OIL: Venezuela Tanker Update
Dec-24 18:17
The USCG’s pursuit of the Venezuela-linked sanctioned oil tanker Bella 1 since Dec. 21 has been stymied by a lack of a USCG special unit, according to a Reuters source. Meanwhile, a 27-year old “zombie” ghost fleet tanker is headed to Venezuela, per Bloomberg
- Bella 1 - the vessel which the USCG has been chasing since Dec. 21 - has refused to let USCG board. But the USCG, the US agency that can lawfully board and seize ships, currently does not have the resources to forcibly board until the proper team arrives, according to Reuters.
- "There are limited teams who are trained for these types of boardings," said Corey Ranslem, chief executive of maritime security group Dryad Global and previously with the USCG, which “highlights the mismatch between the Trump administration's desire to seize sanctioned oil tankers near Venezuela and the limited resources of the agency that is mainly carrying out operations,” put the Reuters exclusive story.
- The USCG has historically been stretched thin across a wide range of responsibilities, including maritime safety and drug interdiction. "The Coast Guard is in a severe readiness crisis that is decades in the making," testified USCG-head Admiral Kevin Lunday in front of Congress in June of this year. "Our Coast Guard is less ready than in any other time in the past 80 years since the end of World War Two.
- While the US tries to enforce its blockade of Venezuela, a unique type of ghost fleet vessel is heading to relieve PDVSA of a looming storage crisis.
The 27-year old “zombie” vessel, Freesia I, has taken on the identity of a known ship that has been scrapped.
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SECURITY: Americans Sceptical Of Trump's Military Campaign Against Venezuela
Nov-24 18:06
US President Donald Trump’s formal designation of Venezuela’s Cartel de los Soles as a foreign terrorist organisation takes effect today, escalating tensions between the US and Venezuela and granting the US government “a whole bunch of new options” to confront narco-terrorist groups, per Bloomberg.
- Reuters reports the US is “poised to launch a new phase of Venezuela-related operations in the coming days,” but Reuters was not able to establish the exact timing or scope of the new operations, nor whether a final decision to act had been taken. Reuters notes that two US officials said "covert operations would likely be the first part of the new action against [Venezuelan President Nicolas] Maduro."
- Semafor reports: “It’s unclear how the volatile Ukraine talks may connect to the escalation against Caracas, a Russian ally and major focus for US Secretary of State Marco Rubio, who is also involved in Kyiv-Moscow peace negotiations. The outcome of the twin crises could shape Rubio’s political future, analysts said.”
- A new CBS News/YouGov survey found that “Across party lines, big majorities say the administration needs to explain what the U.S. intends regarding any action, and that it has not done so clearly yet.”
- According to the survey, “…the idea of potential U.S. military action in Venezuela meets with widespread disapproval. It doesn't get overwhelming backing from Republicans either.”
Figure 1: US Military Action in Venezuela
Source: CBS News/YouGov
US TSYS/SUPPLY: Review 2Y Note Auction: Small Tail
Nov-24 18:04
- Tsy futures scaling off recent highs after the $69B 2Y note auction (91282CPL9) tailed slightly: 3.489% high yield vs. 3.487% WI; 2.68x bid-to-cover vs. 2.59x prior.
- Peripheral stats: Indirect take-up rises to 58.07% from 53.65% prior, directs rise to 30.74% vs. 34.77% prior, primary dealer take-up 11.18% vs. 11.58% prior.
- The next 2Y auction is tentatively scheduled for December 22.
FED: US TSY 2Y NOTE AUCTION: HIGH YLD 3.489%; ALLOTMENT 27.70%
Nov-24 18:02
- US TSY 2Y NOTE AUCTION: HIGH YLD 3.489%; ALLOTMENT 27.70%
- US TSY 2Y NOTE AUCTION: DEALERS TAKE 11.18% OF COMPETITIVES
- US TSY 2Y NOTE AUCTION: DIRECTS TAKE 30.74% OF COMPETITIVES
- US TSY 2Y NOTE AUCTION: INDIRECTS TAKE 58.07% OF COMPETITIVES
- US TSY 2Y AUCTION: BID/CVR 2.68
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