Top Managed Futures News, Listings, Member Posts, Managed Futures Daily Indices and more!

3yrs ago Managed Futures blog.pricegroup Views: 357

Iran is defying U.S. sanctions and is daring anyone to do something about it. The apparent election of Joe Biden seems to be emboldening the Iranian regime into thinking that under Joe Biden, it will be back to business as usual. Why have regard for the law when you know that your bad behavior will not be punished. Iran already is pushing its reset button with the U.S. as it expects that Joe Biden will reenter the Iranian Nuclear accord. No word as to whether they are expecting new suitcases of cash like they had last time, but I would not be surprised. Iran is sending its biggest fleet yet of tankers to Venezuela in defiance of U.S. sanctions to help the isolated nation weather a crippling fuel shortage, according to people with knowledge of the matter according to Bloomberg.

Bloomberg says that a flotilla of about 10 Iranian vessels will also help export Venezuelan crude after discharging fuel, the people said, asking not to be named because the transaction is not public. Bloomberg says that the “Nicolas Maduro regime is widening its reliance on Iran as an ally of last resort after even Russia and China have avoided challenging the U.S. ban on trade with Venezuela. The country’s fuel crunch follows decades of mismanagement, corruption, and under-investment at state-owned Petroleos de Venezuela since the time of Maduro’s late mentor and predecessor, Hugo Chavez.

The losers of course are the Venezuelan people. Allowing Iran to continue to enable this corrupt regime is a real shame. This government has stolen their dignity and their future. Iran is already getting geared up to its days before the Trump crackdown that will allow them to go back to spreading havoc in the region.

S&P Global Platts reports that OPEC oil output hit 24.54 million barrels a day six month high. The increase was not a big surprise to market watchers, and as expected, the return of Libyan oil led to the rise. Yet also a marked increase by the UAE raised some eyebrows. S&P Global Platts said that while the UAE continued to observe strong compliance, their production in November saw a significant 90,000 barrel per day increase as it closed the books on the additional so-called “compensation cuts” that it owed for violating its quota earlier this summer.

Rising OPEC output and more concerns about lockdowns are weighing on oil even as supplies globally tighten and hopes that a vaccine is on the horizon. Vaccines are already being administered in the UK and the US should not be too far behind. Oil technically is still in an uptrend and to get to the next level it will need help from US refiners. The market will look and refinery throughput for signs that indeed a bottom is in. Drops in Cushing Oklahoma supply this week suggests that refineries might be finally ramping up. That should help oil test near $50 before the end of this month.

Refiners will ramp up as margins are improving. We have seen a big rebound in RBOB and Distillate prices and that is reflecting a tighter market. This week I am looking for a make-up 4-million-barrel crude oil draw. I am looking for a 1-million-barrel boost in gasoline supply and a 2-million-barrel increase in distillate. Refinery runs should be up by 1.0 %.

 Bloomberg News reports that ” For years, the world’s largest oil trading firm has maintained that it has “zero tolerance” for corruption.”  Now Vitol Inc. has admitted that it was paying bribes through a network of shell companies and sham contracts. As recently as July 2020, while publicly repeating those assurances, Vitol was bribing government officials in Ecuador and Mexico. In Brazil, a Vitol executive delivered cash to traders at Petroleo Brasileiro SA and in exchange for the “gold number” — the price at which Vitol should bid to win tenders from the Brazilian state oil company.

The revelations, from a deferred prosecution agreement between Vitol Group’s U.S. unit and the Department of Justice, are part of Brazil‘s so-called Carwash bribery scandal, that’s described by the Petrobras chief as “an MBA in corruption.” They are a setback for all commodity traders, undermining efforts to cast off a reputation for malfeasance that is dogged the industry since the days of Marc Rich, the pioneer who spent two decades as a fugitive from American justice.

Agreeing to pay just over $160 million to regulators in the U.S. and Brazil, Vitol admitted to having bribed government officials for more than a decade, between 2005 and 2020, DOJ documents show.

“We understand the seriousness of this matter and are pleased it has been resolved,” said Russell Hardy, Vitol’s chief executive officer. “We will continue to enhance our procedures and controls.” The company paid more than $8 million in bribes to Petrobras executives between 2005 and 2014, according to the DOJ documents. In exchange, officials from the Brazilian oil company gave the trading house valuable information about its tenders, including the price of the highest bid from competitors.

That meant Vitol could bid for Petrobras’s oil products at exactly the price that it knew would win. Within the trading house, this was referred to as the “gold number,” according to the DOJ documents. In internal emails between the Vitol traders, information from the Petrobras officials was marked “PRIVATE AND CONFIDENTIAL_PLEASE”, according to a separate order from the Commodity Futures Trading Commission.

Petrobras has said it is the victim of crimes unveiled by the Carwash probe and is cooperating with investigations. On one occasion, in early 2013, an executive at Vitol in Brazil emailed his colleague in Houston the exact price that one of the trading house’s competitors was bidding for a cargo of high-sulfur diesel, according to the DOJ documents. “This is the gold number,” he said. “Okay great…we’ll take it,” replied the trader.

The mechanisms Vitol used for paying bribes were hardly revolutionary. Vitol SA, the Swiss unit that handles a large portion of the company’s trading, sent money to intermediary companies via bank accounts in the U.S., Curacao, the Cayman Islands, the Bahamas, Portugal, and Brazil. On some occasions, the money was then converted into Brazilian currency by a “doleiro,” a professional money launderer, before being delivered in cash to a Petrobras trader, according to the DOJ documents. Vitol and the individuals involved in the scheme created fake invoices showing the payments were for consulting services and “market intelligence.” The traders communicated using codenames, including “Batman,” “Tiger,” “Phil Collins,” “Dolphin,” “Popeye,” and “Beb.”

“Shell/offshore companies, fake consulting contracts, fake invoices, sham email accounts — nothing is new under the sun,” said George Voloshin, director for corporate intelligence and investigations at Aperio Intelligence. “The tricks of the trade have changed little from the previous century.” Industry Scrutiny

Authorities in the U.S. and Brazil are also investigating Vitol’s rivals, Glencore Plc and Trafigura Group Ltd., on similar allegations. Brazilian prosecutors last week filed a civil lawsuit against Trafigura and several of its top executives, alleging it also paid bribes to Petrobras executives. Trafigura said it hired the law firm Quinn Emanuel Urquhart & Sullivan LLP to review the allegations. So far, the firm’s investigators believe “any allegations that current management were involved in, or had knowledge of, alleged improper payments to Petrobras are unsupported by the evidence and untrue.”

Glencore, the world’s biggest metals trader, declined to comment. It has previously said it is cooperating with the Brazilian investigation. A Must Read on Bloomberg.
Thanks,
Phil Flynn

 Natural gas crashed on weather but looks overdone. Buy calls 
Invest in yourself today! Tune into the Fox Business Network Invested in you!

 Call to get in on the Phil Flynn Daily Trade Levels and Exclusive content! Call 888-264-5665 or email me at [email protected]


Today's Managed Futures Headlines:

Log In for More
Access Over 250K+ Industry Headlines, Posts and Updates
Not a member yet?

Join AlphaMaven

The Premier Alternative Investment
Research and Due Diligence Platform for Investors

Free Membership for Qualified Investors and Industry Participants
  • Easily Customize Content to Match Your Investment Preferences
  • Breaking News 24/7/365
  • Daily Newsletter & Indices
  • Alternative Investment Listings & LeaderBoards
  • Industry Research, Due Diligence, Videos, Webinars, Events, Press Releases, Market Commentary, Newsletters, Fact Sheets, Presentations, Investment Mandates, Video PitchBooks & More!
  • Company Directory
  • Contact Directory
  • Member Posts & Publications
  • Alpha University Video Series to Expand Investor Knowledge
  • AUM Accelerator Program (designed for investment managers)
  • Over 450K+ Industry Headlines, Posts and Updates
ALL ALPHAMAVEN CONTENT IS FOR INFORMATIONAL PURPOSES ONLY. CONTENT POSTED BY MEMBERS DOES NOT NECESSARILY REFLECT THE OPINION OR BELIEFS OF ALPHAMAVEN AND HAS NOT ALWAYS BEEN INDEPENDENTLY VERIFIED BY ALPHAMAVEN. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. THIS IS NOT A SOLICITATION FOR INVESTMENT. THE MATERIAL PROVIDED HEREIN IS FOR INFORMATIONAL PURPOSES ONLY. IT DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY INTERESTS OF ANY FUND OR ANY OTHER SECURITIES. ANY SUCH OFFERINGS CAN BE MADE ONLY IN ACCORDANCE WITH THE TERMS AND CONDITIONS SET FORTH IN THE INVESTMENT'S PRIVATE PLACEMENT MEMORANDUM. PRIOR TO INVESTING, INVESTORS ARE STRONGLY URGED TO REVIEW CAREFULLY THE PRIVATE PLACEMENT MEMORANDUM (INCLUDING THE RISK FACTORS DESCRIBED THEREIN), THE LIMITED PARTNERSHIP AGREEMENT AND THE SUBSCRIPTION DOCUMENTS, TO ASK SUCH QUESTIONS OF THE INVESTMENT MANAGER AS THEY DEEM APPROPRIATE, AND TO DISCUSS ANY PROSPECTIVE INVESTMENT IN THE FUND WITH THEIR LEGAL AND TAX ADVISERS IN ORDER TO MAKE AN INDEPENDENT DETERMINATION OF THE SUITABILITY AND CONSEQUENCES OF AN INVESTMENT.