rounded corner
rounded corner
top border

China’s Minsky Moment. The Energy Report 10/20/17

Bookmark and Share

Is China headed for a ‘Minsky moment? One Chinese economist has warned that they could and that warning, along with some comments from a Russian oil company, seemed to slow what had been oil impressive oil rise ahead of today’s November Future expiration.

Reuters wrote an article quoting a ”veteran but outgoing governor of China’s central bank “ that was warning of the dreaded “Minsky moment”, a reference to excessive optimism about economic growth fueled by vast debt and speculative investment that was coined after 1998 Russian financial crisis the last time that oil was near a major bottom.  In other word’s he is a warning of irrational exuberance, to steal a phrase from former Fed Chair Alan Greenspan as Chins, economic optimism recently has been strong. A sharp drop in the Chinese economy would be a concern for oil as the crash in oil to the recent $26 a barrel area in 2016 was caused by Chinese economic jitters that seemed to go away. If they reemerge those worries could sink oil but recent Chinese economic data would seem to dispute those fears. A report that a comment from an unnamed Russia oil official brought down prices but it looks like OPEC and Non-OPEC will extend production cuts. Mainly because Russia and Saudi Arabia wants them.

Reuters reported that Russian President Vladimir Putin said on Thursday that coordinated efforts taken by Saudi Arabia, Russia and other leading oil producers have borne fruit and led to oil prices rising to above $50 per barrel, which is a “fair” level. “We have coordinated our position with the OPEC countries… and the price has been stable at over $50. We consider this to be a fair price, which suits us,” Putin said at a forum with scholars.

Despite weakness going into the November expiration the fundamentals for oil are very strong. Not only did we have a big drop in U.S. oil production last week we had a major drawdown in supply. Global demand is the strongest it has been in years and despite fears that shale oil producers will come back on-line soon the reality is that shale oil output is peaking.

Plus you have geopolitical risk going into the weekend. Reuters reported that “oil supplies that flow from Kurdistan, in northern Iraq, through Turkey fell to around 196,000 barrels a day on Thursday, compared with a usual supply of around 600,000 barrels a day”, according to Dutch bank ING Group . “A prolonged disruption to this supply could tighten the oil market in Europe,” analysts at ING said.

They also reported that the head of the Organization of the Petroleum Exporting Countries said Thursday that there is “no doubt the oil market is rebalancing at an accelerated pace.” Speaking to a gathering of oil industry executives and experts in London, OPEC Secretary General Mohammed Barkindo insisted that cartel’s plan to cut output and rein in the global supply glut was paying off.
Phil Flynn
Questions? Ask Phil Flynn today at 312-264-4364

View The Energy Report

A Subsidiary of Price Holdings, Inc. – an Employee Owned Diversified Financial Services Firm. Member NIBA, NFA

Past results are not necessarily indicative of future results. Investing in futures can involve substantial risk of loss & is not suitable for everyone. Trading foreign exchange also involves a high degree of risk. The leverage created by trading on margin can work against you as well as for you, and losses can exceed your entire investment. Before opening an account and trading, you should seek advice from your advisors as appropriate to ensure that you understand the risks and can withstand the losses.

The information and data in this report were obtained from sources considered reliable. Their accuracy or completeness is not guaranteed and the giving of the same is not to be deemed as an offer or solicitation on our part with respect to the sale or purchase of any securities or futures. The Price Futures Group, its officers, directors, employees, and brokers may in the normal course of business have positions, which may or may not agree with the opinions expressed in this report. Any decision to purchase or sell as a result of the opinions expressed in this report will be the full responsibility of the person authorizing such transaction. Reproduction and/or distribution of any portion of this report are strictly prohibited without the written permission of the author. Trading in futures contracts, options on futures contracts, and forward contracts is not suitable for all investors and involves substantial risks. ©2017


I am out of office today again but will be in Monday. Email me if you need me. Stay tuned to the Fox Business Network the only place where you get the Power to Prosper!  MoneyShow Orlando is coming Call for detail  888-264-5665 or email me Get my daily trade levels for all major markets.

Recent articles from this author

About the author

Mr. Flynn is one of the world's leading energy market analysts, providing individual investors, professional traders, and institutions with up-to-the-minute investment and risk management insight into global petroleum, gasoline, and energy markets.

Phil Flynn's accurate and timely forecasts have come to be in great demand by industry and media worldwide. His impressive career goes back almost three decades, gaining attention with his market calls as writer of “The Energy Report”.

He is a daily contributor to Fox Business Network where he provides daily market updates and analysis. Phil’s daily commentary is also featured in Futures Magazine, International Business Times, Inside Futures, 312 Energy, Enercast, among many others.

Phil is a lifelong resident of Illinois. He attended Daley College in Chicago before beginning his career on the trading floor of the Chicago Mercantile Exchange which eventually led him and his team to The PRICE Futures Group.

Media highlights include: The President of the United States, Bloomberg, ABC, CBS, NBC´s "Today Show" and "Nightly News with Tom Brokaw", CNBC, CNN/CNNfn, FOX´s "O´Reilly Factor", PBS´s "The Newshour with Jim Lehrer" and "Nightly Business Report", MSNBC´s "The News with Brian Williams", The Wall Street Journal, Business Week, Investor´s Business Daily, The New York Times, The Los Angeles Times, Chicago Tribune, Associated Press, The Toronto Globe & Mail, Houston Chronicle, Futures Magazine, Inside Futures, and National Public Radio.

Contact Phil Flynn: (800) 769-7021 or at

Published by Barchart
Home  •  Charts & Quotes  •  Commentary  •  Authors  •  Education  •  Broker Search  •  Trading Tools  •  Help  •  Contact  •  Advertise With Us  •  Commodities
Markets: Currencies  •   Energies  •   Financials  •   Grains  •   Indices  •   Meats  •   Metals  •   Softs

The information contained on is believed to be accurate but is not guaranteed. Market data is furnished on an exchange delayed basis by Data transmission or omissions shall not be made the basis for any claim, demand or cause for action. No information on the site, nor any opinion expressed, constitutes a solicitation of the purchase or sale of any futures or options contracts. is not a broker, nor does it have an affiliation with any broker.

Copyright ©2005-2019, a product. All rights reserved.

About Us  •   Sitemap  •   Terms of Use  •   Privacy Policy