Nickel Price Surging As Hype Escalates During LME Week

It’s LME Week and there’s cause for celebration in metal markets. European mining stocks rose to a 4-year high as the nickel price surged more than 5% intraday to a two-year high and rose by the daily limit in Shanghai trading today. Metals used in electronic vehicles, like lithium, cobalt, copper and nickel, are hot right now and a focal point of discussion at the LME gatherings. As Metal Bulletin noted, the 2017 event has seen record attendance.

The annual LME Dinner week kicked off in a positive note, with record numbers gathering for the exchange’s keynote metals seminar on Monday October 30. “We have over 900 people over the day here…which is a record attendance,” London Metal Exchange chief executive officer (CEO) Matthew Chamberlain said.

Despite relatively high inventories, big miners and metal traders are becoming increasingly bullish on nickel’s prospects. According to Bloomberg...

Glencore Plc and Trafigura Group Pte are often at loggerheads, but one thing they agree on: the nickel market will be transformed by the rise of electric cars. Nickel sulphate, a key ingredient in lithium-ion batteries, will see demand increase 50 percent to 3 million metric tons by 2030, Saad Rahim, chief economist at Trafigura, said in an interview. While other battery metals like cobalt and lithium have more than doubled since the start of last year, nickel prices have been subdued because of large inventories.

"When you look structurally, we should start to get bullish now,” Rahim said.

 

“Are you going to be able to meet that demand when the time comes, given underinvestment in the supply side?”

Glencore, which was devastated by the downturn in nickel, is also optimistic, as are some of the analysts, as Bloomberg notes...

(Glencore) told analysts recently that nickel production would need to increase 1.2 million tons by 2030, equal to more than half of current global output, to keep up with demand from the battery industry. Prices are currently more than double what it costs Glencore to mine the metal. It’s a surprising mood change for a market with a disastrous reputation. Nickel was long a thorn for Glencore, which was saddled with unprofitable operations following its takeover of Xstrata. It sold an Australian nickel mine, which Xstrata bought in 2007 for $2.4 billion, for just $19 million in 2015.

 

“The nickel industry’s been a bit of a dog since about 2007,” Oliver Ramsbottom, a partner at McKinsey & Co. in Tokyo, said by phone.

 

The battery industry could revive the fortunes of miners more than a decade after nickel collapsed from a peak of $51,600 a ton in 2007

Despite the hype, Bloomberg cautions that there are still naysayers highlighting elevated inventories and the potential for supply to ramp-up faster than currently expected.

Still, some analysts are skeptical that the bullish scenarios will play out. Electric cars are still a niche industry and nickel oversupply remains a threat, with current stockpiles four times bigger than since the start of 2012.

 

Indonesia has authorized its largest producer to export more nickel ore. The Philippines has also discussed ending a ban on open-pit mining, raising concerns that supply will spike.

 

“For years, the market has completely dismissed the idea that something positive could happen in nickel,” Ingrid Sternby, senior research analyst at Blenheim Capital Management LLP, said in an interview in London. “With the recent announcements about Indonesia and the Philippines, it’s easy to see why the market is still scary enough for people not to want to be involved…

 

“You can see the tightness ahead in the nickel market, but my concern is that we’re going to see a lot of value destroyed along the way,” said Colin Hamilton, managing director for commodities research at BMO Capital Markets Ltd.

 

“If the miners really believe in the EV growth story, the thing to do would be to keep the nickel in the ground until the deficit arrives.”

When assessing the prospects for nickel, it is really two separate markets, nickel alloyed with iron and nickel sulphate used in batteries. Bloomberg expects the latter to progressively trade at a premium to the former.

About half of global nickel production is in the form of ferronickel or nickel pig iron, which is nickel alloyed with iron, making it suitable for stainless steel. Battery makers, instead, use nickel sulphate, produced by dissolving pure nickel metal in sulphuric acid. One hope is that the pricing of nickel pig iron and the high-grade nickel sulphate will diverge in the coming years, improving the fortunes of miners that can produce battery-quality material.

 

The global nickel market is heading for a deficit once above-ground stockpiles of battery-grade metal are consumed, according to Wood Mackenzie. The question for miners is how quickly the premium for top-quality nickel will emerge.

The nickel alloy versus nickel sulphate certainly adds complexity to analysing nickel. However, while the fundamentals for the latter seem very positive, it makes us slightly nervous when record numbers of participants gather at industry jamborees.

Still, politicians and automakers are increasingly counting on a future of electric cars, attracting traders such as Trafigura.

“Will we see a real breakout in next 12 months? That’s hard to see, but beyond that, structurally this looks to be going up,” Rahim said.

 

One Of The World's Biggest Sovereign Wealth Funds Is About To Become A Seller

As regular readers may recall, one of the alleged reasons for the market swoon at the end of 2015 and early 2016 was what Deutsche Bank first dubbed "quantitative tightening" but not by central banks (that would come later), but by sovereign wealth funds in general - with an emphasis on petrodollar nations who were struggling to balance their budgets at a time of plunging oil prices and were forced to sell assets - and China in particular, which faced with a tumbling Yuan was forced to sell billions in US-denominated securities to halt the sharp devaluation of the Yuan.

Now, after a period of relative stability for sovereign wealth funds, in which the indiscriminate SWF/China selling of 2015 faded into a distant memory, one of the world’s biggest buyers of trophy assets is about to become a seller again. According to Bloomberg, following the ongoing isolation by its powerful Arab neighbors, Qatar’s sovereign wealth fund is reversing a decade-long run in high-profile foreign investments to buttress its own economy.

The Qatar Investment Authority, or QIA, which has already reduced its holdings in Credit Suisse, Rosneft and Tiffany in recent months, is considering unleashing what could be a liquidation tsunami in this illiquid market, selling more of its $320 billion of assets, which includes stakes in Glencore and Barclays, and using the proceeds to bolster the domestic economy, according to Bloomberg sources.

The selling, which we previewed back in June amid an overview of Qatar"s deteriorating financial system, will probably not come as a surprise: "Sovereign wealth funds, such as the Qatar Investment Authority, are always national buffers against adverse risk events, ” said Sven Behrendt, managing director of GeoEconomica in Geneva. “Since the boycott is such a risk event for Qatar, the assets stored within QIA will need to serve as such a buffer.”

Created over a decade ago, in 2005, to handle Qatar’s vast windfall from sales of LNG of which it is the world’s biggest exporter, the QIA and other Qatari investors have amassed holdings in Hollywood, New York office space, London residential property, luxury Italian fashion and even a soccer team. The QIA ranks as the ninth largest globally, according to the Sovereign Wealth Fund Institute.

Meanwhile, Qatar"s banks have already sensed the change in the wind direction, and having pitched acquisition targets to the QIA for years "are now proposing asset sales, and have been told not to expect any major investments by the fund in the near term." The fund hasn’t formally hired financial advisers to dispose of any assets but is considering which stakes are best positioned to be offloaded, they said. The QIA declined to comment.

Quoted by Bloomberg, Rachel Pether, a senior adviser at the Sovereign Wealth Fund Institute said that "the QIA is being fiscally prudent by not actively pursuing new investments." She added that “the QIA has approximately 57 percent of its portfolio in publicly listed securities, which means there is reasonable liquidity in its portfolio if further support is required."

The QIA last year saw its biggest overhaul since 2014, grouping $100 billion of investments in local companies into a new unit and abandoning the Qatar Holding name synonymous with its highest-profile deals, people with knowledge of the matter said at the time.

After a dip in transactions in 2015 and 2016 as oil prices slumped, the fund regained its appetite for deals late last year, investing in Turkey’s biggest poultry producer, Rosneft, and U.K. gas company National Grid Plc, all within a couple of months.

All that, however ended after a Saudi-led standoff that started in June has put the small but rich (with the world"s highest GDP/capita ratio in the world) in a vice.

Confirming the start of the upcoming liquidation phase, CEO Sheikh Abdullah Bin Mohammed Bin Saud Al Thani said last month that the QIA plans to spend most of what remains of its $45 billion investment target on U.S. assets as it seeks diversification. As Bloomberg adds, the fund is also considering selling some of its extensive property portfolio, especially in the U.K. where it owns stakes in London’s Savoy Hotel, the Shard skyscraper and the Olympic Village. The QIA also wants to sell an office building in London’s Canary Wharf financial district that is leased to Credit Suisse, people familiar with the matter said last month.

In other words, already reeling from the withdrawal of Ultra high net worth buyers, the London real estate market is about to get hit by a double whammy of selling from the very top.

The QIA has injected billions of dollars into local banks to shore up liquidity after Saudi Arabia, the United Arab Emirates and Bahrain cut diplomatic ties on June 5 amid accusations of funding terrorism, prompting their lenders to withdraw funds from Qatar, people familiar with the matter said at the time. Qatar has repeatedly denied the charges.

Qatar should also look at other assets that could be used as alternative buffers to reduce some of the heat on QIA, said GeoEconomica’s Behrendt.

“The diplomatic boycott and economic blockade of Qatar sees basically two strategies employed by the parties: the Saudi-led coalition employs a ‘wearing down’ approach, Qatar a ‘holding out’ strategy,” he said. “In the end it will be about who will have the longer staying power.”

And while the QIA liquidation was telegraphed months in advance, a bigger question is if now that SWFs are once again selling assets to shore up the domestic economy, will others follow, and specifically, will Saudi Arabia be next. As Bloomberg"s Javier Blas showed this morning, Saudi FX reserves tumbled $6.9 billion in August, and are down a whopping $48bn YTD, effectively in line with the drop over the same period in 2016, when Saudi Arabia saw $54bn in reserves flow out, on lower oil output and prices.

#SaudiArabia FX reserves fell $6.9 billion in August (Jan-Aug 2017: -$48bn, same period 2016: -$54bn) on lower #oil output #OOTT #OPEC pic.twitter.com/z50TYnQdK0

— Javier Blas (@JavierBlas2) October 3, 2017

If and when Saudi Arabia joins the QIA as a motivated seller (at any price), and as central banks withdraw as buyers of first, last or any resort, the sudden risk asset air pocket of 2015/2016 may seem like a walk in the park in retrospect.

Did This Oil & Gas Deal Just Change The Global Energy Balance?

Authored by Dave Forest via OilPrice.com,

One of the biggest energy stories this year has been Russia’s Rosneft buying India’s Essar Oil - giving the Russian company a firm grip on one of the world’s biggest emerging oil and gas markets. 

And this past week, that story got more complex. With Rosneft striking another big deal — drawing in another heavyweight energy nation. 

China. 

Rosneft announced Friday it is selling a significant chunk of its equity to Chinese investors. In this case, little-known exploration and production firm CEFC China Energy. 

Although few investors know CEFC, the company is bringing significant capital to the deal. With the firm agreeing to pay $9 billion to acquire a 14.16 percent stake in Rosneft. 

The deal is historic in being the first major buy-in by China into the Russian oil and gas sector (although Chinese firms have been involved in financing LNG export projects in the Russian Arctic).

Showing the strength of the ever-growing ties between Russia and China in the energy space. 

Rosneft and CEFC have been at the center of that burgeoning relationship. With the two companies having signed a deal this past September for long-term supply of Russian crude into China. 

This week’s equity purchase further cements those business ties. And shows that China sees Russia as a critical ally in the energy game going forward.

But there are implications well beyond these two countries. With China now having backdoor access into markets like India — through Rosneft’s recently-acquired holdings in that country. 

That’s a critical development for the world energy picture. Given that Chinese companies haven’t directly gained much access into India — despite the nation being one of the most important emerging players on the energy stage. 

Ownership in Rosneft could help change that. And could open up opportunities in other parts of the world — with Rosneft currently having operations in places ranging from Egypt to Brazil to Venezuela. 

An intriguing side note to the story: CEFC is buying the Rosneft stake from Glencore, and Qatar’s sovereign wealth fund. Who reportedly purchased the interest just nine months ago — for $12 billion.

That means these holders are taking a 25% loss on the sale, less than a year after buying in. But in the meantime, Glencore was able to strike a lucrative deal to trade Rosneft’s Russian crude — probably making up for the losses on the Rosneft equity, and then some. 

All of which shows just how complex things are in this rapidly-changing corner of the energy world. Watch for more China-Russia energy deals — and emerging influence from these two energy superpowers in other key markets like India.

The Real Story Behind Goldman's Q2 Trading Loss: How A $100M Gas Bet Went Awry

Goldman Sachs FICC-trading income was an unexpectedly ugly blemish on what was already a poor Q2 earnings report. And while the FDIC-backed hedge fund initially blamed the decline on lower trading revenues, lack of volatility and depressed client activity...

... there was more to the story. The Wall Street Journal has uncovered what really happened: A $100 million bet on regional natural-gas prices gone awry after production problems at a local pipeline sent prices soaring, decimating Goldman’s short position.

“Goldman wagered that gas prices in the Marcellus Shale in Ohio and Pennsylvania would rise with the construction of new pipelines to carry gas out of the region, said people familiar with the matter. Instead, prices there fell sharply in May and June as a key pipeline ran into problems.”

More specifically…

“Goldman’s key miscalculation last quarter was betting that natural-gas prices in the Marcellus Shale would rise relative to the national benchmark price in Louisiana known as the Henry Hub, the people familiar with the matter said.”

The quarter was the worst ever for the bank’s commodities unit, which, as WSJ notes, has been one of the firm’s most consistent profit centers, and a training ground for many of its top executives, including Chief Executive Lloyd Blankfein. The trading loss “extended a broader slump at a company once known as Wall Street’s savviest gambler.”

Goldman shares fell 2.6% on the day of the report, which analysts largely attributed to the miss in trading revenues, despite a stronger-than-expected bottom-line profit.

The investment bank has held on to its commodities-trading business even as most other American banks exited following the financial crisis. It is currently the seventh-largest market maker for natural gas in North America, larger than some energy giants like Exxon Mobil. According to WSJ, trading oil, metals and other physical commodities is increasingly dominated by smaller firms like Glencore PLC and Gunvor Group Ltd. that don’t face as much government regulation.

“The loss highlights the trade-offs Goldman made in sticking with the risky commodities-trading business, even as other large banks retreated following the financial crisis. Goldman is the seventh-biggest marketer of natural gas in North America, up from 13th in 2011, according to Natural Gas Intelligence—bigger than U.S. energy giants such as Exxon Mobil Corp. and Chesapeake Energy Corp. It has been the only U.S. bank in the top 20 since 2013, when J.P. Morgan Chase & Co. left the business.”

WSJ explains that Goldman’s position would"ve produced a profit if a pipeline being built to carry natural gas out of the Midwest had been completed on time. Instead, it faced multiple delays after a series of fluid spills and the accidental bulldozing of a historic Ohio home.

“Essentially, it was a bet on the timely completion of pipelines under construction to ferry a glut of gas out of the region.

But one of those pipelines ran into trouble this spring: the 713-mile Rover, which would transport gas from the Marcellus to the Midwest and beyond.

Its developer, Energy Transfer Partners, in February bulldozed a historic Ohio home without notifying regulators, and scrambled to finish clearing trees before the roosting season for a protected bat species. In May, federal regulators barred Energy Transfer from drilling on some segments of the route after a series of fluid spills.

The first leg of the pipeline, which had been set to come online in July, isn’t expected until at least September. Energy Transfer said it has “been working efficiently and nonstop to remediate” problems and expects to have the entire pipeline operational in January.”

In all likelihood, part of Goldman’s short position was accumulated to offset the risk-management needs of the bank’s clients, WSJ reported. Goldman’s counterparties, the drillers operating in the Marcellus shale, reported strong gains in their derivatives books.

“Goldman was in part likely catering to gas producers in the region that wanted to lock in steadier revenue through swaps and other contracts. Many Marcellus drillers reported big gains in the value of their derivatives portfolios in the second quarter—meaning their trading partners lost money in that period, at least on paper.”

Of course, the bank’s executives would have you believe the loss was solely the result of Goldman fulfilling its duty to help its clients manage risk, and that the bank’s trades didn’t violate the Volcker Rule (a ban on proprietary trading that was part of Dodd-Frank). As WSJ notes, whether or not a trade violates the Volcker rule depends on who initiated it, how long the bank held the position, and myriad other factors.

But with President Trump in the White House and with future Fed Chairman Gary Cohn"s only nemesis getting the boot earlier today, soon Goldman will be empowered to take much more trading risks with the explicit blessings of 1600 Pennsylvania.

The World's Top 100 Companies: Revenue Versus Profits

Just over a month ago, Visual Capitalist published a very tidy data visualization that summed up the top 50 companies in the world by revenue, based on data from Forbes.

But, as Jeff Desjardins notes, just looking at revenue numbers doesn’t give a full picture on how these companies compare – and many investors care much more about a different performance metric: profit.

Roday’s data visualization from Ishtyaq Habib shows the top 100 biggest companies by market value, but uses circles to represent both the revenue and profit for each company. There’s also an interactive version of the same chart here as well, which highlights the specific numbers for each company highlighted.

APPLE = A MONEY-MAKING MACHINE

The first noticeable difference in this version?

It’s that Apple is unparalleled in its ability to make money. In fact, Apple’s 2016 profit of $45 billion is far bigger than any other company, including Berkshire Hathaway ($24 billion), JPMorgan Chase ($24 billion), Wells Fargo ($22 billion), Alphabet ($19 billion), Samsung ($19 billion), Toyota ($17 billion), Johnson & Johnson ($16 billion), or Walmart ($14 billion).

The only companies that can compare with Apple were Chinese banks like ICBC, Agricultural Bank of China, or China Construction Bank, but in many ways these state-owned enterprises are on an entirely different playing field, anyways.

Also impressive: Apple’s profits are bigger than the revenues of massive companies like Coca-Cola ($41.5 billion) or Facebook ($27.6 billion).

MARGINS, SCHMARGINS

Unfortunately, not every company can make a 21% profit margin on $217 billion of revenue like Apple.

Other organizations need to rely on razor-thin margins and volume to make things work. Walmart only brought in $14 billion of profit off of a whopping $485 billion of revenue – a margin of just 2.8%. Meanwhile, fast-growing Amazon was in a similar boat with margins of 1.7%, largely provided by its wildly successful AWS service.

Lastly, it is also worth noting that some on the list did not make a margin at all. These are mostly companies that are suffering from the challenges of down cycles in natural resources. Chevron and mining giant Glencore, for example, were two of the Top 100 Companies that both lost money in 2016, while BP essentially broke even.

WTI/RBOB Mixed After Biggest Crude Draw Since 2016, Production Hits 21-Month Highs

Oil prices have roller-coastered since last night"s API report of the biggest crude draw since September (hurricane-impacted), but kneejerked higher after DOE confirmed a big crude draw (though less than API), the largest since Dec 2016 and 8th weekly draw in a row. Distillates saw a surprise build, crude exports hit a record high, and production rose again to its highest since Aug 2015.

API

• Crude -8.67mm (-3mm exp) - biggest since Sept 2016


• Cushing -753k


• Gasoline -1.726mm (-1.5mm exp)


• Distillates +124k

DOE

• Crude -6.43mm (-3mm exp)


• Cushing -747k (-500k exp)


• Gasoline -2.86mm (-1.5mm exp)


• Distillates +394k (-700k exp)

8th weekly crude draw in a row and biggest since Dec 2016... surprise build in distillates

U.S. COMMERCIAL CRUDE STOCKS are drawing down much earlier and harder than normal for time of year pic.twitter.com/WRWVPPrYsU

— John Kemp (@JKempEnergy) June 1, 2017

Bloomberg"s Laura Blewitt notes that Today is June 1st -- an important day for Bakken crude. As of today, Energy Transfer"s controversial Dakota Access Pipeline is now in service, providing a key outlet for oil to the U.S. Gulf Coast.

Lower 48 production continues to rise... from 8.815mm to 8.835mm - highest in 21 months...

Rystad Energy says U.S. crude production will exceed 10 million barrels a day before year-end, echoing sentiment from other analysts.  

Crude exports hit a new record high...

Gasoline demand at its highest since the peak last summer - seasonally ahead...

It"s been a week since the OPEC extension deal and prices continue to hold lower... GLENCORE CEO SAYS OPEC HAS LOST MARKET CONTROL DUE TO SHALE - but prices were holding above API lows heading into the DOE print (ticking up into the data)= and bounced higher (though only marginally) on the data...

Close up...

"Recessionary" Demand Forces New York Harbor To Divert Gasoline Shipments

Two weeks ago, Goldman analysts were stunned when they noted that in recent weeks gasoline demand in the US has collapsed to levels that suggest not all is well with the economy. In fact, as the bank"s oil expert Damien Courvalin said "to achieve the 5.9% decline suggested by the weekly data, our model requires PCE to contract 6%, in other words, a recession."

 

Goldman then quickly changed the unpleasant narrative - one which would suggest that the US economy is in far worse shape than official data represent - and provided several alternative explanations why such a "sudden collapse is unlikely" and said that "we view the larger than seasonal ytd builds in US gasoline stocks as driven by transient supply factors rather than persistent demand issues."

Perhaps, but so far those "transient" supply factors are only getting more chronic, and as supply continues to grow in anticipation of a demand bounce that refuses to materialize, leading to ever louder speculation that there is something very wrong with the US consumer...

... gasoline inventories have hit record levels, and nowhere is this more obvious than on the East Coast, where as Bloomberg writes overnight, "the biggest gasoline market in the U.S. is bursting at the seams."

As a result, just like during last year"s unprecedented gasoline glut which, too, was supposed to be "transient", but has only gotten worse, traders are now lining up to export gasoline and diesel from New York Harbor, an area that normally relies on fuel imports from Europe and eastern Canada.

While at least 6 cargoes that were headed to New York from Europe in January and early February were diverted to the Caribbean or the U.S. Gulf Coast, that wasn’t enough to stem the oversupply building up in terminals along the Eastern Seaboard. Record-high inventories in the region are now pushing prices low enough to turn the typical trade flow on its head.

Gasoline supplies in PADD1, the Central Atlantic region of the East Coast, the delivery point for New York Mercantile Exchange futures contracts, rose to a record 42.3 million barrels last week. Imports of fuel to the entire East Coast averaged about 350,000 barrels a day in the first 11 months of 2016 while exports averaged 138,000 barrels, EIA data show. The chart below shows just how serious the East Coast inventory glut has become, and why New York harbor is no longer accepting gasoline shipments.

Total U.S. gasoline stocks also touched a record 259 million barrels, even as American refiners produce less fuel during the height of refinery maintenance season. U.S. crude unit outages are expected to average about 1 million barrels a day this month, and peaked last week at 1.29 million.

“We have been exporting out of the New York Harbor, but clearly not
enough, so that’s putting pressure on the products,” said Robert
Campbell, head of oil products research for Energy Aspects.

As demand fails to rebound, and as product keeps building, the only option is to either divert inbound cargoes or to export more. Both are taking place. According to Bloomberg data, at least two million barrels of clean products like gasoline and diesel are planned to be exported from New York Harbor and Philadelphia in coming days. BP Plc and Glencore Plc are among shippers sending fuels to West Africa and Europe as the U.S. East Coast saw its gasoline stockpiles break a fresh record high for the third consecutive week.

For the time being, there is virtually no hope that this unprecedented product glut will moderate because as the DOE reported last week, crude inventory also hit a new all time high.

While this clearly suggests that the OPEC supply cuts have done nothing to offset record inventories, and that contrary to OPEC pleas the oil market - which are now being boosted by a surge in US shale production which has found a price around $50/barrel to be quite profitable - is far from equilibrium, it also means that both oil and gasoline inventories will only continue to rise, because as refiners begin maintenance shutdowns, crude will accumulate at an even faster pace.

Which brings us to the real question: where is the demand?

While we don"t have an answer, we will remind readers that exactly the same situation in which New York Harbor was quietly moving gasoline inventories to other venues as a result of an inventory glut took place last year, and then - just like now - we asked the one question that nobody seems to want answered: why is demand so low? This is what we wrote last August.

Remember that pile up of tankers in NY harbor we wrote about a month ago? Well, they"re gone. But not because there is demand for their product - they simply found a different place where to store their excess inventory: gasoline has shifted south amid cargo diversions and deviations. A 330,000-barrel tanker usually on the Houston-to-Jacksonville, Florida, run last month moved two products cargoes to Florida from New York Harbor, according to vessel tracking data compiled by Bloomberg. Since June, at least eight foreign import cargoes originally booked to supply New York were sent instead to the U.S. Gulf Coast and Mexican West Coast.

And just like that, the DOE gets to report a gasoline draw, even though neither supply, nor demand has changed, but was merely a cargo that disappeared from the books as it moved from point A to point B.

Sadly, the problem remains as there is no excess demand for gasoline at either Point A or Point B.  Which means that the bullish catalyst that sent oil surging this week on a modest decline in gasoline, will promptly reverse itself as the tanker glut returns, at either of America"s numerous ports.

As PKVerleger summarized, “The situation is extraordinary,” and indeed it is, as industry players resort to every last trick in the book to feign incremental demand for either gasoline or oil, when none exists.

And since like in 2016, it all comes down to demand, we wonder at what point will Goldman admit that its "transient factors" explanation is meaningless, and admit that the consumer "recession" it first flagged earlier this month, is the most likely explanation.