Greetings,

We begin with a few developments in the energy markets.

1. The US energy & mining investment growth has declined sharply. While this is bullish for oil in the medium term, there is no shortage of capital waiting on the sidelines that will be quickly redeployed should prices rise further.

Source: Macquarie

2. US oil rig count didn’t decline last week – is it stabilizing?

Source: @SoberLook

3. Weak energy prices have taken their toll on North Dakota’s economy.

4. Seeing oil prices stabilize, Iran is in no hurry to “freeze” production – as hard currency begins to flow in.

Source: ?Reuters

Source: ?@JavierBlas2, @IEA

5. As discussed on Friday, with crude oil contango declining sharply in recent weeks, storage (cash & carry) is no longer profitable. Nevertheless, floating cargo continues to increase. The physical crude supplies remain bloated, and they will hit the spot market at some point. 

Source: ?@MarathonWealth, Reuters

In other commodities markets, gold speculative net long exposure remains highly elevated. Gold is vulnerable to a sharp correction, especially if the Fed becomes more aggressive in raising rates.

Moreover, demand for gold seems to be coming from the paper markets rather than the physical markets

Source: Macquarie

US soy meal futures spike, following soy futures markets in China. This is driven by the demand for pig feed in China, where pork prices remain elevated. Speculative activity, both in China and the US, is also helping to drive this commodity higher.

Source: @barchart

1. Turing to emerging markets, Nigeria’s GDP growth falls to a 25-year low as the nation’s oil dependence becomes more apparent.

2. Abu Dhabi shares experience the worst decline since last October as investors once again leave the Gulf markets. The strengthening US dollar is not helping.

Source: Bloomberg.com

3. It’s painful to watch the “wag the dog” situation developing in Venezuela.

Source: Bloomberg.com

4. As discussed before, the strengthening US dollar renews concerns of accelerating capital outflows from China. While China’s officials keep talking about the yuan being “linked” to a currency basket, the market is primarily focused on USD/CNY. Should this currency pair strengthen further, market jitters could return.