A roundup of what The Globe and Mail's market strategist Scott Barlow is reading this morning on the World Wide Web.
The oil price has been defying the straightforward laws of supply and demand; when there's too much of something, and production continues to increase, the price is supposed to go down.
For independent research firm Energy Intelligence, the current state of U.S. crude inventories and oil production makes further declines in the commodity price "inevitable."
"The strong incentive to build stocks could well hold crude oil prices fairly steady for some weeks, but as lower-cost storage options fill up, traders and oil companies will need to tap higher-cost storage in order to keep buying up surplus barrels. Sellers will then need to lower prices enough to make those storage plays viable, pushing spot crude oil prices inevitably lower."
A Bloomberg report on the same topic points directly at the shortage of available oil storage in Oklahoma.
"If oil supplies do overwhelm the ability to store them, the U.S. will likely cut back on imports and finally slow down the pace of its own production, since there won't be anywhere to put excess supply. Prices could also fall, perhaps by a lot ."
"More oil price weakness looks inevitable" – Energy Intelligence
"The U.S. has too much oil and nowhere to put it" – Bloomberg
Ambrose Evans-Pritchard, financial columnist at the U.K.'s Telegraph, has climbed to prominence with a combination of usefulness and hyperbole that is very much evident in his most recent missive, "Global finance faces $9-trillion stress test as dollar soars." Mr. Evans Pritchard points out that global corporations, notably in Asia, have borrowed hundreds of billions in U.S. currency with expectations that the greenback would continue to weaken, and the debt would be easier to repay. The strengthening dollar threatens to cause huge losses for these companies.
"The ominous implications are already visible as the dollar rises at a parabolic rate, smashing the Brazilian real, the Turkish lira, the South African rand and the Malaysian Ringitt, and driving the euro to a 12-year low of $1.06… [Stephen Jen, a former IMF official] said Asian and Latin American companies are frantically trying to hedge their dollar debts on the derivatives markets, which drives the dollar even higher and feeds a vicious circle. 'This is how avalanches start,' he said."
"Global finance faces $9-trillion stress test as dollar soars." – Evans-Pritchard, Telegraph
Report on Business news editor Mike "Hardest working man in the business" Babad highlights an RBC research report projecting that Ontario will retake the country's economic leadership in 2015.
"Ontario, Canada's manufacturing heartland, is projected to lead the provinces this year is economic growth, Royal Bank of Canada said, while Alberta, the heart of the oil patch, will see tougher times.
Ontario hasn't led the country in 15 years, RBC said, forecasting economic growth of 3.3 per cent this year and 2.7 per cent in 2016."
"Ontario to see economic milestone, Alberta poised for 'anaemic pace'" – Babad, Report on Business
HSBC has been fined for its role in allowing clients to put their hands in the global tax-dodging cookie jar, as but FT Alphaville's Matthew Klein reports, there is still a lot of money being hidden from tax collection worldwide.
"There are trillions of dollars more financial liabilities in the world than there are corresponding financial assets. That only makes sense if people are hiding their wealth from the authorities. And, as it happens, the places we identified as having particularly large hidden capital outflows – Sweden, Denmark, Finland, Italy, the Netherlands, and Austria – all have very high taxes."
"The mystery of the missing money, part 2" – Klein, FT Alphaville
Tweet of the Day: "@GestaltU_BPG And so endeth the 1st epoch of wealth management https://twitter.com/awealthofcs/status/575744062860345344/photo/1
Diversion: "If you're still not terrified about antibiotic-resistant superbugs, watch this documentary" – Vox
Follow Scott Barlow on Twitter @SBarlow_ROB