Light at the end of the tunnel and its not a train!!!

The Fed said yesterday that strains in global financial markets have eased and the labor market is gathering strength. In a separate statement, the U.S. central bank said 15 of the nation’s largest 19 banks could maintain adequate capital levels even in a recession scenario. Data later today may show Indian wholesale prices rose 6.7 percent last month, near the slowest pace in two years, based on economists surveyed by Bloomberg
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“It is just a continued pattern of relatively strong U.S. economic data,” said Shane Oliver, Sydney-based head of investment strategy at AMP Capital Investors Ltd., which oversees about $100 billion. “Overall it’s fairly a positive sign for the U.S. financial sector, banks in particular. It shows how much things have turned around from the situation three years ago.”

it’s going to be a good year! :-)

The MSCI Asia Pacific Index rallied 0.8 percent as of 11:12 a.m. in Tokyo, climbing for the third time in four days. Futures on the Standard & Poor’s 500 Index added 0.2 percent. The yen weakened 0.2 percent to 108.44 per euro and New Zealand’s dollar appreciated 0.4 percent to 82.16 U.S. cents. Oil traded near the lowest level in a week in New York.

U.S. retail sales rose 1.1 percent in February, the most in five months, according to economists surveyed by Bloomberg, reducing the likelihood the Federal Reserve will add to stimulus measures today. The Bank of Japan is also forecast to keep policy unchanged today. European Union Economic and Monetary Affairs Commissioner Olli Rehn said he was confident EU leaders would reach an agreement on increasing the size of its crisis- fighting funds this month.

“We’re starting to feel more confident and it’s going to be a good year, particularly in equities,” Kirk West, Sydney- based executive director of international investments at Principal Global Investors, manager of about $215 billion in assets, said in a Bloomberg TV interview. “‘In the U.S., it’s all about jobs. Jobs growth has continued and will ultimately lead to further consumption and that’s a virtuous cycle.”

Weaker Yuan = cheaper stuff for USA-EU = lower inflation = growth (or something like that)

China’s economic growth slowed in the first two months of the year, with both exports and domestic demand moderating faster than analysts had forecast, building the case for Premier Wen Jiabao to accelerate stimulus measures.

The world’s second-largest economy had the biggest trade deficit last month in at least 22 years, the weakest January- February factory-production gain since 2009 and retail sales below the median economist estimate, government data showed March 9 and 10.

Central bank Governor Zhou Xiaochuan said today that the nation has large scope in theory for lowering banks’ reserve requirements, and the yuan tumbled after officials weakened the reference rate. Moderating inflation and Europe’s faltering export demand may encourage the government to loosen credit and pause on currency gains, with the yuan down 0.5 percent this year against the dollar after climbing 4.5 percent in 2011.
“We are likely to see another cut sometime soon” in the required-reserves ratio, Brian Jackson, a Hong Kong-based economist with Royal Bank of Canada, said in a Bloomberg Television interview. “If you look at the January and February numbers combined, whether it’s trade, whether it’s industrial production, it all shows a pretty clear picture of things continuing to slow down since the start of the year.”

The yuan fell 0.2 percent to 6.3239 as of 12:11 p.m. in Shanghai, the biggest decline since Jan. 20, after the central bank weakened the daily reference rate by the most since August 2010. The MSCI Asia Pacific index of stocks fell 0.6 percent as of 2:20 p.m. in Tokyo.

Asian Dragon Market breaks loose!

Asian stocks entered a dragon (kinda like a bull) market yesterday after central-bank easing from the U.S. and Europe to China and Japan fueled the fastest rally in more than two years.

The BULL runs...

The S&P 500 is on pace for a third month of gains, the longest streak in a year, amid better-than-estimated economic and corporate reports. It has risen 4.2 percent this month. The index trades at about 14.1 times reported earnings, compared with the average since 1954 of 16.4 times, according to data compiled by Bloomberg.

‘Powerful Recovery’

“The powerful recovery in earnings thus far has allowed market averages to rise without pushing the P/E higher,” David Joy, the Boston-based chief market strategist at Ameriprise Financial Inc., said in a Feb. 21 e-mail. His firm oversees $600 billion. “Many investors are either not convinced that this price rally and earnings recovery are for real, or they simply do not care, having been burned too badly in the downturn.”

U.S. gross domestic product expanded an average 2.4 percent a quarter in the 2 1/2 years since the recession ended in 2009, data compiled by Bloomberg show. The world’s largest economy hasn’t had a smaller post-recession recovery rate since at least the 1940s, the data show. In the 2003 bull market, GDP rose 2.7 percent on average, before the S&P 500 surged 102 percent. For the 1982 rally, the rate was 5.7 percent. Equities more than tripled in that cycle.

Iran: The wild card for Global Recovery

In case the European Debt crisis after the political crisis that ran/runs through Europe and the Middle East was not exhausting enough to say how about a little good olde economic recovery for the world ==> a bull market.

Then comes along Iran, not to say other nations like North Korea, & Pakistan are not troubling but one more nuclear kid on the block is more than we need now or in the future. 

Yes, we want Iran open.  We want and need Iranian oil.  And guess what the dictator you kicked out -- the shah -- has turned out to be less a prick than the idiots you have been left with....which all could be an Iranian issue but for ... oil and nukes....and little spoken of but more easily produced and deployed biological and chemical agents.  How about a deployment in a tube or subway?  Maybe a mega mall or how about on board a transatlantic flight.

We need need a regime change in Iran for Iranians and too get the really stupid possibilities off the World table.

Reports that Iran is cooperating with al-Qaeda on plans for a “spectacular” attack on the West have to be taken seriously, particularly in light of the attempted assassinations of Israeli diplomats last week and the revelation last year that al-Qaeda had begun using Iran as a transit point to its bases in Pakistan and Afghanistan. Iran could be helping al-Qaeda in very specific ways to plan the kind of high-profile attack that would allow it to once again assert itself as a serious threat to security in the world.

Isn't it amazing what a country that saves and produces can do to stimulate its economy and the world => China (who btw didn't bring us the sub-prime crisis...)

European equity futures climbed, the euro advanced to a two-month high against the yen and commodities rallied as China said it will help Europe resolve the debt crisis. 

Asian stocks jumped the most in four weeks.

Euro Stoxx 50 Index futures added 0.8 percent as of 7:02 a.m. in London. The MSCI Asia Pacific Index (MXAP) advanced 1.8 percent and Standard & Poor’s 500 Index futures added 0.5 percent. German 10-year bund yields rose two basis points to 1.92 percent. The euro climbed 0.4 percent against the yen. Copper snapped a three-day losing streak, rising 0.7 percent. Oil increased 0.8 percent to $101.56 a barrel.
China, which holds the world’s largest currency reserves, can provide help through avenues including the central bank and its sovereign wealth fund, said People’s Bank of China Governor Zhou Xiaochuan. The nation is willing to get “more deeply” involved in helping Europe deal with its debt crisis, Premier Wen Jiabao said yesterday. The leaders of Greece’s two biggest political parties will provide written commitments to budget cuts, according to a government official in Athens.

“China could make Europe’s problems go away,” said Peter Jolly, head of market research at National Australia Bank Ltd. in Sydney. “They have the funds. To the extent that China will participate in the European solution, it takes away some of the flight to quality in Treasuries.”

20 Percent Rebound = Golden Cross!!!! Yippie I Oh!!!

The S&P 500 has jumped almost 20 percent from its 2011 low in October amid optimism that the U.S. economy will withstand Europe’s debt crisis. The index’s 50-day moving average is 0.2 percent away from exceeding the average price for the prior 200 days. 

The formation, known as a “golden cross,” will occur for the first time since 2010 and is historically a signal that more gains are likely to follow, Birinyi Associates Inc. said. 

The S&P 500 climbed to its highest level since July on Jan. 25 after the Fed extended its commitment to keep interest rates low through at least late 2014 and Chairman Ben S. Bernanke signaled that central bankers haven’t ruled out additional asset purchases.

Commodities and Financials = 2012 investing (don't forget real estate)

Precious metals will advance 27 percent or more, industrial metals at least 17 percent and grains 5 percent, according to the median estimates in a Bloomberg survey of 143 analysts, traders and investors. Nine of the 15 commodities covered by a similar survey a year earlier reached their predicted highs in 2011, with another five no more than 4 percent away.


The six largest lenders, including JPMorgan Chase & Co. (JPM), Bank of America Corp. (BAC) and Goldman Sachs Group Inc. (GS), may post an average profit increase of 57 percent this year, according to 184 analysts’ estimates compiled by Bloomberg.

Euro must survive or the USA fails then China fails and so forth.....but its still fun to trade around!!!

Refined-copper imports by China climbed to the highest since June 2009 last month, the General Administration of Customs said Dec. 21. Global oil demand will rise 1.4 percent next year, with China accounting for more than a 10th of the total, according to the Paris-based International Energy Agency.

Rent a supertanker or a fun nite at the Burj Al-Arab = cost about the same day rate...

Owners of supertankers, losing money for a sixth consecutive quarter, will probably idle the most ships in more than two decades as they contend with a glut that drove charter rates to the lowest in at least 14 years.

The combination of too many ships and slowing demand growth for oil means that about 6 percent of the fleet will be anchored in a year from almost none now, according to the median in a Bloomberg survey of eight brokers and analysts. That may not be enough to end the slump. Forward freight agreements, traded by brokers and used to bet on transport costs, anticipate rates no higher than $13,819 a day through 2013.


Frontline Ltd., the biggest operator of the vessels, says it needs $29,800 to break even. The Hamilton, Bermuda-based company will report its biggest annual loss in 12 years in 2011, analysts’ estimates compiled by Bloomberg show. While owners can cut operating costs to as little as $2,000 a day from $12,000 by anchoring ships, it also means no income, said Andreas Sohmen- Pao, chief executive officer of the oil and gas shipping unit of BW Group Ltd., which is idling three vessels.

“When it’s this bad, eventually it wears people down a bit and some do get out of the market,” said Martin Stopford, the London-based managing director of Clarkson Research Services Ltd., a unit of the world’s biggest shipbroker. “To lay the ship up, you would eventually have to totally lose confidence in the market improving for some time.”

Off to the races!!!

Standard & Poor’s 500 Index futures gained and commodities climbed a fourth day after German and French leaders pledged to devise a plan to stem Europe’s debt crisis in three weeks and as the U.S. showed signs of sustaining its economic recovery.



Europe’s 17-nation currency advanced 0.6 percent against both the dollar and yen as of 12:26 p.m. in Hong Kong. S&P 500 futures added 1 percent, while the MSCI Asia Pacific excluding Japan Index swung between gains and losses, following a three- day, 7.9 percent jump that was the most since 2009. S&P’s GSCI Index of raw materials advanced 0.4 percent, paced by oil, wheat and silver. Bond default risk declined.


German Chancellor Angela Merkel and French President Nicolas Sarkozy will deliver a plan to recapitalize European banks and address the Greek debt crisis by the Nov. 3 Group of 20 summit. Belgium will buy part of failing Dexia SA and provide security for depositors. Goldman Sachs Group Inc. and Macroeconomic Advisers LLC raised their U.S. growth forecasts in the third quarter, after an Oct. 7 report showing a 103,000 rise in payrolls capped a string of stronger-than-projected data.


“The market was met with some above-expectations data, as well as some warm and fuzzy talk out of the EU about the banking sector, so ultimately the rally will likely continue” for the next few weeks, Nick Maroutsos, who oversees the equivalent of about $4 billion at Sydney-based Kapstream Capital, said in a Bloomberg Television interview

What a ride!!!

Global stocks fell to a 15-month low on Tuesday, pinning Asian stocks near a 16-month low, as investors shed riskier assets on growing doubts over Greece's ability to avoid default, fuelling fears of global financial turmoil and recession.



Fears over the banking sector's exposure to euro zone sovereign debt and plummeting value of assets across the board further led to a sharp widening of credit default swaps.

Weakening outlook for industrial demand weighed on copper and oil while flight-to-safety strengthened gold, yen and the dollar.

"Investors are cutting their exposure to risk as the most extreme risks -- such as Greek default -- are looming closer than they expected," said Jung Sang-jin, a senior fund manager at Dongbu Asset Management.


MSCI's broadest index of Asia Pacific shares outside Japan .MIAPJ0000PUS fell 1.58 percent, hovering near a 16-month low hit in late September. It fell about 3.6 percent on Monday.

The MSCI All-Country World index .MIWD00000PUS fell 0.52 percent to its lowest level since July 2010, adding to declines on Monday when bank shares were battered, with Franco-Belgian financial group Dexia (DEXI.BR) calling an emergency board meeting after concerns about its exposure to Greece.


Japan's Nikkei markets/index?symbol=jp%21n225">.N225 fell to a 6- month low as a sell-off in commodities pushed trading houses lower and the Greek woes pressured the financial sector.

"We could be in for a shakeout even larger than the Lehman shock," said Hideki Amikura, forex manager at Nomura Trust Bank.

The massive selling pressures prompted some authorities to step in to help restore some order.


The Korea Exchange temporarily suspended programme sales on the main Korea Composite Stock Price Index finance/markets/index?symbol=kr%21kspi">.KS11 in early trade on Tuesday due to drastic falls in futures as the broader market tumbled more than 5 percent.


Taiwan state funds were seen stepping in local market to prop up heavyweights such as Taiwan Semiconductor Manufacturing Co (2330.TW), the world's top contract chipmaker, helping the market erase earlier losses to trade flat.

Bigger than QE2 = The Twister

Prices on 30-year Treasury bonds have soared on the announcement of Operation Twist, at times driving yields below 3% for the first time since January 2009. The yield, which moves in the opposite direction to price, has fallen 0.21 percentage point since the day before the program was announced Sept. 21. Ten-year notes also have surged. Yields on both Treasury securities have moved off their recent lows.


Here is how the program works: The Fed will buy $400 billion of longer-term Treasurys—those maturing in six to 30 years—and in turn will sell $400 billion of Treasurys that mature in three months to three years.

Essentially, the Fed is sucking up bonds that have the most risk tied to interest-rate fluctuations. By doing that, the Fed shrinks the supply of those investments available to private investors, which raises the price.

But investors still need bonds with similar interest-rate risk, known as duration, in part because many of them have set duration targets within their investment portfolios.

Barclays Capital and other bond observers measure the impact of the Fed's buying through a concept known as 10-year equivalents, or the amount of 10-year notes an investor would have to buy to get the same amount of interest-rate risk.

In those terms, Operation Twist looks similar to, or a little bigger than, QE2.

Thank God or Mao for China!!

China’s record imports and a rebound in lending signaled strength in demand that offers a bright spot in a global economy contending with Europe’s debt crisis and weakening U.S. job gains.

Shipments from abroad jumped 30 percent and new local- currency loans were a more-than-forecast 548.5 billion yuan ($86 billion), government reports in the past two days showed. At the same time, August figures released Sept. 9 indicated that policy makers have made progress in stemming inflation, which eased from a three year high, to a 6.2 percent year-on-year pace.

The data may bolster confidence that the world’s second- largest economy is weathering both Premier Wen Jiabao’s campaign to defuse price pressures and financial turmoil abroad. Group of Seven finance chiefs vowed “a concerted effort” to support expansion on Sept. 9 as Europe’s debt woes and zero jobs growth in the U.S. increase the risks of a renewed recession.

“This all points to a robust economy, and a hard landing looks an increasingly distant scenario,” said Liu Li-gang, a Hong Kong-based economist with Australia & New Zealand Banking Group Ltd. who previously worked for the World Bank. “China is less reliant on external demand and more dependent on investment and consumption, so the deteriorating global outlook will have less of an impact than during the previous financial crisis.”

A New "and Imporved" Deal for America

On the Eve of the President's Speech on Jobs for America let's consider the costs of the previous Administration (that was George.W.) ... $1.2 Trillion on Wars, $2.5 Trillion on Banks and Oil rising from $25 a barrel to $90 Barrel (or per gallon running from $1.8 to $3.8)!!!

With enactment of the sixth FY2011 Continuing Resolution through March 18, 2011, (H.J.Res.48/P.L. 112-6) Congress has approved a total of $1.283 trillion for military operations, base security, reconstruction, foreign aid, embassy costs, and veterans’ health care for the three operations initiated since the 9/11 attacks: Operation Enduring Freedom (OEF) Afghanistan and other counter terror operations; Operation Noble Eagle (ONE), providing enhanced security at military bases; and Operation Iraqi Freedom (OIF). This estimate assumes that the current CR level continues through the rest of the year and that agencies allocate reductions proportionately.

Subprime bailout $2.5 trillion. Don’t consider reputation damage to the USA and of course the S&P downgrade increasing America’s borrowing cost.

Now let’s consider what is rumoured to be President Obama’s big spending plan on creating jobs for Americans…..$300 billion. Hardly a reckless proposal…and guess what it creates jobs in America v fighting wars overseas that never needed to be fought… what a concept! It’s almost like he’s acting like someone who was elected to serve the public interest.

From the end of World War II through the mid 1970s, the real wages of American workers nearly doubled, moving up in tandem with the growth in productivity. The United States benefited from an implicit social contract: By working hard and contributing to productivity, profits, and economic growth, workers and their families could expect improved living standards, greater job security, and a secure and dignified retirement. This social contract broke down after 1980, as employees lost their bargaining power. Since then, productivity has grown more than 70 percent while real compensation of nonmanagerial workers has remained flat. Wages for the lowest-paid workers have collapsed even more than for average workers.

The postwar social contract was grounded in New Deal legislation that established a minimum wage, other wage and hour regulations, and labor laws that allowed workers to build the bargaining power needed to enforce wage-determination norms and principles in negotiating with large corporations. The undermining of this system of regulations, and of union bargaining power, accounts for significant portions of the wage lag.

Despite the convention of a poverty “line,” the working poor and the near-poor have much in common. After periodically raising the minimum wage from 1938 through the 1960s as prices rose, Congress and several presidents have allowed the real value of the minimum wage to fall about 25 percent since the late 1960s.

The system of collective bargaining that grew out of the New Deal’s National Labor Relations Act and the influence of the War Labor Board during World War II likewise get insufficient credit for their role in creating and sustaining the link between productivity and wages. The War Labor Board used wage comparisons to instill the principle of “equal pay for equal work” within industries and occupations. It encouraged negotiations for health insurance, pensions, and other benefits that eventually became sine qua non for a “good job.” By the mid-1970s, union members were about 20 percent more likely to be covered by these benefits than nonunion workers.

In the late 1940s, the United Auto Workers and General Motors negotiated contracts that explicitly linked wage increases to productivity growth (the “annual improvement factor”) and to increases in the cost of living. These private-sector wage norms reinforced the underlying social contract. From the mid-1940s through the 1970s, unions led the process of improving wages by producing union wage premiums ranging from 10 percent to 25 percent, with the biggest effects for less-skilled jobs and less-educated workers. Union-negotiated wages and benefits spilled over to affect nonunion workers and managers across the economy.

Unions have declined for several mutually reinforcing reasons: deregulation, industrial change, globalization, and increased employer resistance (often abetted by lax government enforcement of the right to organize). As the union percent of the workforce declined, first slowly in the 1970s and then precipitously after 1980, so, too, did their ability to enforce the social contract and to bargain for the wages and benefits that rose with productivity. The union wage premium has diminished, and unions have had to fight defensive battles to slow the decline in health care and pension coverage, and to shift the costs and risks of these benefit plans from employers to workers.

The weakening of unions leaves more power in the hands of corporations to determine wages. Three aspects of corporate strategies and policies have particularly affected lower-wage workers.

First, corporations that previously paid relatively high wages for all employees because of either the presence or the threat of unions began to narrow their focus to their “core competencies,” outsourcing noncore work that could be purchased at lower wages. This started with outsourcing janitorial and clerical work and then advanced to production, information technology, and other professional services. By outsourcing or offshoring some of this work, companies not only lowered their wage bill; they also further reduced the bargaining power of the workers who feared their jobs might be the next to go.

Second, internal equity norms broke down. Instead of maintaining consistent differentials between top-level executives and other managers and employees, compensation experts began differentiating between top executives, other high talented employees, and everyone else in the firm. Wages of top executives soared to as high as 400-to-1, a differential that would have been unthinkable when unions were stronger.

Third, intensified price competition was experienced in deregulated industries like airlines and trucking, manufacturing industries exposed to global competition, and even domestic industries where large firms such as Wal-Mart dominate. All these factors exerted significant downward pressure on wages. The opening of a Wal-Mart store reduces the wages of retail workers in the area by about 3 percent. A few years ago, food retailers in southern California took a four month strike to cut their fringe-benefit costs in anticipation of a new Wal-Mart in their region. Since 2000, major airlines have responded to the entry of newer, lower-cost competition by cutting $15 billion out of workers’ paychecks, not counting the additional financial losses to be endured by employees whose pensions were terminated and turned over to the government.

From the end of the recession in 1991, it took five years of declining unemployment before wages of lower-level employees began to grow. This ended with the recession that followed the dot-com bust. It has taken four years into the latest recovery before lower- and average-wage workers have started to see modest improvements in real wages. Given the Federal Reserve’s focus on inflation targeting and the unpredictability of world events, it’s likely that economic downturns will be as much a part of the future as they have been a part of the past.

Steady progress requires engaging government, business, and labor efforts to build a new social contract tailored to today’s economy and workforce. The greater instability of today’s job market requires more social protections, not fewer. As in the 1930s, government can take the first step by restoring a floor on minimum wages and family incomes.

A resurgence in unions is also essential, and not just in the model of the 1930s. Unions will need to draw on new sources of power—as some are doing by building coalitions with other community groups advocating for worker’s rights and living wages; negotiating for training, development funds, and job ladders (as is happening in some parts of the health-care and hospitality industries); and building networks that provide benefits, job referrals, and wage information to workers and contractors not attached to a single firm (as is being done by a new media workers’ union in New York).

Unions need to continue to lead the way in building productive labor-management partnerships that create value and then share the gains, as they have done over the years with progressive employers in health care, communications, manufacturing, utilities, and other industries. As was the case in the ‘30s, labor law needs to be fixed and updated so that it will once again protect workers’ right to organize, and so that it can open the way for these innovative strategies to spread across the economy.

Finally, building a new and sustainable social contract requires American firms to adopt strategies capable of generating good profits while also sustaining good jobs at fair wages and meeting labor and employment-law standards. This will require a government strategy and a set of policy initiatives as bold and creative as the New Deal, using both carrots and sticks. Tax incentives for research and development and human-capital investments, government contracts, and all other public supports should be made contingent on firms complying with labor laws. At the heart of a new social contract that fights poverty and raises wages is a national strategy to reconnect rising productivity, rising wages, and norms of fairness inside the corporation.

For US Corporations: Part of USA hegemony in the world is that we are the market of choice. We will not be that if purchasing power drops and our cities crumble.

For Employees: Twitter…organize..wake up from the bag of corn chips and fight.

For Government: Last I looked people voted you in not PACs, Super-PAC or Steroid PACs… how about a government of and for the people?

Price risks skewed heavily to the upside

On a short-term basis, the U.S. market looks oversold and could bounce later this week, but the thing that has my attention is oil!

OPEC data shows demand for its crude will rise by 2.1 million barrels/day (mmb/d) in the third quarter from the group’s total output in April of 28.8 mmb/d, Naimi said. “Saudi Arabia is committed to supplying the needs of the market regardless of the disagreement,” he said.

The 11 nations with production quotas pumped 26.15 mmb/d in April, according to the IEA. That leaves the group with about 4.5 mmb/d of spare capacity, most of it in Saudi Arabia, to be tapped in an emergency.

The 50-year-old organization met as fighting in Libya shut off most of the output from Africa’s third-largest producer. A rebellion against Libyan leader Muammar Qaddafi has cut shipments from the North African country by almost 90 percent, according to Bloomberg estimates.

The lack of Libyan oil production is concerning. Estimates of current shut in production vary from a low of 500,000 b/d to a high of 1.5 million, from a total production of 1.6 mmb/d. Company withdrawal of expatriate production workers appears to be a major contributing cause of the production decline, not damage to producing fields. Libya is a small producer; however its oil is highly prized in the Mediterranean basin by Italian, French, and other regional buyers, as well as in northwest Europe for use by heavy, sour-based refiners as a blending crude.

To date, OPEC crude production remains around 1.3 mmb/d below where it was before the Libyan crisis broke out. Political and military stalemate there leads me to assume Libyan supply will remain absent from the market for the rest of 2011.

Production from Yemen too is now significantly curtailed by political unrest.

OECD stocks are on a trajectory to descend through the trailing 5 year average.

The good news!!! Iraq's current output is about 2.7 million to 2.8 mmb/d and expected to reach 3 mmb/d by end 2011 and 4 mmb/d by end 2012. Iraq's oil exports in May averaged 2.225 mmb/d.

"Export terminals and pipelines will not be the obstacle," Shahristani, who is responsible for Iraq's energy affairs, told reporters during a visit to southern oilfields and export facilities.
Iraq is rebuilding its oil infrastructure after years of conflict and has signed deals with oil majors to reach a proposed production capacity of 12 mmb/d by 2017. Most analysts see 6-7 mmb/d as more realistic.

I see lots up upside in oil prices, if supply is not brought back on stocks will deplete to worrying levels and that could excessively hamper global growth as oil prices exceed pre-crash levels.

Stock pick of the day: COG