Submitted by Nick Cunningham via OilPrice.com,
The OPEC meeting is only a week away, but the chances of a positive result are as remote as ever. Rising oil prices, the heightened rivalry between Saudi Arabia and Iran, and Saudi Arabia’s willingness to go it alone will make a deal all but impossible.
On the heels of the 17-sigma beat in new home sales, pending home sales soared 5.1% MoM in April - 6.5 standard deviations above economist estimates of a 0.7% jump. Pending home sales rose for the third consecutive month in April and reached their highest level in over a decade, according to the National Association of Realtors. All major regions saw gains in contract activity last month (with The West surging 11.5% MoM) except for the Midwest, which saw a meager decline.
Best month since 2010...
Last week we put out a chart
that may have scared some investors. We stated that a gold pullback was
imminent and we could expect the Gold BUGS Index to lose another 14% in gold
miners before markets stabilize. In just three days, we have lost another 3% -
this rapid decline is unprecedented as investors were already hesitant about
golds enormous rally.
As we warned previously, the devaluation, or breaking of the Saudi Riyal peg to the dollar, could be the black swan event for crude oil and the recent weakness in SAR forwards - while not as violent as Nigeria's Naira - certainly signals a renewed market fear that breaking the peg is imminent.
We were surprised to hear none other than legendary bond investor Bill Gross, who made billions going long bonds, admit to Bloomberg's Erik Schatzker last night that he is starting to short credit, "a position that he said runs contrary to his instincts and training as an investor."