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October 9, 2016

Sunday Sizzler Report

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The Venture Week In Review And A Look Ahead

TSX Venture Exchange, Gold & Overall Markets

Capping a strange week of trading across various markets from Gold to the British pound, the Venture showed strength Friday and stayed in positive territory the entire day despite a more than $20 reversal to the downside in Gold as the metal tumbled as low as $1,241.   That was a sign that Gold would probably recover and it did, finishing $17 above its morning low and snapping an 8-session losing skid with a slight gain for the day of $2 an ounce.

For the week, the Venture lost 19 points or 2.4% to finish at 781.  Gold fell 4.4% while the TSX Gold Index lost nearly 13%.  That kind of outperformance by the Venture should give Gold bugs a lot of comfort as the Venture, a reliable leading indicator, simply would have performed much worse if bullion were about to fall off the cliff.

While the Venture has been in a consolidation phase since its mid-August high of 848, keep in mind that in each and every bull market year going back to 2003, the Index has climbed powerfully from its 3rd quarter close to year-end.  Will the anticipated gains in Q4 be spread out over October, November and December, or are we headed toward some sort of remarkable surge during the last half of December after a much anticipated final Fed meeting of the year?  Anything is possible, especially during an unpredictable and unconventional U.S. election season.

Today’s Week In Review and A Look Ahead includes the best performers on the BMR Top Opportunities List over the last 3 weeks including Orca Gold (ORG, TSX-V) which enjoyed a surge in volume and price in recent days as Ross Beaty bought 13 million shares in the open market for a 12.4% interest in the company…

Click here to read the rest of today’s Week In Review And A Look Ahead, and learn more about where the Venture is headed in the coming weeks, with a risk-free Pro, Gold or Basic subscription featuring a 100% money-back guarantee, or login with your username and password.

October 7, 2016

BMR Morning Market Musings…

Gold has traded between $1,241 and $1,266 so far today on this “Jobs Friday”…as of 10:00 am Pacific, bullion is down just $2 an ounce at $1,253 as it fights to avoid a 9th straight losing session…Silver has added 10 cents to $17.38…Copper is up a penny at $2.16…Crude Oil has fallen 67 cents to $49.77 while the U.S. Dollar Index has eased off one-quarter of a point to 96.67 after pushing above 97.20 in early trading (strong resistance between 97 and 98)…

Even as Gold has fallen over the last week, holdings by exchange-traded funds have actually risen…this underscores how entrenched the ETF buying is – physical buyers aren’t about to be spooked – and how it will likely continue to help underpin the yellow metal…

There was a modest miss in today’s jobs report as the Labor Department announced that non-farm payrolls for last month came in at 156,000, almost 20,000 less than the consensus estimate, while the unemployment rate unexpectedly edged up one-tenth of a point to 5.0%…average hourly earnings matched expectations with an increase of 0.2% and an annualized rate of 2.6%…

Cleveland Fed President Loretta Mester, an FOMC voting member who has been arguing recently for a rate hike, told CNBC this morning that the government’s weaker-than-expected report for September was still strong enough to keep her thinking central bankers should increase rates.  “It’s a solid labor market report,” Mester said on ‘Squawk Box’.   “This is very consistent with what we expected to see.”

Meanwhile, Fed Vice President Stanley Fischer, who was musing over the summer about the possibility of two rate hikes before year-end, called this morning’s report close to a “Goldilocks” number…

Expect Fed hawks to push their case hard for a rate hike before year-end…whether the Fed ultimately pulls the trigger, however, is the big question, as their rhetoric has proven to mean little, and there are still multiple economic uncertainties at play plus an election to go through (in case didn’t see this reported by the liberal mainstream media, Bank of America Merrill Lynch warned clients this week of a potential recession as early as next year, should some of the firms’ economic indicators continue to decline)…

September’s jobs report may have modestly “missed the mark” but the CME’s Fed Funds futures tracker reflects a growing expectation among traders this morning for a December interest rate hike…again, we’ve seen that movie many times before…

Signs Of A Pick-Up In Asian Gold Buying

Demand for Gold in Asia edged up this week as prices hovered near their lowest since early June, while discounts in India narrowed the most in 8-and-a-half months as a fall in prices prompted buying during the festive season…the appetite for Gold in India typically strengthens in the last quarter as the world’s second-biggest consumer gears up for the wedding season as well as festivals such as Diwali and Dussehra…

Goldman Sachs today on what may spur buying in China during Q4:  “The potential drivers of increased Chinese physical buying include purchasing Gold as a way to hedge for potential currency depreciation in the face of capital controls, and purchasing Gold as a way of diversifying away from the property market, which has this year to date had a remarkable rally (with the government moving to rein in speculation and price growth).”

This week’s drop in Gold came, perhaps not coincidentally, as Chinese buyers were on the sidelines due to a week-long national holiday in that country…Chinese traders are back at their desks on Monday…

“Flash Crash” In British Pound

If you think the trading in Gold has been crazy this week, how about the action in the British pound overnight?…the currency suffered a jarring flash crash, nose-diving more than 6% against the dollar in a matter of minutes before recouping some of those losses…the shock came in early trading in Asia (interesting timing, manipulation?) and left investors and analysts blaming computerized programs for intensifying the dizzying drop…

The pound had already sunk to a fresh 31-year low of around $1.26 yesterday over deepening concerns that the U.K.’s split from the EU will hurt the country’s economy…strategists had widely forecast it would go lower, but not as rapidly as it did overnight…was a big market player making a very large move?…

“It was just another quiet day in Asia, and then, Bang! All the lights went red,” said Matt Simpson, senior market analyst at ThinkMarkets in Singapore…

Gold Secular Chart

This long-term chart for Gold, going back 3 decades, shows how bullion remains locked in “Wave 5” of a bull market that ultimately should produce similar gains to “Wave 1” and “Wave 3“…that means Gold during this cycle could push well past its 2011 peak of $1,924…

The pullback from the 2016 high of nearly $1,380 has brought RSI(14) back to the 50% level which may become new support, similar to what occurred in late 2001 after an initial spike…

Significantly, 2016 has witnessed the first bullish +DI/-DI cross in 15 years, marking a clear change in direction after a down wave intensified in 2013…sell pressure (CMF) has eased considerably this year but has yet to transition into buy pressure on this long-term monthly chart, meaning we’re still in the early stages of a prolonged move with $1,200 acting as the new floor…

gold-secular-oct-7

In Today’s Morning Musings…

1. Crude Oil and Africa Oil (AOI, TSX) updates…

2. Opportunity in a Venture “shell”…

3. Aerospace stock could be ready to “fly” in Q4…

4. Daniel’s Den – exploring the mentality of great traders and investors…

Plus more…click here to read the rest of today’s Morning Musings and all BMR exclusive content, through a risk-free Pro, Gold or Basic package, or login with your username and password…

SOLD! Harvest Natural Resources Pays 64% In 26 Days

As expected, thankfully, Harvest Natural Resources (HNR, NYSE) announced this morning that it has sold all of its Venezuelan Oil interests.

Time to lock in profits!

hnr-sold

As I outlined for BMR subscribers September 1 (“Sell the News“), the buyer, billionaire Oswaldo Cisneros, made all the difference in this deal.

Here’s an excerpt from the news release:

“At the closing, Harvest received $80 million in cash, a $12 million 6-month 11% note payable to Harvest by the purchaser, and cancellation of $30 million in debt owed by Harvest to CT Energy.  Harvest used part of this cash consideration to pay the remaining debt it owed to CT Energy and for other expenses and adjustments associated with the transaction.  Net cash proceeds received after paying the above closing adjustments and other expenses was $69.4 million.  Also at the closing, CT Energy relinquished its 8,667,597 shares of Harvest common stock, which will be held as treasury shares, and agreed to terminate the warrant, issued in June 2015, to purchase up to an additional 34,070,820 shares of Harvest common stock.  With the return of the shares held by CT Energy, Harvest now has 44,318,567 outstanding shares.

“After receiving payment of the purchaser’s note payable of $12.0 million less taxes, funding a reserve for potential change of control payments and working capital, the estimated cash remaining is expected to be $62 million.  Upon the potential exercise of vested options held by employees, the estimated outstanding shares of Harvest common stock is expected to be 48,693,768 shares.

“Going forward, Harvest’s primary tangible asset is its Oil and gas interests in Gabon.  Harvest has received two proposals for the purchase of its Gabon interests and is in discussions with both potential buyers; however, there can be no assurances that these discussions or either proposal may lead to a definitive transaction.”

HNR has traded as high as $1.04 this morning. Its cash position represents $1.27 per share.

Meanwhile, another one of our top Oil picks, Africa Energy (AOI, TSX), has enjoyed a great week with Crude prices pushing slightly above $50 a barrel.  As of 7:20 am Pacific, AOI is up 8 cents at $2.31 in its 8th consecutive “up” day.  John will have an updated chart on AOI in today’s Morning Musings.

About the writer:  Daniel T. Cook, the newest member of the BMR team, is from the great state of Texas.  Daniel has a strong passion for the junior resource sector and has followed the Venture and broader markets with great interest since he bought his first stock 18 years ago at the age of 12.  He’s also a licensed investment professional who was a Bright Future’s Scholar at the University of Central Florida, graduating in 2010 with a major in Finance.  We know our readers will enjoy his material and benefit from his wisdom and insight.  We welcome him aboard!

October 6, 2016

BMR Morning Market Musings…

Gold has traded between $1,251 and $1,269 so far today..as of 9:55 am Pacific., bullion is down $14 an ounce at $1,253…it’s Gold’s 8th straight day on the downside…Silver is off 46 cents at $17.27…Copper has slipped a penny to $2.15…Crude Oil has jumped 50 cents to $50.33 while the U.S. Dollar Index has added nearly half a point to 96.58…

The number of announced layoffs by U.S.-based companies rose in September to the highest level in 2 months, global outplacement consultancy Challenger, Gray & Christmas reported today…employers announced plans to cut more than 44,000 jobs last month, a 38% increase from August when total job cuts of just over 32,000 were the lowest since May…the report comes a day after ADP and Moody’s Analytics reported that companies in September created jobs at the slowest pace in 6 months…tomorrow, the Labor Department issues its closely watched non-farm payrolls report for September…economists might be optimistic, anticipating a gain of 175,000 jobs according to the median estimate of 100 economists polled by Reuters…the number could easily disappoint and that’s what may give Gold a lift to finish the week…mind you, an election is only a month away, so anything is possible…

Traders are pricing in close to a 65% chance of an interest rate increase in December after data this week showed that U.S. services sector activity rebounded to an 11-month high in September.  “People are coming to terms with an eventual rate rise, possibly this year,” said James Steel, a strategist at HSBC…

Dollar bulls, meanwhile, took comfort in this morning’s jobless claims report which put some fresh pressure on Gold…the Labor Department said first-time weekly jobless claims in the U.S. fell by 5,000 to a seasonally adjusted 249,000 during the week to Saturday…that was slightly better than expected and brought the 4-week moving average for new claims down to 253,500, the lowest level since December 8, 1973, when it was 252,250…

Total Global Debt Stands At $152 Trillion

The world is awash with $152 trillion dollars of debt, according to the IMF, an all-time high which sits at more than double the balance at the start of this century…this debt mountain, as of 2015, represents 225% of GDP, up from 200% in 2002 and signifies the extent to which increases in borrowing have outpaced economic growth during the period…

While the Washington D.C.-based organization emphasized that there is no exact science to knowing how much debt is too much (really?), it has urged governments in certain countries to tackle excessive private debt levels…that’s kind of funny, actually, considering governments can’t properly manage their own finances (taxpayers’ dollars)…governments account for about one-third of the world’s debt…

The IMF pointed to Europe as an example of where an impaired banking system was a hurdle to successful deleveraging…the organization also  singled out China as a country at risk of a disorderly wind-down of current high corporate debt levels…

global-debt

Oil Update

U.S. Crude rose above $50 a barrel for the first time since June today as WTIC was underpinned by a surprisingly large drop in U.S. inventory levels during the previous session…technically, $50 is key resistance for Crude…how soon it’s able to conquer that level will be fascinating to see…

Declining U.S. shale production has been a major contributing factor behind this year’s move toward global rebalancing in the Oil market, though the global market is still dealing with too much supply…BMI Research says it’s forecasting shale production to drop by 532,000 barrels a day in 2016…however, “production declines have begun to bottom out and we expect the sector to return to growth in 2017, adding 151,000 barrels a day,” the firm added…

In Today’s Morning Musings…

1. How Gold looks in Canadian dollars – valuable clues…

2. Our 6th ETF trade ALERT (5-for-5 so far)…

3. The growing interest in Cobalt…

4. Where’s there’s smoke, there’s fire – CXO identifies at least 6 mineralized trends at Inel…

5. Updates on WRR, ORG and CLE…

Plus more…click here to read the rest of today’s Morning Musings and all BMR exclusive content, through a risk-free Pro, Gold or Basic package, or login with your username and password…

October 5, 2016

BMR Morning Market Musings…

Gold has traded between $1,263 and $1,278 so far today after yesterday’s biggest single-day tumble in almost 3 years…as of 10:00 am Pacific, bullion is down $6 an ounce at $1,263…Silver is 21 cents lower at $17.56…Copper is flat at $2.16…Crude Oil has jumped $1.10 a barrel to $49.80 while the U.S. Dollar Index is flat at 96.14…

Several key factors influenced Gold’s dramatic drop yesterday, not the least of which was the general lack of Chinese buyers due to the week-long holiday in that country…Fed Bank of Richmond President Jeffrey Lacker, a non-voting Fed member, urged a rate hike to head off what he called a looming pickup in inflation (of course that has been an oft-repeated line from Fed members for a few years), and of course the mainstream media jumped all over that…as yields on 10-year Treasuries and German bunds rose, the Gold sell-off gathered steam…

Meanwhile, Bloomberg reported that the European Central Bank is said to be building an informal consensus to gradually wind down bond purchases (everything’s just peaches and cream all of a sudden in the EU?), while technical pressure added significantly to yesterday’s selling as soon as the metal breached $1,300 for the first time since June…Gold may have to test its rising 200-day moving average (SMA) around $1,250 before traders perceive that a bottom has been put in…$1,200 is viewed as the ultimate floor, but action since yesterday hasn’t altered Gold’s primary trend one bit…

Crude prices have firmed up again today after the Energy Information Administration reported that U.S. Crude inventories decreased by 3 million barrels, marking the 5th straight week of declines…

U.S. Jobs Growth Wanes But Other Data Exceeds Expectations

Factory orders and ISM non-manufacturing both came in better than expected this morning…however, U.S. companies in September created jobs at the slowest pace in 6 months according to a report from ADP and Moody’s Analytics…private payrolls increased by 154,000 for the month, the lowest total since April and below the 2016 average of 181,000…the total also missed expectations of 166,000 from economists surveyed by Reuters, and was below the downwardly revised 175,000 in August…the manufacturing sector continued its struggles, losing 6,000 jobs for the month…the numbers come two days before the closely watched non-farm payrolls report for September when the Labor Department is expected to report 175,000 new jobs for the month…

A private Texas company reported yesterday that it has made a large-scale discovery off Alaska’s North Slope (red meat for the Oil haters)…Dallas-based Caelus Energy Alaska LLC announced a find of 6 billion barrels of light Oil on its state leases in the Arctic Ocean waters of Smith Bay about 450 miles northwest of Fairbanks…COO Jim Musselman called the discovery exciting for the state, which receives a majority of its revenue from the Oil industry.  “It has the size and scale to play a meaningful role in sustaining the Alaskan Oil business over the next three or four decades,” Musselman said of the discovery in a prepared statement…the Smith Bay development could deliver 200,000 barrels per day of light Oil to the trans-Alaska pipeline, increasing volume and reducing the average viscosity of Oil, which would help extend its viability, the company said…

In Today’s Morning Musings…

1. What’s next for Gold?…

2. The “best case” and “worst case” near-term scenarios for the Venture (depending on your point of view)…

3. The opportunity in this 6-cent stock after traders “got it wrong” on a company’s news yesterday…

4. Breakout coming in this Oil play…

5. Update on the southern Labrador Trough…

6. Daniel’s Den – why did Orca Gold (ORG, TSX-V) buck the trend yesterday?…

Plus more…click here to read the rest of today’s Morning Musings and all BMR exclusive content, through a risk-free Pro, Gold or Basic package, or login with your username and password…

October 4, 2016

BMR Morning Market Musings…

A wild day for Gold as technical selling intensified after the yellow metal broke below $1,300 for the first time since Britain voted to leave the European Union…as of 8:55 am Pacific, bullion is down $36 an ounce at $1,276 in a healthy washout as it threatens to test its 200-day moving average (SMA) around $1,250…Silver has tumbled 80 cents to $17.99…Copper is off slightly at $2.16…Crude Oil is relatively unchanged at $48.88 while the U.S. Dollar Index has added nearly half a point to 96.20…

The pound fell to a 3-decade low against the dollar today, trading below the levels it hit after the Brexit vote…

Chinese markets are shut for national holidays until next Monday, meaning lack of Chinese participation has provided an ideal opportunity for powerful players to engage in some Gold price manipulation…

Famed investor Rick Rule on Gold:  “The catalyst for it going higher is simple: zero interest rates and negative interest rates,” the chairman of Sprott U.S. Holdings told Kitco News at the Mines & Money event. “Frankly, I think interest rates will be more important to the Gold market than either Clinton or Trump.”

Rule noted that the Fed is “trapped” and continues to be “addicted” to low rates, which will bode well for Gold…

Speaking of the U.S. election, it’s unfortunate that tonight’s Vice-Presidential debate between Republican Mike Pence and Democrat Tim Kaine won’t draw nearly the same viewership that the recent Trump-Clinton showdown did (their next battle is Sunday)…substantive policy issues should dominate the Pence-Kaine debate, given the nature of the two candidates, which should help to draw some clear distinctions on the major issues of the day…

Money Managers Upped Their Bets In Gold After Recent Fed Decision

The latest trade data shows that bullish speculative interest in Gold once again recently approached its all-time-highs after hitting its lowest point in 3 months…the latest COT data for the week ending September 27 showed money managers increased their speculative gross long positions in Comex Gold futures by nearly 15% while decreasing their short bets by almost 20%…this developed at the time of the Fed’s latest policy statement…how many money managers got spooked by today’s price action will be interesting to know when fresh COT data is available in a few days…

U.S. Mint Gold & Silver Sales Pick Up In September But Down Year-Over-Year

The U.S. Mint saw renewed interest in its Gold and Silver bullion coins with sales last month hitting their highest level since April…however, demand for physical precious metals was down compared to last year…according to sales data on its web site, the U.S. Mint sold a total of 67,500 ounces in various denominations of American Eagle and Buffalo Gold coins last month, an increase of 65% from August, but down more than 24% from September 2015…so far this year the Mint has sold 782,000 ounces of Gold, down from 840,500 ounces sold during the same time frame as last year…

The same trend can be seen in Silver demand…the Mint sold 1.675 million ounces of Silver last month, up nearly 24% from August but down almost 56% from September 2015…so far this year the Mint has sold almost 30.6 million ounces of Silver, down 15% from the total sold over the same 9-month period last year…

Pro-Pipeline First Nations Groups Speak Up

A groundbreaking conference in Calgary started yesterday and wraps up today…the “Pipeline Gridlock Conference” features members of Canada’s aboriginal business elite who are meeting for the first time to find ways to help improve dialogue on pipelines and support approvals…

Stephen Buffalo, President and CEO of the Indian Resource Council, the conference’s organizer, said the meeting is hopefully the first of many and aims to come up with recommendations for Prime Minister Justin Trudeau.  “We are depending on these pipelines for the success of the Canadian economy,” he said…

Trevor McLeod, director of the Centre for Natural Resources Policy at the Canada West Foundation, stated:  “There is a sense among a number of the First Nations leadership that they have been co-opted by environmental groups and that there is a need to stand up for their economic interest.  What distinguishes this from previous conferences and discussions is that some of the key First Nations leaders in Canada who have energy assets on their reserves and lands are stepping out and actually saying something, whereas typically they haven’t been keen to do so.”

Oil Drilling

Crude Oil Update

One of the top commodities’ analysts, RBC’s Helima Croft, told CNBC that her firm expects the OPEC pact to hold with a belief that the Saudis are willing to bear the lion’s share of the reductions needed to get down to 32.5 million barrels of Oil produced each day globally by OPEC members…

“This speaks to the economic realities of lower Oil prices that are really biting Saudi Arabia,” said Croft.  “Saudi Arabia really had to give considerable ground to accommodate the Iranian demands to get the deal done.  This is more than just a freeze. It’s actually cutting from current levels.”

“It (Crude Oil) can continue to be choppy based on weekly stats, rig count numbers and broader macro trends,” she added. “But we think we are done with sub-$40, barring a major macro meltdown panic, and firms the case for $50’s by year end and trending into the $60’s next year.”

In Today’s Morning Musings…

1. Wild trading action today in Cannabix Technologies (BLO, CSE)…

2. Two-cent stock comes out of long hibernation – a play to watch…

3. When is it time to jump in on this Gold stock ETF?…

4. Bayhorse Silver (BHS, TSX-V) update…

Plus more…click here to read the rest of today’s Morning Musings and all BMR exclusive content, through a risk-free Pro, Gold or Basic package, or login with your username and password…

October 3, 2016

BMR Morning Market Musings…

Gold has traded between $1,309 and $1,319 so far today…as of 10:00 am Pacific, bullion is down $5 an ounce at $1,311…Silver is off 29 cents at $18.86…Copper has retreated 2 cents to $2.18…Crude Oil is 25 cents higher at $48.49 while the U.S. Dollar Index has added one-tenth of a point to 95.69…

India’s Gold imports fell for a 9th straight month in September as weak retail demand and higher discounts prompted banks and refineries to cut overseas purchases according to provisional data released this morning by consultancy GFMS…India’s Gold imports in September are estimated at 30 tonnes, down 43% from a year ago…imports in the first 9 months of 2016 slumped 59% from the same period in 2015 to 268.9 tonnes…retail demand is expected to pick up in the coming weeks, however, as the country gears up for the wedding season as well as festivals such as Diwali and Dussehra when buying Gold is considered auspicious…much of India’s retail buying comes from rural areas which have also benefited from a good monsoon season…

October trading in equity markets could be interesting as history shows market volatility, as measured by the VIX (Volatility Index), has surged every October of a U.S. election year since 1992…

The “Quote of the Day” goes to Germany Economy Minister and Vice Chancellor Sigmar Gabriel who hit back at Deutsche Bank CEO John Cryan over the weekend for telling employees his bank was suffering from market speculation:  “I didn’t know whether I should laugh or be furious that a bank which turned speculation into a business model now declares itself the victim of speculators,” Gabriel told reporters…

Mixed economic data this morning:  U.S. construction spending fell in August for the second straight month to its lowest level in 8 months, an unexpected drop driven by weakness across public and private sectors…meanwhile, the ISM Manufacturing Index slightly exceeded expectations with a gain of 51.5 in September, up from a disappointing 49.4 in the prior month…”Jobs Friday” is coming up – won’t that be fun!…

Gold Seasonality Chart

Historically, going back 20 years, October is Gold’s second-worst month of the year with an average decline of 1.2%…the metal has pushed higher in October only one-third of the time over the last 2 decades…keep in mind, though, that March has also been a bad month for Gold but this year bullion bucked its historical trend in March with a strong performance…

gold-seasonality-oct-3

Nickel Supply At Risk

About a tenth of the world’s Nickel supply is at risk after the Philippines widened a crackdown on miners, raising the chances of prices rallying by another 25% through 2017, according to UBS Group which had already billed the metal as one of its favoured commodities…

As we explored in detail last Wednesday, the Nickel market is reeling after the radical Philippine government threatened to close another 14 mines last week, pending responses to an “environmental audit”…of 41 operations reviewed –  the majority of them Nickel-producing – about three-quarters have been halted or told they need to “get their acts together”…

That puts 55% of Philippine Nickel output, or 11% of global supply, at risk of exiting the market, according to UBS…shutdowns raise the chances of Nickel reaching $6 a pound, or $13,228 a metric ton, by the end of next year, analyst Daniel Morgan said on Friday…

“A supply cut of about 10% is a big cut in any commodity market,” he said. “In the short term, there is enough metal out there as a buffer for the next few months, so are the stainless-steel customers anxious? I would say not yet, but they will be in 2017. Our base case is heading toward $6 by the end of 2017 but there is every potential that a rally could go further.”

Oil Update

If there’s one overriding message from the Venture’s performance this year, it’s that commodity prices have bottomed and likely have a lot further to climb in this new cycle higher…from Oil to Gold to Nickel to Sugar, a broad range of commodities have “turned the corner” after a vicious bear market…

Last week’s OPEC agreement to work toward an official production cut at its November meeting is also a sign that the Saudis have changed tactics after deliberately pushing Oil lower starting in late 2014 in an effort to put the squeeze on competitors, including North American shale producers, and increase their own market share…

OPEC said it would cut output to between 32.5 million barrels per day (bpd) and 33 million bpd from about 33.5 million bpd, with details to be finalized at its November meeting…a Reuters’ survey Friday showed that OPEC pumped Crude in record amounts through September with last month’s output likely to reach 33.6 million bpd in from a revised 33.53 million bpd in August, its highest in recent history…

Oil Drilling

Can OPEC be disciplined enough to actually reduce production, especially if prices are trending higher?…

Will global growth pick up in 2017, as some are predicting, and give Oil demand a lift at the same time as the supply glut starts to shrink?…

Those are important fundamental questions that we’ll get answers to soon enough…

“OPEC has created its own Q4 risk to Oil prices,” stated Barclays in a recent note.  “In raising expectations of a November deal to cut production, it also risks a steep price decline should it fail to achieve its goal of cutting output back to less than 33 million bpd.”

Our favorite leading indicator for Oil prices is the Venture which flashed all sorts of signals in September/October 2014 that big trouble was on the way in the Oil sector…everything changed in February of this year, however, when the Venture finally reversed and started a new bull market…Oil prices would soon follow, and it appears they have a lot further to go which is not really the consensus forecast…

There were surprises to the downside in 2014 and 2015, so why isn’t it reasonable to expect surprises to the upside – especially when there’s evidence pointing in that direction?…this morning, we have a valuable new chart on Oil that could help make you a lot of money in the months ahead…

Technically, we’ve been bullish on the direction of Oil since February when we first recommended the HOU (TSX), the double bull Crude ETF…from a fundamental perspective, as Daniel has outlined, the key point to grasp is that “Cheap Oil” is merely an illusion based on the concept of “energy in” vs. “energy out”…

In Today’s Morning Musings…

1. Cannabix Technologies (BLO, CSE) explodes to new 52-week high…

2. Pure Gold (PGM, TSX-V) hits 104 g/t Au over 3 m at Madsen, more than 2 km south of the Madsen No. 2 Shaft…

3. Walker River Resources (WRR, TSX-V) bucks today’s weakness in Gold stocks…

4. Updated Silver chart explains current trading and what to expect…

5. Daniel’s Den – reiterating TAG Oil, plus 6 potential triggers for Gold…

Plus more…click here to read the rest of today’s Morning Musings and all BMR exclusive content, through a risk-free Pro, Gold or Basic package, or login with your username and password…

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