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Oil Surges To 5 Week High As BofA Sees Crude Hitting $100 In A “Very Cold Winter”

Oil Surges To 5 Week High As BofA Sees Crude Hitting $100 In A "Very Cold Winter"

Oil rose more than 1% on Monday, supported by concerns over shut output in the United States because of damage from Hurricane Ida, with analysts expecting price

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Oil Surges To 5 Week High As BofA Sees Crude Hitting $100 In A "Very Cold Winter"

Oil rose more than 1% on Monday, supported by concerns over shut output in the United States because of damage from Hurricane Ida, with analysts expecting prices to remain rangebound in a stable market over the coming months, while some forecasting that physcial shortages could lead to sharply higher prices, while a cold winter could send oil as high as $100.

Brent crude rose 90 cents, or 1.2%, to $73.82 a barrel - the highest price since the first week of Autgust - while WTI crude was up 99 cents, or 1.4%, at $70.71. Brent has held between $70 and $74 a barrel over the past three weeks.

“Oil prices may not have much room to rise in the near term, but at the same time are not expected to crash soon,” said Stephen Brennock of broker PVM.

Prices found some support from Hurricane Ida’s impact on U.S. output as about three-quarters of the offshore oil production in the Gulf of Mexico, or about 1.4 million barrels per day, has remained halted since late August.

“Hurricane Ida was unique in having a net bullish impact on U.S. and global oil balances - with the impact on demand smaller than on production,” Goldman Sachs analysts said in a note from last Friday. However, the number of rigs in operation in the United States grew in the latest week, energy service provider Baker Hughes said, indicating production could rise in coming weeks.

Separately, the Energy Information Administration (EIA) last week said it expected Brent prices to remain near current levels for the remainder of 2021, averaging $71 a barrel during the fourth quarter.

“Markets still need clarity on the virus impacts beyond the very near term; and until we get that, it seems like most assets, including oil, may continue to drift sideways,” said Howie Lee, an economist at Singapore’s OCBC bank.

Oil prices briefly fell last week amid supply concerns linked to China’s planned release of oil from strategic reserves while the hope of fresh talks on a wider nuclear deal between Iran and the West was raised after the U.N. atomic watchdog reached an agreement with Iran on Sunday about the overdue servicing of monitoring equipment to keep it running. China on Monday said it will announce details of planned crude oil sales from strategic reserves in due course, however as Rabobank noted over the weekend, "the move signaled political vulnerability to rising commodity price inflation, but even more so, it is not enough physical supply to move the dial."

But while prevailing sentiment was cautious, three banks see substantially more potential upside, among them Goldman, Bank of America and Citigroup.

In a note published late on Sunday, Goldman's chief economist Jeffrey Currie wrote that going into autumn, oil is poised to rally significantly, particularly should Iranian deal fall apart. If oil hits target of $80/bbl, “it would be hard for investors to ignore inflation in the most important physical commodity markets.” That is “why we see oil as the catalyst this autumn to attract investors back into the space."

According to Currie the key driver behind ongoing commodity surge is the "growing scarcity across physical markets." The Goldman strategist notes that "since last October, policymaker and investor focus has remained on the vaccine-driven demand recovery from the deepest recession on record. Yet today, physical goods demand has reached such high levels — above pre-pandemic trends in all but oil — that the system is becoming increasingly constrained in its ability to supply these goods."

But now, with the pandemic inventory glut run down, these markets are becoming increasingly exposed to any type of supply disruption or unexpected demand increase. The lower the inventory cover, the bigger the risk and the larger the scarcity premium in prices when one of these events materializes – just as we are seeing in European gas and power today.

Oil likely catalyst to get investors back into commodities and reflation trade. In our view, European energy pricing dynamics offer a glimpse of what is in store for other commodity markets in coming months as micro factors are increasingly in the driving seat, with widening deficits depleting inventories leading to elevated price volatility as markets struggle to find a balance. Going into the autumn we believe oil is the market that is poised to rally significantly, particularly should an Iran deal fall apart. Were oil to reach our target of 80/bbl, it would be hard for investors to ignore inflation in the most important physical commodity markets. This is why we see oil as the catalyst this autumn to attract investors back into the space that should also help prices at the margin. Moreover, current market conditions make now an attractive entry point for base metals, in our view, as copper positioning is the cleanest it has been all year, at only 10% of 2021 highs. Further, for the first time in this bull market, both onshore and DM investors have a large amount of additional length to add, particularly if onshore policy remains supportive. The market is pushing back the likelihood of Fed tapering, but with such a move inevitable once Delta risks recede, we believe the reflation trade unwind is behind us, with risks firmly poised to the upside.

The bottom line according to Goldman is that "oil is set to rally strongly" because despite a large Delta wave in Covid-averse SE Asia, including China, global oil demand barely declined at 98 mb/d.

In addition, OPEC+supply additions materially disappointed vs. their quotas in August even more than Goldman's expectations, while, outside of the group, production in Brazil, Norway, Colombia, SEAsia, and others struggle to ramp up in the face of maintenance, project delays, and higher decline rates from underinvestment. Meanwhile, as Goldman observed last week, Hurricane Ida proved to be a rare bullish storm shock to global balances, "hampering US production that continues to recover slower than the market expects."

As such, Kostin concludes that the market remains in deficit with the only remaining inventory surplus relative to pre-Covid levels in China, where higher demand and refinery runs ultimately necessitate it.

Net, we forecast that OECD stocks will reach their lowest levels since early 2015, driving the forward curve into steeper backwardation initially and ultimately necessitating higherlong-dated prices to incentivize higher production. Accordingly, we reiterate our $80/bbl price target for 4Q21 with upside risks to 1H22.

Citigroup's Ed Morse, who has been traditionally very bullish on oil and has been used by OPEC+ as the cartel's in-house advisor on several occasions, was similarly bullish, noting in a note that Hurricane Ida left the oil market looking stronger than expected at the end of the summer, even if the dynamics for next year are still bearish although he was quick to note that a continued pandemic recovery will support prices into 4Q. However, beyond that U.S. producers are gearing up to supply more oil, Saudi Arabia is planning to raise its output capacity, and Russia’s largest producers also plan to raise production and increase exports.

But while sellside sentiment continues to turn bullish on oil, nothing compares to the note published overnight by BofA commodities head Francisco Blanch who said in a note overnight that a very cold winter could see Bank of America’s 3Q 2022 call for $100/bbl Brent crude oil rolled forward. According to Blanch, If winter turns out to be much colder than normal, demand could surge by 1m-2m b/d as the weather is quickly becoming the most important driver of energy markets.

Noting that global crude oil prices have been range-bound since staging "a remarkable rally all the way through late June 2021 as gasoline demand surged into the summer months" but a lack of product demand leadership from the distillate complex has prevented further upside, Blanch asks rhetorically "has the oil rally stalled?" In his view, the answer is now and he explains why:

As other energy prices like natural gas and coal keep pushing higher, upside risks to the oil market have started to build. For starters, there is an estimated 1.8mn b/d of available gas to oil switching at power plants capacity across Europe and Asia, even if only a fraction of this capacity is likely to be utilized. Switching may also be possible at industrial operations, including some refineries, which could lead to more oil demand this winter.

Yet the rapid spike in gas prices may lead to substitution

Further supporting oil prices, global demand is coming back and OECD oil inventories just dropped to the 10 year average. Looking at US total product demand, we note that volumes are already back to pre-pandemic levels in aggregate. Although the Covid-19 Delta variant remains a problem, particularly for Emerging Markets, consumption is coming back with a vengeance led by China and India. From natural gas liquids used in petrochemical processes, to light products like gasoline, to bunker fuels in shipping and power generation, petroleum demand appears to be very robust. And distillates, the dominant fuel in oil pricing dynamics over the winter months, have lagged due to limited air traffic. But a surge in demand for heating oil and kero could boost distillate demand.

But the big catalyst that could lead to a sharp spike in prices is cold winter weather which could roll forward BofA's $100/bbl oil call.

Blanch first reiterates his base case: "We continue to project that oil prices will remain range-bound in 2H21 and maintain our average Brent crude oil forecast of $70/bbl for this period (Exhibit 40), although we now target Brent to be at $75/bbl by year end as we see growing upside risks. In line with this view, we project deficits over the coming months that should support oil prices into year-end."

Then looking ahead, he hedges that while a new Covid-19 wave, taper tantrum, a China debt crisis, and the return of Iranian crude barrels could push oil lower, "weather is quickly becoming the most important driver of energy markets. If the winter turns out to be much colder than normal, global oil demand could surge by 1 to 2mn b/d. Under this scenario, the oil market deficit this winter could easily exceed 2mn b/d and our $100/bbl oil target for the middle of next year could quickly be rolled forward six months."

Tyler Durden Mon, 09/13/2021 - 10:58

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Government

Bolsonaro Indicted By Brazilian Police For Falsifying Covid-19 Vaccine Records

Bolsonaro Indicted By Brazilian Police For Falsifying Covid-19 Vaccine Records

Federal police in Brazil have indicted former President Jair…

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March 19, 2024

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Bolsonaro Indicted By Brazilian Police For Falsifying Covid-19 Vaccine Records

Federal police in Brazil have indicted former President Jair Bolsonaro for falsifying his Covid-19 vaccine card in order to travel to the United States and elsewhere during the pandemic.

Federal prosecutors will review the indictment and decide whether to pursue the case - which would be the first time the former president has faced criminal charges.

According to the indictment, Bolsonaro ordered a top deputy to obtain falsified Covid-19 vaccine records of himself and his 13-year-old daughter in late 2022, right before he flew to Florida for a three-month stay following his election loss.

Brazilian police are also waiting to hear back from the US DOJ on whether Bolsonaro used said cards to enter the United States, which would open him up to further criminal charges, the NY Times reports.

Bolsonaro has repeatedly claimed not to have received the Covid-19 vaccine, but denies any involvement in a plan to falsify his vaccination records. A previous investigation by Brazil's comptroller general concluded that Bolsonaro's vaccination records were false.

The records show that Bolsonaro, a COVID-19 skeptic who publicly opposed the vaccine, received a dose of the immunizer in a public healthcare center in Sao Paulo in July 2021. [ZH: hilarious, Reuters calling the vaccine an 'immunizer.']

The investigation concluded, however, that the former president had left the city the previous day and didn't leave Brasilia until three days later, according to a statement.

The nurse listed in the records as having applied the vaccine on Bolsonaro denied doing so and was no longer working at the center. The listed vaccine lot was also not available on that date, the comptroller general's office said. -Reuters

"It's a selective investigation. I'm calm, I don't owe anything," Bolsonaro told Reuters. "The world knows that I didn't take the vaccine."

During the pandemic, Bolsonaro panned the vaccine - and instead insisted on alternative treatments such as Ivermectin, which has antiviral properties against Covid-19. For this, he was investigated by Brazil's congress, which recommended that the former president be charged with "crimes against humanity," among other things, for his actions during the pandemic.

In May, Brazilian police raided Bolsonaro's home, confiscating his cell phone and arresting one of his closest aides and two of his security cards in connection to the vaccine record investigation.

Brazil's electoral court ruled that Bolsonaro can't run for public office until 2030 after he suggested that the country's voting system was rigged. For that, he has to sit out the 2026 election.

Tyler Durden Tue, 03/19/2024 - 11:00

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International

This gambling tech stock is future-proofing the world’s casinos

Supported by the universal thrill of a quick payout and the need for leisure, gambling stocks make a compelling case for long-term returns.
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Supported by the universal human thrill of a quick payout, and the need for leisure and entertainment to bring enjoyment to adult life, casinos will remain essential spaces for people to dream and play for the foreseeable future, making gambling stocks a prospective space to look for long-term returns.

According to Research and Markets, the global casino industry was valued at US$157.5 billion in 2022, and it will grow to US$224.1 billion by 2030 at a compound annual growth rate of 4.5 per cent. This trend includes:

Approximately 100 million gamblers in the United States, who generated US$66.5 billion in revenue in 2023, a 10 per cent gain from 2022, which itself was a record year A little fewer than 20 million gamblers in Canada, who generated about C$15 billion in revenue in 2023 A global addressable market of thousands of casinos, and more than 4.2 billion people who gamble at least once every year, according to a 2016 study by Casino.org

The main challenge with attracting these billions through casino doors is they sway heavily toward middle age. The mean age of U.S. casino visitors has hovered around 50 for the past decade, with a similar trend across the world, forcing casinos to attract younger, tech-savvy customers, many with less gambling experience, to continue growing profits for their stakeholders over the long term.

Investors seeking exposure to a leadership position in building the bridge between casinos and the next generation of gamblers should evaluate Jackpot Digital (TSXV:JJ). The Vancouver-based company is a manufacturer of dealerless electronic table games that deliver immersive experiences tailored to the digital age, while earning casinos attractive returns on investment.

The gambling technology stock benefits from no direct competition in the dealerless poker space, with orders spanning North America, Europe, Asia, Africa and the Caribbean, a long-established presence with major cruise ship brands, such as Carnival, Princess Cruises and Holland America, and a growing land-based presence with orders or ongoing installations across 12 U.S. states. Its highlight partnership to date is a master services agreement with Penn Entertainment, the country’s largest regional gaming operator with 43 properties across 20 states.

Jackpot Digital’s differentiated technology and well-rounded management team are at the heart of its success in landing several blue-chip casino gaming companies as customers.

Jackpot Blitz

The gambling technology stock’s flagship product, Jackpot Blitz, is a dealerless poker table featuring three of the world’s most popular variations – Texas Hold’ em, Omaha, and Five-Card-Omaha – brought to life through slick 4k graphics on a 75-inch touchscreen, and offered in three formats – pot-limit, no-limit and fixed-limit – designed to attract a diversity of revenue from casual to experienced players.

Spokesperson and NFL championship-winning coach Jimmy Johnson explains the benefits of the Jackpot Blitz. Source: Jackpot Digital.

The table also comes equipped with house-banked mini-games, including blackjack, baccarat and video poker, as well as side bets on the main poker game, such as Bet the Flop, all of which keep players engaged and entertained between, and even during, poker hands. The stunning Jackpot Blitz machine also offers multi-venue “Bad Beat” jackpot functionality, allowing casinos to offer a “Poker Powerball” with massive Jackpots, further enhancing the attractiveness of Jackpot Blitz to new players.

It’s by striking a balance between the needs of the modern gambler, and efficiency and profitability that in-person operators couldn’t hope to match – unless they ordered the machine for themselves – that Jackpot Digital has earned itself the top spot in dealerless poker.

Player benefits

When a veteran or novice gambler takes a seat at the Jackpot Blitz, his or her experience begins with an easy-to-use interface, laid out in a modern and stylish design, programmed to respond to hand gestures that bring real casino play into the digital age, including card bending and chip jingling.

Source: Jackpot Digital.

The table’s intuitive controls, combined with instant payouts and its dealerless nature, translate into faster game play, which maximizes playing time and player excitement, while minimizing human error and the intimidation new gamblers might feel about approaching an analog poker table. The gambling technology stock’s in-house development team is also constantly working on new games to keep content fresh, with a special focus on bringing international games and regional versions of poker to casino audiences in Asia, South America and the Indian subcontinent.

As hands are laid down and pots pile up, players can also track game stats in real time, which inform future strategy and enhance the thrill of the moment with an added element of competition.

Operator benefits

From an operator’s perspective, a floor of automated gaming tables can meaningfully and instantly reduce casino staff expenditures and management pain points, while avoiding wage inflation, labour shortages and supply costs.

The Blitz is no slouch on revenue either, dealing more hands per hour, resulting in higher revenue and higher profitability, which is further enhanced by onboard side bets and mini-games that can be played while players are engaged in a poker hand.

The Jackpot Blitz’s economics are attractive to operators thanks to its ability to accommodate non-stop play, while monetizing downtime through side games and bets. While a human dealer must spend time shuffling, interacting with players, and consulting with colleagues, the Jackpot Blitz can accept wagers 100 per cent of the time, making sure gamblers get the action they came for and operators see a return on their investment.

Source: Jackpot Digital.

Beyond gaming revenue, casinos are further incentivized to onboard the Jackpot Blitz because of its fully customizable advertising functions, including logos, card backs, chips and felt colors, all of which bolster casino culture and enable the pursuit of revenue from third-party advertising partners.

The Blitz ties its value proposition together by generating automatic reports – including demographics and consumer behaviour through a rewards card system – and plugging directly into most back-end management systems, saving casinos the hassle of manual tracking, while also minimizing tampering, money-laundering and theft through the use of isolated servers.

Whether it’s streamlining the player experience or putting automation at the service of operators’ bottom lines, Jackpot Digital’s flagship product is positioned to create value, and plenty of it.

Jackpot Digital’s path to profitability

After existing as an exclusively cruise-ship-based operation since 2015, Jackpot Digital suffered a steep decline in revenue during the COVID pandemic, falling from C$2.18 million in 2019 to C$0.42 million in 2021.

Management quickly pivoted in the face of uncertainty, redesigning the Blitz to execute on a land-based expansion strategy – backed by Gaming Labs International certification in fall 2023 – which is bringing about a successful turnaround after the re-emergence of the casino business. Revenue more than tripled to C$1.43 million in 2022, and reached C$1.57 million through three quarters of 2023, with the company expecting to ramp up significant recurring revenue after it installs several dozen machines currently in its backlog.

The Jackpot Blitz electronic gaming table in action. Source: Jackpot Digital.

The first installation of land-ready Jackpot Blitz machines is now completed at the Jackson Rancheria Casino in California, as the company announced today. The three-machine installation marks a new era of growth for the company, having announced 25 Blitz deals since November 2021 (slide 12), with many more across Canada and the United States in the works, in addition to a strong pipeline in Asia and Europe.

“Jackpot Digital could be a profitable company right now if it only focused on care and maintenance of the revenues it currently generates. But that’s not why we’re here,” Mathieu McDonald, Vice President of Corporate Development at Jackpot Digital, said in a recent interview with Stockhouse. “We intend to scale up to many multiples of the tables we have out right now, with the potential for up to 2,000 tables over the next three to five years.”

According to McDonald, the company is fielding three to five inquiries per week about the Blitz from casinos around the world that recognize the machines’ first-mover advantage in dealerless poker and potential expansion into other games in need of automation.

Jackpot Digital’s ambitious plan of action is supported by a management team of proven gambling, finance, advertising and legal professionals, many of which have been serving Jackpot stakeholders for more than two decades.

A long-tenured management team

The management team behind Jackpot Digital is led by Jake Kalpakian, who has served as president and chief executive officer since 1999, including under the gambling technology stock’s former incarnation as Las Vegas From Home.com Entertainment Inc. Kalpakian brings more than 30 years of experience managing small-cap publicly listed companies, granting him a steady hand when it comes to maneuvering through the volatility of the economic cycle.

Kalpakian’s efforts are supported by three directors whose well-rounded expertise positions Jackpot Digital for long-term sustainable growth:

Gregory T. McFarlane, a director at Jackpot Digital since 1999, previously ran an independent advertising firm and holds a degree in mathematics from the University of Toronto. McFarlane is also a co-founder of the popular Control Your Cash personal finance website. Chief financial officer Neil Spellman, a director at the company since 2002, boasts an almost two-decade track record as vice president at Wall Street firm Smith Barney, where he developed a multi-industry understanding of the journey to profitability. Finally, Alan Artunian, a director since 2017, currently serves as CEO of Nice Guy Holdings, a corporate and legal consulting company advising clients across a diversity of sectors.

Guided by a strategic management team, and benefiting from a macro-trend toward casino automation, Jackpot Digital is on course to ride a wave of millions of gamblers looking for an elegant, tech-informed alternative to traditional in-person play.

A multi-bagger opportunity

The Jackpot Digital opportunity sets up savvy investors who recognize the soundness of the company’s value proposition. The tremendous risk/reward value of Jackpot Digital gives investors the opportunity to ride the macro-trend toward casino automation, as deals for the Blitz keep pouring in, the company adds games to its portfolio, and the global casino industry adds hundreds of billions in revenue through this decade.

Join the discussion: Find out what everybody’s saying about this gambling technology stock on the Jackpot Digital Bullboard.

This is sponsored content issued on behalf of Jackpot Digital, please see full disclaimer here.

The post This gambling tech stock is future-proofing the world’s casinos appeared first on The Market Online Canada.

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International

Gates-backed PhIII study tuberculosis vaccine study gets underway

A large study of an experimental vaccine for the world’s biggest infectious disease has finally kicked off in South Africa.
The Bill & Melinda Gates…

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A large study of an experimental vaccine for the world’s biggest infectious disease has finally kicked off in South Africa.

The Bill & Melinda Gates Medical Research Institute (MRI) will test a tuberculosis vaccine’s ability to prevent latent infections from causing potentially deadly lung disease. Last summer the nonprofit said it would foot $400 million of the estimated $550 million cost of running the 20,000-person Phase III trial.

It’s a pivotal moment for a vaccine whose origins date back 25 years when scientists identified two proteins that triggered strong immunity to the bacterium that causes tuberculosis. A fusion of those proteins, paired with the tree bark-derived adjuvant that helps power GSK’s shingles shot, comprise the so-called M72 vaccine.

Thomas Scriba

After decades of failures in the field, the vaccine impressed scientists in 2018 when GSK found that it was 54% efficacious at preventing lung disease in a 3,600-person Phase IIb study.

But the Big Pharma decided that a full-blown trial was too expensive to conduct on its own. Gates MRI stepped in to license the vaccine in early 2020, right before the Covid pandemic shifted global vaccine priorities towards the coronavirus, further stalling the tuberculosis shot.

“There’s been frustration that it’s taken so long to get this trial up and running,” Thomas Scriba, deputy director of immunology for the South African Tuberculosis Vaccine Initiative, told Endpoints News last summer.

At last, the vaccine is getting a chance to prove itself in a bigger study. If successful, it could lead to the first new shot for tuberculosis in over a century.

Emilio Emini, CEO of the Gates MRI, told Endpoints that the initial results may come in roughly four to six years. “Hopefully this will galvanize a refocus on TB,” he said. “It’s been ignored for many, many years. We can’t ignore it anymore.”

A substantial impact

Even though an existing vaccine helps protect babies and children against severe tuberculosis, the bacterium responsible for the disease still causes roughly 10 million new cases and 500,000 deaths each year.

Emilio Emini

By vaccinating adolescents and adults who test positive for infections but don’t have symptoms of lung disease, the Gates MRI hopes the shot will help prevent mild infections from becoming severe ones, curtail transmission of the bug, which is predominantly driven by people with lung disease, and reduce deaths.

“The impact would be substantial,” Emini said. But he cautioned that the biology behind mild and severe diseases is still mysterious. “The reality is that no one really knows what keeps it under control.”

The study, which will take place at 60 sites across seven countries, will include some people who are not infected with tuberculosis to ensure that the vaccine is safe in that broader population.

“Having to pre-test everybody is not going to make the vaccine easy to deliver,” Emini said. If the vaccine is ultimately approved, it will likely be used in targeted communities with high tuberculosis, rather than across a whole country, he added. “In practice, you would immunize everybody in those populations.”

Emini described the Gates MRI’s rights to the vaccine as “close to a worldwide license.” GSK retained rights to commercialize the vaccine in certain countries but declined to specify which ones.

A spokesperson for GSK said that the company “has around 30 assets under development specifically for global health … none of which are expected to generate significant return on investment.”

“It is not sustainable or practical in the longer term for GSK to deliver all of these alone. So we continue to work on M72, but in partnership with others,” the spokesperson added.

If the shot works, Emini said that the Gates MRI will sublicense it to a manufacturer that will be responsible for making and marketing the vaccine. The details are still being worked out, he noted.

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