, we may see a breakout above this level, if volume continues to pick up and increase further.

We could be in for one or even two forks of the existing bitcoin blockchain. There are presently 4 node types operating independently: Core, UASF (BIP 148), btc1 (segwit2x) and ABC (UAHF). As to how this will affect trading, further reading on the ethereum and ethereum classic split may prove educational. Nonetheless, caution is advised due to the complexity, and possibility of there being two forks in close proximity of each other, instead of just one.

Coinbase has appropriately alerted all of its users about both the UAHF, and USAF forks.

There has been some backlash in regards to these announcements, mostly from media outlet Natural News. Even so, Coinbase has posted an official FAQ on the matter. Preparations are underway on other sites as well, such as BTCC and Yobit.

Business Insider reports that Goldman Sachs is highly bullish, citing that we could see a retest of the all-time high, and levels beyond even $3,000. Not exactly sure how a four-fold split of the community will bring about such a dramatic rise, although higher highs are likely up until the actual fork events. Likewise, there has been additional coverage from a CNBC article concerning bitcoin miners, as well as a second one noting Swiss legislation in detail.

Ethereum was also hacked again; another possible hard fork may be imminent here too.

Bitstamp’s US dollar/bitcoin pair reached a new weekly low on July 16, settling at $1,830 (GMT 10:00). It was the start of a powerful upturn, that halted short of $2,400 on July 18 (GMT 18:00). However, after practically 2 days of intense sideway trading, there was a strong explosive push to the new weekly high of $2,628.67.

If you have any questions or comments concerning bitcoin, please feel free to use the form below and reply or comment.

Ecuador Breaks Ranks With OPEC on Production Deal–Energy Journal

Ecuador Breaks Ranks With OPEC on Production Deal–Energy Journal

Here’s your morning jolt of news, insight and analysis on the global energy business.  Send us tips, suggestions and complaints: EnergyJournal@wsj.com.  Sign up for this newsletter: http://on.wsj.com/EnergyJournalSignup ECUADOR RENEGES ON OPEC DEAL Ecuador said it would no longer comply with a deal forged with other members of the Organization of the Petroleum Exporting Countries to scale back oil production, Benoit Faucon reports. Ecuadorian […]

Forex Tax Basics- Treatment of Forex Transactions

Forex Tax Basics- Treatment of Forex Transactions

forex tax basics

Photo Credit: FreeDigitalPhotos.net

By Jason Van Steenwyk

Section 998 vs Section 1256

The taxation of forex contracts is complex, but at least it gives you options. No pun intended. Among the key decisions any forex trader must make, though, is deciding on the tax regime that will govern his or her trades. How do you want your profits or losses to be treated under the tax code? Uncle Sam gives you two options: Do you want to treat them as an ordinary gain or loss, as described by Section 998 of the Internal Revenue Code? Or do you want to take advantage of lower long-term capital gains rates?

What’s that, you say? All your forex trades were concluded well within a 1-year period and you have no long-term capital gains? Au contraire, mon frer!  An often-overlooked quirk of the tax code, under IRC Section 1256, actually allows you to treat 60 percent of your capital gains from currency trading at the lower long-term capital gains rate – even though all your trades were short-term!

Section 1256 generally applies to foreign currency futures traded on U.S. exchanges, while other forex contracts fall by default under Section 998 – unless you opt out. More on that in a bit.

Under Section 1256, the IRS deems all long positions “sold” at the end of the year – whether or not they actually are – and marks profits or losses accordingly for tax purposes. The IRS uses the fair market value of the contracts as of the year-end to make the calculation.

Note: Per IRS Notice 2007-71, forex OTC options aren’t eligible for Section 1256 treatment. Section 1256 specifically refers to futures contracts, rather than options.

It’s up to you, however, to make the election. If you are trading in retail spot contracts or anything other than foreign currency futures contracts. the IRS will channel your trading into the Section 998 system. This is good if your trades were a net money loser: Treating your losses as ordinary losses, rather than capital losses, allows you to deduct your losses against any type of income. Caps on capital losses are removed, as long as you have other income to deduct them against.

Foreign currency gain or loss, defined.

For the purposes of Section 998, The term “foreign currency gain” means any gain from a section 988 transaction to the extent such gain does not exceed gain realized by reason of changes in exchange rates on or after the booking date and before the payment date.

The term “foreign currency loss” means any loss from a section 988 transaction to the extent such loss does not exceed the loss realized by reason of changes in exchange rates on or after the booking date and before the payment date.

That’s straight out of the IRC, Ch. 26, Section 988, which you can read here.

Opting Out

If you want to opt out of Section 998, and take your chances with Section 1256 instead, you must commence a written record that you intend to opt out. You don’t have to file anything in advance with the IRS, strangely enough. You just have to create this written documentation before you start entering trades.

Now, there’s an opportunity to cut a corner here: Some traders might prepare an opt-out document at the beginning of the year, and then ‘disappear it’ if they have net losses, taking advantage of the higher loss deductions under Section 988. Thus far, the IRS has been strangely tolerant of this practice. We don’t expect that to continue indefinitely. As forex traders become a bigger and bigger piece of the investment world, and as forex traders increasingly become a ‘deep pocket for the IRS to pick, that particular opt-out provision is likely to come under increased scrutiny in the future.

When Should You Opt Out?

When you believe your trading will be profitable, of course! By electing to have the IRS assess taxes based on Section 1256, you will benefit from a 60/40 allocation of long-term and short-term capital gains. That is, 60 percent of your gains will be taxed as long-term capital gains, while 40 percent of your trade will be taxed as short-term capital gains.

This is strongly preferable to treating profitable trading under Section 998, since if you are an active trader, all or nearly all your trades are likely to fall under the higher short-term capital gains tax.

To Take the 1256 Treatment

To take the 1256 treatment, you would file an IRS Form 6781 – Gains and Losses from Section 1256 Contracts and Straddles, in conjunction with the opt-out election document described above.

Your Form 1099

If you trade futures contracts, your forex broker should send you a Form 1099 already, detailing your trading gains and losses for the tax year. Look on Line 9 for your total gain or loss. However, If you’re out there surfing the interbank markets directly, you won’t get a 1099.

Have you learned forex tax basics of section 998 vs section 1256, treatment of forex transactions?

Note: WinnersEdgeTrading.com does not provide individualized tax advice. This article is for informational purposes only and should not be construed to represent specific tax advice. You should always make your decisions based on the advice of a qualified tax professional, experienced in forex trading matters, licensed in your jurisdiction.



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Nasdaq: Third times a charm?

Nasdaq: Third times a charm?

This is the Nasdaq’s third attempt to break out of the bull market channel. Once it holds we should shift into a higher gear as the bubble phase progresses.

About the Author

Gary Savage started SmartMoneyTracker in 2007 right before the bear market began, and called the top in Nov. 2007. Cycles and sentiment are his two primary analysis tools. In his teens, he was a national Judo champion. He was a national weightlifting champion at 26, and by 39 he was a world weightlifting champion and world record holder. An entrepeneur his entire life, he has multiple businesses in addition to SmartMoneyTracker.

Insider Weekly: Are Emerging Markets Making A Quiet Comeback?

Insider Weekly: Are Emerging Markets Making A Quiet Comeback?

In this week’s Insider Weekly, we zero in on emerging markets, an investment theme that has been off most investors’ radars for a number of years… but is now quietly and quickly moving higher. Another week of news providing us with more data in the ever-moving puzzle that is our global interconnected world. Still… there [Read More]

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As well as ongoing market commentary, members get specific trade recommendations from Chris MacIntosh & Co. on opportunities where the target return is often 1000%+.


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