Today we had 1 kilobar transaction as 46 kilobars left the comex vaults.

 we had 1 customer deposit(s):

total customer deposits; 17,842.39 oz  oz

To calculate the initial total number of gold ounces standing for the DECEMBER. contract month, we take the total number of notices filed so far for the month (4938) x 100 oz or 493,800 oz, to which we add the difference between the open interest for the front month of DEC (12,551 contracts) minus the number of notices served upon today (4938) x 100 oz per contract equals 1,255,100 oz, the number of ounces standing in this non  active month of DECEMBER.

The gold comex is an absolute fraud.  The use of kilobars and exact weights makes the data totally absurd and fraudulent! To me, the only thing that makes sense is the fact that “kilobars: are entries of hypothecated gold sent to other jurisdictions so that they will not be short with their underwritten derivatives in that jurisdiction.  This would be similar to the rehypothecated gold used by Jon Corzine at MF Global.

 END

Silver	Ounces
Withdrawals from Dealers Inventory	nil
Withdrawals from Customer Inventory	40,478.100 oz Scotia
Deposits to the Dealer Inventory	nil  OZ
Deposits to the Customer Inventory	126,494.810 oz brinks
No of oz served today (contracts)	717 CONTRACT(S) (3,585,000 OZ)
No of oz to be served (notices)	2339 contracts (11,695,000  oz)
Total monthly oz silver served (contracts)	717 contracts (3,585,000 oz)
Total accumulative withdrawal of silver from the Dealers inventory this month	NIL oz
Total accumulative withdrawal  of silver from the Customer inventory this month	40,478.100 oz

we had 1 customer withdrawal(s):

i) Out of Scotia: 40,478.100 oz

The total open interest on silver is NOW moving away from  its all time high with the record of 224,540 being set AUGUST 3.2016.

NOV 30/NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 346.150 MILLION OZ

Nov 29/no changes in silver inventory /inventory rests tonight at 346.150 million oz/

Nov 28/no change in silver inventory/inventory rests tonight at 346.150 million oz/

Nov 25/we had another withdrawal of 949,000 oz from the SLV/Inventory rests at 346.150 million oz

Nov 23/A HUGE WITHDRAWAL OF 3.083 MILLION OZ FROM THE SLV/INVENTORY RESTS AT 347.099 MILLION OZ

NOV 22/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 350.182 MILLION OZ

Nov 21/a MASSIVE 6.071 MILLION OZ OF SILVER WITHDRAWN FROM THE SLV VAULTS/INVENTORY RESTS AT 350.182 MILLION OZ/AND SILVER HOLDS IN PRICE???

Nov 18/no changes in silver inventory at the SLV/Inventory rests at 356/253 million oz

Nov 17/NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 356.253 MILLION OZ/

Nov 16.no change in silver inventory at the SLV/Inventory rests at 356.253 million oz/

NOV 15/a withdrawal of 474,000 oz (.474 million oz) from the SLV inventory/inventory rests at 356.253

Nov 14/a withdrawal of 1.329 million oz from the SLV/Inventory rests at 356.727 million oz

Nov 11/a withdrawal of 1.379 million oz from the SLV/Inventory rests at 358.056 million oz

Nov 10/an addition of 949,000 oz added into the SLV/Inventory rests at 359.435 million oz

Nov 9/no change in silver inventory at the SLV/Inventory rests at 359.435 million oz/

Nov 8/no changes in silver inventory at the SLV/inventory rests at 358.435 million oz

Nov 7/no changes in silver inventory at the SLV/Inventory rests at 358.435 million oz

Nov 4/NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 358.435 MILLION OZ

NOV 3/ a huge withdrawal of 2.807 million oz leaves the SLV: somebody was badly in need of silver/inventory rests at 358.435 million oz

NOV 2/ A DEPOSIT OF 569,000 OZ INTO THE SLV/INVENTORY RESTS AT 361.242

Nov 1/no change in silver inventory at the SLV/inventory rests at 360.673 million oz/

Oct 31/no change in silver inventory at the SLV/Inventory rests at 360.673 million oz/

Oct 28/NO CHANGE IN SILVER INVENTORY AT THE SLV/iNVENTORY RESTS AT 360.673 MILLION OZ

OCT 27/A MONSTROUS WITHDRAWAL OF 5.987 MILLION OZ FROM THE SLV/INVENTORY RESTS AT 360.673 MILLION OZ  (AND YET NO CHANGE IN THE SILVER PRICE???)

.

Nov 30.2016: Inventory 346.150 million oz

 end

NPV for Sprott and Central Fund of Canada

END

amount leaving: 0

Amount repatriated:  zero

Germany must be royally angry!

(HARVEY)

end

 

 

END

 

John Embry claims correctly that central banks were ready to smash gold as soon as Trump’s election victory was in the bag:

European, Asian stocks rise as do S&P futures as OPEC ministers gathering in Vienna appeared to be set to announce a deal to cut oil production and prop up global prices. Oil has surged over 7% as a result, also pushing US TSY yields and the dollar higher.

With all eyes on Vienna, where optimism OPEC ministers will salvage a deal to cut production, oil has soared by over 6% reverberating through the financial markets, spurring oil’s biggest gain in two weeks and sending stocks of energy producers and currencies of commodity-exporting nations higher.

Crude bounced off a two-week low as Iranian Oil Minister Bijan Namdar Zangeneh said producers will reach an agreement without his country freezing production. Russia’s ruble, Norway’s krone and Mexico’s peso advanced as oil companies led European stocks higher for the second day. Royal Bank of Scotland Group Plc slipped 4 percent after failing the Bank of England’s toughest-ever stress test.

While some are skeptical, such as Stuart Samuels, a London-based sales trader at Oppenheimer Europe, who spoke to Bloomberg saying that “oil prices are driving today’s gains — anything other than a production cut and we’ll head south. Markets tracking the move in crude near-term is causing some volatility. I’d be inclined to take some profits,” so far the algos are in charge forcing a furious squeeze.

As Reuters summarizes, combined with fresh concern about China’s banking system, a stress test for British banks and a raft of euro zone data, the OPEC meeting topped off a wild November for financial markets that has been dominated by Donald Trump’s victory in the U.S. presidential election.

European stocks were lifted by a jump in oil companies amid the OPEC talk, although banks struggled as Royal Bank of Scotland failed a Bank of England stress test and Italian lenders fell before a referendum on the country’s political system on Sunday.  The Stoxx Europe 600 Index rose 0.1 percent, keeping it on track for its best month in four.  Shares of oil producers headed for a one-month high, bouncing back from a three-day slide. BP, Shell and Eni SpA climbed at least 2.5 percent. Linde AG led chemical companies higher in Europe, gaining 6.6 percent after saying it’s reviewing a revised merger proposal from Praxair Inc. Royal Bank of Scotland declined as much as 5 percent in London trading, reaching its lowest since Nov. 9.

Worries about China’s financial sector had also spread in Asia overnight. Shanghai stocks fell about 1 percent amid concern about government moves to stem capital flight and halt the recent sharp fall in the yuan.

“The stress could continue for a while,” said Gu Weiyong, chief investment officer at hedge fund Ucom Investment Co. “Whether the situation gets better depends on the willingness of the central bank to inject more liquidity into the system.”

Emerging stocks rose marginally but were headed for their biggest monthly fall since January. Currencies hit by the latest onslaught from the dollar were also set to close November with hefty losses.  The Turkish lira and Mexican peso have lost around 8 to 9 percent versus the dollar for their biggest monthly declines since 2008 and 2012 respectively.

The dollar advanced 0.7 percent to 113.12 yen. The greenback has climbed 7.9 percent against its Japanese peer since Oct. 31, headed for its biggest gain since February 2009. Bloomberg’s dollar gauge advanced 0.1 percent, pushing its gain this month to 3.5 percent, the most since May.

“Dollar strength has mainly been driven by expectations, so these can only carry you so far,” Commerzbank currency strategist Esther Reichelt said. “In the end we want to see some facts to show these changed expectations are justified.”

Treasury 10-year yields rose four basis points to 2.33 percent, up from 1.83 percent on Oct. 31. The yield is on course of the biggest monthly since December 2009. German bund yields declined one basis point to 0.21 percent

* * *

Market Snapshot

• S&P 500 futures up 0.2% to 2208
• Stoxx 600 up 0.2% to 341
• FTSE 100 up 0.6% to 6812
• DAX up 0.2% to 10645
• German 10Yr yield down 1bp to 0.21%
• Italian 10Yr yield down less than 1bp to 1.94%
• Spanish 10Yr yield up less than 1bp to 1.51%
• S&P GSCI Index up 3.2% to 371.6
• MSCI Asia Pacific up less than 0.1% to 136
• Nikkei 225 up less than 0.1% to 18308
• Hang Seng up 0.2% to 22790
• Shanghai Composite down 1% to 3250
• S&P/ASX 200 down 0.3% to 5440
• US 10-yr yield up 4bps to 2.33%
• Dollar Index up 0.21% to 101.14
• WTI Crude futures up 7.4% to $48.51
• Brent Futures up 6.5% to $49.40
• Gold spot down less than 0.1% to $1,187
• Silver spot up 0.2% to $16.66

Top Headline News

• OPEC Ministers Say a Deal Is Close as Meeting on Oil Cuts Begins: Iran Oil Minister Zanganeh says OPEC to reach an agreement
• Linde Says It’s Reviewing New Merger Proposal From Praxair: Combination would create largest supplier of industrial gases
• RBS Fails Toughest-Ever BOE Stress Test, Boosts Capital Plan: RBS says intends to cut costs and reduce risk-weighted assets
• Mnuchin Said to Be Trump’s Treasury Pick as Economic Team Forms: Billionaire investor Wilbur Ross said to be Commerce choice
• Negotiators Said to Agree on $611.2 Billion Defense Bill: Measure strips military draft requirement for young women
• Weatherford Curbs U.S. Fracking Business as Low Prices Persist: Baker Hughes says it’s forming a new fracking joint venture
• Trump Notches a Win as Carrier Agrees to Keep 1,000 Jobs in U.S.: Announcement said to be set for Thursday at Indiana factory

* * *

Looking at regional markets, Asian stocks failed to capitalize on the impetus from a positive lead from Wall St and traded mixed ahead of the looming OPEC showdown and on month-end rebalancing. Nikkei 225 (+0.1%) was flat as recent JPY softness stemmed downside in the index, while ASX 200 (-0.3%) was led lower by energy and mining after WTI crude futures and iron ore prices both declined around 4%. KOSPI was kept afloat by record highs in index heavyweight Samsung Electronics, while Chinese markets were mixed with the Shanghai Comp (-1.0%) the laggard amid 8% declines in Dalian iron ore prices attributed to profit taking, tech selling and liquidity concerns which saw money market rates surge, while the Hang Seng (+0.2%) was underpinned by property names after Evergrande boosted its stake in China’s largest residential property developer Vanke. 10yr JGBs were marginally lower with underperformance in the short-end on month-end flows and profit-taking following strength in the wake of yesterday’s 2-year auction results. Chinese money market rates increased with China’s 14-Day Repo surging to 20-month highs and the 6-month HIBOR advancing to the highest since May 2009 amid continued liquidity concerns, while today’s liquidity operations by the PBoC resulted into a net drain for the 4th day after taking into consideration prior maturing reverse repos.

Top Asian News

• Asian Bond Rout Has Analysts Struggling to Keep Pace With Yields: Global funds withdrew $7.8b from emerging Asia bonds
• Dangers Flagged by Jump in Riskiest China Banks’ Fund Costs: AA+ certificate of deposit rates jump 35 bps to 3.50%
• Mitsui Fudosan Is World’s First Developer to Sell 0.001% Bonds: Japanese firm forecasting record profit this fiscal year
• Western Australia to Sell 51% of Distributor Western Power: Govt plans to use proceeds to reduce debt by A$8b
• Racy Photos Prompt Alipay Apology as Social-Media Push Backfires: Racy Photos Prompt Alipay Apology as Social-Media Push Backfires

European equity markets trade higher this morning (Euro Stoxx 50: +0.4%) lifted by energy names in the wake of the apparent OPEC deal to cut production. Elsewhere, in the latest Bank of England stress tests, RBS failed and stated they will submit a new capital plan to rectify the situation, subsequently this saw shares falling 3.6% at the open. Barclays and Standard Chartered both passed but reports suggest they require more capital. In other news Linde shares rose 6% at the open following reports that the Co. have renewed talks with Praxair over a potential merger of equals. Fixed income markets have seen Bunds trade higher throughout the morning, however with the Dec’16 future finding resistance ahead of the 162.00 level to fall lower by mid European morning in tandem with the OPEC inspired risk on sentiment.

Top European News

• Carney Returns Draghi’s Brexit Warning With One of His Own: Says U.K. is ‘effectively the investment banker for Europe’
• Euro-Area Inflation Accelerates Before Key ECB Decision on QE: Consumer prices rise 0.6%, core inflation unchanged at 0.8%
• Only Skilled Should Get U.K. Work Visas Post-Brexit, Report Says: Refusing permits to unskilled workers would reduce the net inflow of migrants from the EU by about 100,000 people a year, Migration Watch U.K. says

In currencies, the dollar advanced 0.7 percent to 113.12 yen. The greenback has climbed 7.9 percent against its Japanese peer since Oct. 31, headed for its biggest gain since February 2009. Bloomberg’s dollar gauge advanced 0.1 percent, pushing its gain this month to 3.5 percent, the most since May. Private payrolls increased by 170,000 this month, after 147,000 gain in October, data from the ADP Research Institute in Roseland, New Jersey, will show Wednesday, according to a Bloomberg survey of economists. Russia’s ruble gained 0.9 percent versus its U.S. counterpart, the biggest increase among 31 major currencies tracked by Bloomberg. Norway’s krone was the next best with a 0.6 percent appreciation while the Mexican peso rose 0.3 percent.

In commodities, WTI crude futures added over 6% percent, clawing back all of Tuesday’s 3.9 percent tumble. Iran’s oil minister said there were acceptable proposals on the table, but his country would not countenance a freeze or cut based on current levels. Saudi Arabia has said it is ready to reject an agreement unless all OPEC members — excluding Libya and Nigeria — take part, people familiar with the kingdom’s position said. Base metals rebounded in London, with zinc climbing 1.5 percent and copper up 0.5 percent. The London Metal Exchange Index tumbled 3.4 percent on Tuesday, its biggest one-day retreat in more than a year. Gold for immediate delivery was little changed at 1,188.74 an ounce; it’s down 6.9 percent since Oct. 31, poised for its worst month since June 2013.

On the packed US event calendar first up is the November ADP employment change print which will be closely watched ahead of payrolls, then shortly after we’ll get the October personal income and spending data, as well as the Fed’s favoured inflation measures – the PCE core and deflator readings. The other data due out today includes the Chicago PMI for this month and October pending home sales data. Later today the Fed will release its latest Beige Book. Away from the data, the Fedspeak today consists of Kaplan, Powell and Mester. ECB President Draghi is also scheduled to speak at 12.45pm GMT in Madrid.

DB’s Jim Reid concludes the overnight wrap

Today’s cinematic experience will be about ‘Finding OPEC’ as the long awaited Vienna summit arrives today. If we’re to get a positive outcome then it appears that it’ll take one of either Saudi Arabia or Iran to soften their stance with both seemingly at loggerheads with each other. According to the WSJ Saudi Arabia is prepared to reject an agreement unless the cartel gets cooperation from all members with the exception of Libya and Nigeria. Another newswire suggests that Iraq has agreed to participate in a freeze, but not an outright cut in production. So plenty of posturing. WTI was down -3.93% yesterday and back below $46/bbl and its hovering around that level this morning. That follows a gain of +2.21% on Monday and a similar decline on Friday. In reality it’s traded in a $5 range for most of this month. On the timing front for today the tentative programme on the OPEC website this morning suggests that the closed session will begin at 11am GMT, while a press conference is scheduled for 3pm GMT. One would imagine that discussions will run for as long as it takes though.

So while that move for Oil yesterday kept the energy sector under pressure, market nerves around Italy seemed to reverse yesterday on press speculation that the ECB could temporarily step up purchases of BTP’s should Sunday’s result cause yields to spike. The suggestion in the Reuters report was that the ECB QE programme was flexible enough to allow for a temporary increase in purchases and that undertaking such a move would not necessarily need to be ‘rubber-stamped’ by the Governing Council, which as a reminder meets formally 4 days after. The article feels a bit vague at this stage and also has a case of easier said than done about it given the potential political ramifications.

That said the story was a big boost to Italian assets yesterday. The FTSE MIB rebounded +2.13% for its strongest day in over 3 weeks, easily outperforming the likes of the Stoxx 600 (+0.33%) and the DAX (+0.36%). 10y BTP yields closed down 12.4bps at 1.941% and had their strongest day since March with strong demand for the 5y and 10y BTP auctions also helping. Bunds on the other hand finished up a couple of basis points at 0.217%. Credit also had a decent day with the iTraxx Main finishing 2.5bps tighter and Senior and Sub-Fin indices 4.5bps and 7bps tighter respectively.

Across the pond equity markets in the US strengthened for much of the session and despite a bit of drag into the close the S&P 500 (+0.13%), Dow (+0.12%) and Nasdaq (+0.21%) still edged higher, although the small-cap Russell 2000 (-0.12%) was lower for a second day in a row. 10y Treasury yields peaked at 2.348% before ending the day just over 2bps lower at 2.292% with the volatility blamed on a bit of account rebalancing into month end. The Fed’s Powell spoke but maintained his hawkish line saying that the Fed is ‘reasonably close’ to achieving full employment and that the case for tightening has ‘clearly strengthened’.

That peak for Treasury yields yesterday came just after the second reading for Q3 GDP in the US. Growth was revised up from 2.9% qoq annualized to 3.2% and a bit more than expected. The driver appeared to be the decent upward revision to consumer spending which was taken up to +2.8% from +2.1%. That more than offset soft business investment. Encouragingly, the first estimate of corporate profits for Q3 reported a +6.6% qoq annualized gain which is the highest since Q2 2014. That reading means that the YoY rate has now turned positive again at +2.8% versus -4.3% in the prior quarter. It’s the first time that profits have turned positive since Q1 2015.

Refreshing our screens this morning it’s once again been a broadly mixed start in Asia with bourses largely directionless ahead of the OPEC meeting. Moves have been pretty modest though. The Nikkei is unchanged while the Kospi (+0.07%) and Hang Seng (+0.17%) have edged modestly higher. The ASX (- 0.45)% is lower while the Shanghai Comp is down a sharper -0.96% perhaps reflecting a drop in China’s consumer sentiment for this month to 114.9 from 117.1 last month. There was also some data in the UK overnight with the November consumer confidence print reported as falling 5pts to -8, albeit still above the post Brexit low of -12 in July. The other news to highlight this morning concerns the latest Trump cabinet appointment. US media outlets are reporting that Steven Mnuchin has been appointed as Trump’s Treasury secretary. Bloomberg is suggesting that Trump is to continue auditions for the secretary of state role today.

Wrapping up the rest of the data yesterday. Along with that positive GDP print, the other notable data in the US yesterday was the Conference Board’s consumer confidence index which was reported as rising a bumper 6.3pts this month to 107.1 (vs. 101.5 expected) and the highest in nine years. The present conditions index in particular surged to the highest since July 2007 while a measure of consumer expectations for the next six months is now at the highest since June 2015.

It was a reasonably heavy day for data in Europe too yesterday. There were no surprises from Germany’s CPI report for this month with the flash print coming in at +0.1% mom as expected. The European  Commission reported a modest 0.1pt increase in its economic sentiment reading for this month to 106. In France Q3 GDP came in bang on consensus at +0.2% qoq and +1.1 yoy. Finally in the UK there was positive news to come from the October consumer spending stats. Household credit growth was said to have risen to +10.5% yoy from +10.4% while mortgage approvals rose about 6% and more than
expected to 67.5k.

Staying in Europe and just before we look at the day ahead, it’s worth highlighting an updated report by our European economists looking ahead to this Sunday’s re-run of the Austrian Presidential Election. Our colleagues note that the race is neck and neck with current polls pointing to a close race although with the latest poll slightly favouring independent candidate Van der Bellen over right-wing populist candidate Hofer by 51% to 49%. Clearly though, as recent events have taught us, polls should be interpreted with a decent degree of caution. The report highlights that each candidate’s position and interpretation of the presidential office is fundamentally different. Hofer is a critic of the EU, advocates a strict asylum policy and intends to be an “active president”. Van der Bellen endorses the EU and is clearly opposed to an Oxit, but has a similarly strict view on refugees, supporting an asylum cap. He does not intend to be an overly active president and again and again criticizes Hofer for misinterpreting the office. In the final stage of their election campaigns both candidates are trying to drum up support from centre-right voter’s, undecided and traditional non-voters’. They go on to say that a Van der Bellen victory would take away near-term political uncertainty. If Hofer wins an immediate political shock seems unlikely, but political uncertainty would increase. Hofer has speculated about early parliamentary elections in 2017.

To the day ahead now. This morning in Europe the early data is out of Germany where the latest retail sales data is due. Following that we’ll get CPI in France, unemployment data in Germany and then the CPI print for the Euro area for this month. Also out this morning is the BoE’s semi-annual Financial Stability Report, with Governor Carney scheduled to hold a press conference after the documents are released. Meanwhile it’s a fairly packed calendar this afternoon in the US. First up is the November ADP employment change print which will be closely watched ahead of payrolls, then shortly after we’ll get the October personal income and spending data, as well as the Fed’s favoured inflation measures – the PCE core and deflator readings. The other data due out today includes the Chicago PMI for this month and October pending home sales data. Later today the Fed will release its latest Beige Book. Away from the data, the Fedspeak today consists of Kaplan at 1pm GMT, Powell at 4.45pm GMT and Mester at 5.35pm GMT. ECB President Draghi is also scheduled to speak at 12.45pm GMT in Madrid. The main focus today however will highly likely be on the outcome of the aforementioned OPEC meeting in Vienna.

Important:  Horseman capital states that if China wishes to stop the bleeding of foreign reserves, it must increase its interest rate by a full 6.5% and that is not going to happen. Then we must expect a huge devaluation from China!

(courtesy Horseman Capital/zero hedge)

Horseman Capital Asks “Is China Running Out Of Money”

 

 

end

What a joke: all the banks should fail their stress test. However RBS tumbles after failing the Bank of England’s toughest ever stress test.  Also Barclay’s and Standard has inadequacies

RBS Tumbles After Failing BoE’s “Toughest Ever Stress Test”

On Dec 4, this Sunday we have two elections:

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

6.GLOBAL ISSUES

India

 

7.OIL ISSUES

Oil Soars 6% On Optimism For Imminent OPEC Output Deal

For those curious why oil has soared over 6% in early trading, here is the one tweet explanation we posted yesterday during the peak pessimism surrounding the OPEC deal:

Indeed, shorts piled in, and now they are rushing for the exits on an unprecedented volley of relentless “optimistic” headlines. Technicals aside, the “fundamental” reason why WTI has exploded this morning…

… is because once again optimism has returned that OPEC is close to a deal to reduce supply though final terms still need to be agreed, Saudi Arabian Oil Minister Khalid Al-Falih told reporters at OPEC’s Vienna HQ, adding Riyadh would agree to Iran freezing production at pre-sanctions levels. The comments could be seen as a compromise by Riyadh, which in recent weeks insisted that Iran fully participate in any cut.

Falih also said OPEC was focusing on reducing output to a ceiling of 32.5 million barrels per day, or cutting by more than 1 million bpd, and hoped Russia and other non-OPEC members would contribute a cut of another 0.6 million bpd. Subsequent headlines expanded the scope of the cut to 1.4mmpd, following a suggestion that non-OPEC countries, led by Russia, would also cut to the tune of 600kbpd, with Russia expected to contribute 400kpbd of the cut.

The February contract in Brent crude, the global oil benchmark, was up 6.6% at $50.45 a barrel on London’s ICE Futures exchange, according to FactSet. On the New York Mercantile Exchange, West Texas Intermediate futures were trading up 5.8% at $47.83 a barrel.

“The communication this morning is extremely positive from Iran,” said Bjarne Schieldrop, a commodities analyst from Sweden’s SEB bank, adding that the market was volatile ahead of the meeting’s outcome.

Iran’s willingness to participate in some way—a long-held Saudi demand—signals a greater likelihood that all OPEC members will agree to a deal.

A successful OPEC accord is also crucial in getting non-OPEC producers—like Russia—to slash production in a collective effort to lift global oil prices. Russia has said it wouldn’t make any commitment until an agreement was forged by OPEC members.

Cited by the WSJ, Barnabas Gan, an economist at OCBC bank in Singapore said that “the fact that geopolitical rivals, Saudi Arabia and Iran, appear to have problems resolving their differences on the allocation of any cartel-wide production cuts seems to be the major stumbling block to any agreement.”

The Organization of the Petroleum Exporting Countries started a closed-door session at around 1000 GMT (5 a.m. ET) with a news conference scheduled for 1500 GMT.

Here is a brief summary of all the key highlights and headlines from this morning courtesy of Bloomberg:

• “There are good chances” and the “sticking point” remains distribution of production cuts: Al-Falih says just before group starts its formal meeting
• Regarding Iran, Saudi Arabian Oil Minister Khalid Al-Falih told reporters at OPEC’s Vienna HQ that a“freeze at pre-sanctions level is acceptable” adding that “Secondary sources are consistent: pre-sanctions level is more or less what they have now”
• Iraq’s minister says his country is ready to cut output within the framework of its own interests and hasn’t yet decided its level of cutback.
• Venezuela’s minister says he expects Iran, Nigeria, Libya to be exempt from cuts while Iraq expected to cut along with other OPEC members; “we think that $60 is a fair price”
• Oil prices rose earlier Wednesday after Iranian Oil Minister Bijan Zanganeh said he was “optimistic” OPEC is close to a deal, then rallied more on comments from other ministers, with January Brent futures topping $49/bbl.
• Zanganeh also said: “For Iran, no reduction, no freeze. It’s a new arrangement, it’s not a freeze for any country.”
• Prices rallied further, with Brent approaching $50, on comments from Zanganeh that non-OPEC Russia had changed its view and was ready to make an output cut.
• OPEC are now said to be discussing a cut of 1.4mmbpd, up from the initial target of 1.2 mmbpd, with 600kbpd said to come from non-OPEC nations.
• Several ministers, including Nigeria, made positive comments Wednesday morning, suggesting supply deal is still possible, following an a sense of deadlock earlier this week
• Still, Indonesia says issues “not easily resolved”
• Algeria proposed Tuesday that OPEC’s 14 members would cut production to 32.5m b/d from October level of 33.6m b/d, according to 2 delegates familiar
• Under that proposal, Angola will cut from September level because it had some field maintenance in October
• Nigeria, Libya would also be exempted
• Still, OPEC will consider the 2 nations’ output in calculating group target, using YTD averages, not October levels
• Iran has suggested freezing at 3.975m b/d; Saudi Arabia countered with a proposed cap for Iran at 3.707m b/d; Algeria recommended 3.795m b/d

To be sure, Russia already appeared to be backing away from a promise of a 400kbpd cut, saying it would be a bit “excessive.”

Putting the oil move in the context of the Vienna OPEC summit here is a chart showing the price reaction across all recent OPEC negotiations:

With headlines coming fast and furious, and the squeeze smashing shorts, we expect oil to rise even more before the final deal is reached. It remains to be seen if a “sell the news” reaction will follow.

END

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