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OPEC January Crude Output Down 1,050,000 Bdl/Day to 28.565M

Feb 3 (Bloomberg) — Crude-oil production from the 12 OPEC members in January declined 1,050,000 barrels a day from December, the latest Bloomberg survey of producers, oil companies and industry analysts shows. Figures are in the thousands of barrels a day.

Opec Production
January 2009

Opec Country	Jan Est.	Dec. Monthly Output	Jan. 1 Change	Est. vs. Target*	Est. Target	Est. Cap. (@)
Algeria	1,275	1,330	-55	1,202	72	1,450
Angola	1,740	1,820	-80	1,517	223	2,000
Ecuador	475	500	-25	434	41	500
Indonesia*	-	-	-	-	-	-
Iran	3,800	3,850	-50	3,336	464	4,100
Iraq*	2,365	2,345	20	-	-	2,500
Kuwait#	2,280	2,350r	-70	2,222	58	2,650
Libya	1,630	1,660r	-30	1,469	161	1,800
Nigeria	1,810	1,900	-90	1,673	137	2,500
Qatar	725	790	-65	731	-6	900
Saudi Arabia#	8,025	8,400	-375	8,051	-26	10,800
U.A.E	2,290	2,350	-60	2,223	67	2,800
Venezuela	2,150	2,320	-170	1,986	164	2,500
Total OPEC-12	28,565	29,615r	-1050	—	—	34,500
Total OPEC-11*	26,200	27,270r	-1070	24,845	1,355	32,000

*Quotas effective Jan. 1, 2009. OPEC agreed at its Dec. 17 meeting in Algeria to cut its quota target by 2.463 million barrels a day from the previous level, to 24.845 million barrels daily from Jan. 1. The quota target excludes Iraq, which has no formal quota, and Indonesia which left OPEC at end-2008.

Totals rounded.
r = revised @ = Capacity attainable within 30 days and sustainable for 90 days.
# Includes Neutral Zone production shared equally between Saudi Arabia & Kuwait.

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Saudis will let production fall to levels consistent with their price target.

That’s what swing producers do.

Unless demand drops so far they can’t let output fall further.

So far independent world demand forecasts don’t show that happening.

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(email exchange)

Think of it this way.

1. Treasury spends $1 trillion by making deposits to bank accounts at the Fed. The spending adds $1 trillion of income and $1 trillion of new balances (not new balance shoes) that in the first instance are excess reserves at the fed.
2. Treasury offers treasury securities for sale at auction. The purchase of those securities reduces the new, excess balances at the Fed, and replaces them with treasury securities, which are in fact nothing more than different accounts at the Fed. So operationally the Fed debits bank accounts on its books and credits securities accounts on its books.
3. Again, the result is $1 trillion of new income and $1 trillion of new treasury securities held by the non government sectors.

Deficit spending adds exactly that much to our savings. The idea that ‘it has to come from somewhere’ and ‘borrowing removes savings’ are inapplicable with non convertibility currency/ floating FX policy.

If you count the new treasury securities as ‘money supply’ then it adds to money supply. If you don’t it doesn’t. Government spending is counted as GDP.

>   
>   On Feb 6, wrote:
>   
>   Question- Treasury needs to raise a trillion dollars to fund shortfall- so they
>   sell a trillion dollars of treasuries which Fed reserve bank buys and puts on its
>   balance sheet- what is the effect on economy? Money supply?
>   

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Running with tails cut off with a carving knife:

This is what you get when the head of the CB doesn’t understand monetary operations and reserves accounting:

Shirakawa Says BOJ to Limit Asset Buying to Save Balance Sheet

by Jason Clenfield and Toru Fujioka

Feb 5 (Bloomberg) — Bank of Japan Governor Masaaki Shirakawa said the central bank will limit its purchases of stocks and corporate debt to protect its balance sheet and the credibility of the yen.

“We are mindful of the need to eventually end the purchases” as they are “extraordinary measures,” Shirakawa told lawmakers in Tokyo today. Excessive buying would worsen the central bank’s balance sheet and “have a clear impact on the yen’s credibility,” he said.

This what you get when the Finance Minister, Deputy Party Chairman, and former Finance Minister don’t understand monetary operations and reserve accounting:

Nakagawa Says Japan Isn’t Considering Printing Money

by Keiko Ujikane

Feb 6 (Bloomberg) — Japan’s government isn’t considering printing new money, Finance Minister Shoichi Nakagawa said.

He was responding to a report in the Financial Times that ruling party lawmakers would today propose printing 50 trillion yen ($549 billion) of a new currency to be used to pay for stimulating the economy.

“The idea of the government printing money isn’t in my mind,” Nakagawa said at a press briefing in Tokyo today.

“Japan’s economy is worsening rapidly so some people are discussing various ways of financing business activities and daily life.”

Yoshihide Suga, deputy chairman of the ruling Liberal Democratic Party election strategy council, is among the group of politicians that will suggest using 30 trillion yen of the money on projects such as doubling the size of Tokyo’s Haneda airport, the Financial Times reported. The other 20 trillion yen would be for government purchases of stocks and real estate.

Bank of Japan Governor Masaaki Shirakawa said Feb. 3 such a plan would hurt the credibility of the yen and lead to an increase in long-term yields by raising concern about the government’s ability to pay back the debt.

Former Finance Minister Bunmei Ibuki, speaking at a meeting of ruling LDP factions, said currency printed by the government rather than the Bank of Japan would devalue the yen and invite inflation, according to the Yomiuri Newspaper.

Discussions about the printing the money weren’t in the public interest, Ibuki said.

This is what you get when the Prime Minister doesn’t understand monetary operations or reserve accounting:

Japan May Consider 50 Trillion Yen in Scrip, FT Says

by Dave McCombs

Feb 6 (Bloomberg) — An aide to Japan’s Prime Minister Taro Aso and some lawmakers will today propose printing 50 trillion yen ($549 billion) worth of a new currency to be used to pay for stimulating the economy, the Financial Times reported, citing Koutaro Tamura, an upper house Diet member.

Yoshihide Suga, deputy chairman of the ruling Liberal Democratic Party election strategy council, is among the group of politicians that will suggest 30 trillion yen of the scrip for programs for new industries and projects such as doubling the size of Tokyo’s Haneda airport, the report said. The other 20 trillion yen worth of the new currency would be allocated to government purchases of stocks and real estate.

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Looks like at least part of the plan is to push exports via lower prices.

China to Raise Export Rebate for Textiles to 15%, Xinhua Says

by Zhang Dingmin

Feb 4 (Bloomberg) — China will raise export tax rebates for textiles and garments to 15 percent from 14 percent, the Xinhua News Agency reported today, citing a meeting by the State Council.

The move was part of a plan to boost the textile industry, the official news agency said. The council also passed a plan to support the nation’s equipment manufacturing industry, it said.

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• Change in Nonfarm Payrolls (Released 8:30 EST)
• Change in Nonfarm Payrolls YoY (Released 8:30 EST)
• Nonfarm Payrolls ALLX (Released 8:30 EST)
• Unemployment Rate (Released 8:30 EST)
• Unemployment Rate ALLX 1 (Released 8:30 EST)
• Unemployment Rate ALLX 2 (Released 8:30 EST)
• Change in Manufacturing Payrolls (Released 8:30 EST)
• Change in Manufacturing Payrolls YoY (Released 8:30 EST)
• Average Hourly Earnings MoM (Released 8:30 EST)
• Average Hourly Earnings YoY (Released 8:30 EST)
• Average Hourly Earnings ALLX 1 (Released 8:30 EST)
• Average Hourly Earnings ALLX 2 (Released 8:30 EST)
• Average Hourly Earnings ALLX 3 (Released 8:30 EST)
• Average Weekly Hours (Released 8:30 EST)

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Karim writes:

Job losses picking up speed and hours worked continue to plunge.

• -598k job losses in January
• Benchmark revision for 2008, -400k
• Unemployment rate up from 7.2% to 7.6%
• Hours worked down another 0.7% (biggest driver of personal income)
• Augmented unemployment rate rises from 13.5% to 13.9% (was 8.7% in December 2007)
• Diffusion index down to 25.3 from 25.5 (only 2 sectors to add jobs were education, 54k, and government, 6k)

Change in Nonfarm Payrolls (Jan)

Survey	-540K
Actual	-598K
Prior	-524K
Revised	-577K

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Change in Nonfarm Payrolls YoY (Jan)

Survey	n/a
Actual	-3500.00
Prior	-2589.00
Revised	n/a

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Nonfarm Payrolls ALLX (Jan)

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Unemployment Rate (Jan)

Survey	7.5%
Actual	7.6%
Prior	7.2%
Revised	n/a

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Unemployment Rate ALLX 1 (Jan)

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Unemployment Rate ALLX 2 (Jan)

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Change in Manufacturing Payrolls (Jan)

Survey	-145K
Actual	-207K
Prior	-149K
Revised	-162K

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Change in Manufacturing Payrolls YoY (Jan)

Survey	n/a
Actual	-7.7%
Prior	-5.9%
Revised	n/a

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Average Hourly Earnings MoM (Jan)

Survey	0.2%
Actual	0.3%
Prior	0.3%
Revised	0.4%

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Average Hourly Earnings YoY (Jan)

Survey	3.6%
Actual	3.9%
Prior	3.7%
Revised	4.0%

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Average Hourly Earnings ALLX 1 (Jan)

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Average Hourly Earnings ALLX 2 (Jan)

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Average Hourly Earnings ALLX 3 (Jan)

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Average Weekly Hours (Jan)

Survey	33.3
Actual	33.3
Prior	33.3
Revised	n/a

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