AMERICAS OIL: Newsom Proposes to Ease Permits for Oil Drilling in California
Jul-18 19:13
Newsom Proposes to Ease Permits for Oil Drilling in California - bbg
- California Governor Gavin Newsom is proposing a bill to streamline permitting for new oil wells, establishing “plug-to-drill” permitting until 2036 where two wells would have to be plugged and abandoned before a new one is drilled.
- In addition, drillers no longer would need well approval from the Geologic Energy Management Division, known as CalGem, so long as certain conditions are met.
- The draft bill text, seen by Bloomberg News and portions of which were leaked by environmental groups, is part of Newsom’s effort to approach the oil and gas industry after years of regulatory scrutiny.
- The governor has softened his approach after refineries operated by Phillips 66 and Valero Energy decided to shut operations in the state.
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FED: Powell Says Current Stance of Monetary Policy is in Good Place
Jun-18 19:11
- Powell shrugs off a question about why the Fed isn't cutting rates given recent data - the Chair notes that the labor market "isn't crying out for a rate cut" and that after an initial tariff shock, business sentiment suggests "it feels much more positive and constructive than it did three months ago". "Our current stance of monetary policy is in a good place"
- Asked about the FOMC's expectations for fiscal policy, Powell basically says the Fed doesn't think the legislation going through Congress will make much of a difference:
- "We take fiscal policy as fully exogenous" and they "didn't really talk" about the reconciliation bill going through Congress. Says the "effects will be at the margin" given "we have a very large economy", but that they may have more info by the next meeting (end-July) and "we'll make an estimate, but it's not a major thing."
FED: Powell Says Current Policy is Probably Modestly Restrictive
Jun-18 19:05
- On the shifts in the SEP's inflation forecasts:
- "We've learned that tariffs are going to be substantially larger than forecasters generally thought... what we learned, and particularly in April, was that substantially larger tariffs were coming and that would mean higher inflation. That's what happened. You saw 2.5% forecast in December. You say 2.8% in March and 3.1% now, six tenths higher for 2025. That's a big part of the change. And that's due to the effects of the tariffs. We don't know where they're going to land. But it's pretty apparent they're going to land higher than outside forecasters were guessing at the end of last year."
- Powell says of the current policy stance: "Policy is modestly or moderately, probably modestly restrictive. If you look at the economy it's not performing as though it were performing under very strict monetary policy, very restrictive. I would say modestly restrictive."
- Again he sounds patient on rate cuts given incoming data: "I think we can take the time to do [make a judgment] because unemployment is 4.2%. Wages are moving up. Real wages are moving up at a healthy clip now. And inflation is 2.3% headline [] over a 12-month basis. So it's a good economy and a solid economy with decent growth."
US TSYS: Chairman Powell Presser Ongoing, Rates & Stocks Extend Lower
Jun-18 19:02
- Treasury futures and stocks are extending lows as Chairman Powell's press conference continues.
- Tsy Sep'25 10Y futures currently -3 at 110-24 vs. 110-22.5 overnight low.
- Initial support to watch lies at 109-28, the Jun 6 / 11 low. A breach of this level would be bearish and open the bear trigger at 109-12+, the May 22 low.
- Curves steeper, 2s10s +1.414 at 44.697, 5s30s +0.263 at 90.075.
- Cross asset: Stocks trading lower now (SPX eminis -7 at 6035.25), Gold slipping lower at 3376.30, Bbg US$ index rebounds: 1210.77 +1.70.
