(Bloomberg) — Oil clung to losses after U.S. government data showed the first crude stockpile gain in four weeks, adding to concerns over a demand recovery with stimulus talks in limbo.

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Futures in New York fell as much as 3.4% on Wednesday. An Energy Information Administration report showed domestic crude inventories increased 501,000 barrels last week, while supplies at the nation’s biggest storage hub at Cushing, Oklahoma, climbed to the highest level since May.

At the same time, U.S. President Donald Trump’s decision to suspend fiscal relief talks until after the election is casting further doubt on energy demand bouncing back amid the pandemic. Reopening plans around the world are being thrown into question as global cases top 35 million.

This ended a trend of “fairly large declines,” said Rob Thummel, a portfolio manager at Tortoise, a firm that manages roughly $8 billion in energy-related assets. “There continues to be uncertainty associated with domestic demand and the need for fiscal stimulus to continue to boost the economy and correspondingly boost demand for crude oil.”



chart: U.S. crude inventories rise for the first time in four weeks


© Bloomberg
U.S. crude inventories rise for the first time in four weeks

Oil’s retreat follows two sessions of gains, lifted by a workers’ strike in Norway and Hurricane Delta spurring Gulf of Mexico operators to shut output. Still, without a U.S. virus relief package, the demand outlook has only become dimmer. Governments around the world are trying to control the spread, with Brussels and Bucharest becoming the latest European capitals to impose restrictions on nightlife.

Trump in a series of Tuesday-night tweets called on Democrats to pass standalone bills. While House Speaker Nancy Pelosi signaled openness to a standalone airline relief bill in a telephone conversation with Treasury Secretary Steven Mnuchin on Wednesday, it is a far cry from the Democrats’ $2.2 trillion

We have been particularly bullish on the iShares Silver Trust ETF (NYSEARCA:SLV) in recent months after the massive policy from the Fed in response to the COVID-19 macro shock. In this regard, we have not been disappointed by the substantial appreciation in SLV – SLV rose as much as 120% from its mid-March low to its year YTD high established in August.

Source: Bloomberg, Research

The iShares Silver Trust ETF

SLV seeks to track the performance of silver spot prices by physically holding silver bars in England or New York.

The physically-backed methodology used by SLV prevents investors from getting hurt by the current contango structure of the COMEX silver forward curve (forward>spot) contrary to a futures contract-based methodology.

Its expense ratio is 0.50% per year.

SLV has come under renewed downward pressure since it reached its highs since April 2013 earlier this summer. In this note, we investigate whether SLV can go back up to its previous YTD high, and if so, how fast.

Source: Bloomberg, Orchid Research

To answer these questions, we investigate the positioning in the silver market because the fluctuations in SLV in the short-term tend to be highly driven by sentiment and thus changes in positioning.

The recent behavior of silver prices suggests that prices are more sensitive to changes in investor sentiment (via ETF investors) than changes in speculative sentiment (via non-commercials on the COMEX). To illustrate our point, we construct a joint plot, which allows us to illustrate the bivariate relationship between the CME silver price (USD/ounce) and positioning (i.e. the net speculative length held by non-commercials in contracts) since 2015. We perform a linear regression and compute the R-squared to assess the explanatory power of spec positioning and ETF positioning.

Source: Orchid Research

As can be seen below, the R-squared resulting from

Many Bitcoin owners have adopted a “Play dumb and hope for the best” strategy when it comes to taxes. But now that strategy—never a great idea at the best of times—is riskier than ever in light of a proposed change to next year’s tax forms.



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The Internal Revenue Service revealed the change in a preview of the Form 1040 that every American uses to file their federal income tax. Now, right at the top of the form, below the address line, is a new yes/no question that asks if the filer has acquired an interest in virtual currency:



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The proposed IRS change comes as the agency continues to ramp up scrutiny of Bitcoin and other cryptocurrencies. In some cases, the focus of the IRS has been criminal activity involving digital currency, while in others the agency has sought to identify those who fail to report profits from trading.

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While millions of Americans own cryptocurrency accounts, a relatively small portion of them have reported income from them. In a lawsuit with cryptocurrency giant Coinbase, for instance, the IRS testified that only 807 individuals reported Bitcoin-related transactions in 2015.

In the last three years, Coinbase and other exchanges have provided more tax reporting tools but the number of filers remains relatively small. The owner of a firm specializing in crypto taxes told the Wall Street Journal that he estimates fewer than 150,000 crypto owners filed returns last year.

According to the Journal, which first reported the new IRS form, the change to the 1040 amounts to laying “a trap” for those who would feign ignorance of the reporting requirements—and is similar to approach the agency took to forcing Americans to disclose overseas income.

The aggressive new tactic by the IRS is