Business

For the 11th week in a row, the number of US oil rigs rose (up 10 to 662 - the highest since September 2015). US Crude production continues to track the lagged rig count, pouring more cold water on OPEC's production cut party.

The rig count grows, tracking the lagged oil price in a self-defeating cycle...

And crude production appears to have plenty more room to run...

And don't forget, as Nick Cunningham detailed, there are thousands of drilled shale wells are sitting idle, unfracked and uncompleted.

Earlier this week we discussed the reason for the recent drop in iron ore prices, which had been attributed to the discovery of massive data fabrication and misrepresentation of commodity production cuts in China (think OPEC), whose biggest steel-producing province was found lying about mandatory output reductions, and instead of curbing was in fact accelerating production.

A steel factory in Wu'an, Hebei province

For months we've been talking about the massive lending bubble propping up the U.S. auto market.  Now, noting many of the same concerns that we've highlighted repeatedly, Morgan Stanley's auto team, led by Adam Jonas, has just issued a report detailing why they think used car prices could crash by up to 50% over the next 4-5 years. 

Here's the summary (flood of supply, poor lending standards and desperate OEMs who need to keep new car sales elevated at all costs):

Authored by Raul Ilargi Meijer via The Automatic Earth blog,

We are witnessing the demise of the world’s two largest economic power blocks, the US and EU. Given deteriorating economic conditions on both sides of the Atlantic, which have been playing out for many years but were so far largely kept hidden from view by unprecedented issuance of debt, the demise should come as no surprise.

Things are going from bad to worse in Brazil where, contrary to what the stock market suggests, the economy continues to disintegrate.