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Oil Stocks, Market Direction, Bitcoin, Minerals, Gold, Silver - Technical Trading <--- Chris Vermeulen & Gareth Soloway weigh in

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Has Oil Lost Its Upside Momentum?

By Alex Kimani - Apr 27, 2022, 6:00 PM CDT

  • Weaker demand fundamentals have dampened upside momentum for crude oil.
  • Declining volatility and narrower intra-day trading ranges point at slowing bullish momentum for crude.
  • Standard Chartered: lockdowns in China will dent oil demand in April and May, but may not last much longer.

Anyone banking on more upside momentum for oil prices may be disappointed going forward, with a holding pattern now being determined by rising concerns over demand coupled with releases from strategic petroleum reserves. 

Oil prices have fallen particularly sharply over the past week as traders worry that China’s oil demand will take a big hit from reinstated lockdowns.

Brent blend for June delivery fell USD 10.84/bbl w/w to settle at USD 102.32/bbl, while WTI for June delivery fell USD 9.07/bbl to USD 98.54/bbl. Values were more robust along the curve, with Brent for delivery five years out falling just USD 1.44/bbl w/w to USD 72.70/bbl. 

The fall in prices gained pace on 25 April after testing of Beijing residents began following COVID cases being reported in the Chaoyang district of the city.

While volatility in the energy markets remains high, there are signs that it’s declining, with intra-day trading ranges also trending lower. Front-month Brent appears to be in the latter stages of its third wave since Russia’s invasion of Ukraine. The amplitude of the waves from low to high is declining; the first wave spanned USD 43 per barrel; the second USD 23/bbl, and the third USD 14/bbl. The dampening of the cycles is mirrored in smaller intra-day trading ranges; there were 14 days in March with an intra-day trading range of more than USD 8/bbl, but there has been just one so far in April.

And now, commodity analysts at Standard Chartered are warning that fundamental risks are skewed toward a market surplus, adding that traders should be cautious about short-term price rallies and should instead maintain long exposure in the middle and back of the price curve.

Demand Hit

According to StanChart, lockdowns are likely to dent China’s oil demand by 1.1mb/d in April. However, the decline is expected to only last a few months, with China’s demand growth expected to come in lower by only 78 thousand barrels (kb/d) by July.

However, the experts have cautioned that any extension of area-wide lockdowns would likely extend negative demand effects into Q3, increase the Q2 demand loss and take the annual demand growth forecast into negative territory.  Related: Bearish Momentum Grows, But Traders Remain Bullish On Crude

The global oil markets are currently dislocated, with crude flows having to be redirected and with shortages of specific oil products in specific locations--most particularly diesel in NW Europe. That said, StanChart says the market is not in an overall deficit and could even record a small surplus in April. The balance, however, looks tighter in Q3 and beyond, with the fall in China’s demand expected to be transitory while the decline in Russian oil output persists. The bank’s projected Q3 deficit of 0.9 million barrels per day (mb/d) is small enough to be filled by further increases in OPEC output and by a continued deceleration in oil demand growth as global economic growth weakens.

The latest EIA weekly data was highly bullish according to our US oil data bull-bear index, which rose 49.8 w/w to +63.4 (see China crude imports to remain low as demand falls). Crude oil inventories fell 8.02 million barrels to 413.73 million barrels, leaving them 79.28 million barrels lower y/y and 71.61 million barrels below the five-year average. The w/w fall in crude oil inventories was 10.4 million barrels relative to the five-year average and 10.2 million barrels relative to the pre-pandemic 2015-19 average. The w/w change in the crude oil balance was dominated by a 2.09mb/d increase in crude oil exports to 4.27mb/d, just 192kb/d less than the all-time high. The overall w/w change in the balance was 2.486mb/d in the direction of lower inventories. The EIA estimate of crude oil output rose 0.1mb/d to a 23-month high of 11.9mb/d.

The U.S. oil rig count rose by a single rig w/w to a two-year high of 549 according to the latest Baker-Hughes survey, and the gas rig count also gained a single rig to a 30-month high of 144. The largest rise in oil activity was recorded in the Bakken region of North Dakota and Montana, where the rig count gained two to 35. Activity in the Permian was unchanged at 332 rigs; among the Permian sub-basins, Delaware Basin activity rose by one to 172 rigs, Midland Basin activity fell by one to 130 rigs, and other Permian activity was unchanged at 30 rigs.

The latest EIA Drilling Productivity Report estimates that 433 wells were completed in the Permian Basin in March, a two-year high and still comfortably ahead of the 363 new wells drilled. The number of drilled-but-uncompleted wells (DUCs) in the Permian fell by 71 m/m (5.1%) to a five-year low of 1,309 in March, while DUCs in other regions fell by 43 (1.4%) to 2,964. The report made some significant downward revisions to Permian oil liquids output, with the March total revised 163kb/d lower to 4.975mb/d. The EIA expects Permian output to rise 82kb/d m/m in May to 5.137mb/d, with the total across the regions covered expected to rise 133kb/d to 8.649mb/d.

Overall, the bulls still have the upper hand.

The distribution of the bull-bear index has been skewed to the bullish over the past year: there have been 31 bullish, 12 bearish, and nine neutral readings. The skew is particularly pronounced in the tails, i.e., the ultra-bullish or bearish (weakest and strongest 5%), and the highly bullish or bearish readings (the next 10% in each tail). There has not been an ultra-bearish reading in the past year (the last one was 91 weeks ago), whereas there have been four ultra-bullish readings. There has only been one highly bearish data release over the past year, while the latest week’s reading is the 10th highly bullish release over the same period.

By Alex Kimani for

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Exxon And Chevron Post Blockbuster Earnings As Oil Prices Soar

By Tsvetana Paraskova - Apr 29, 2022, 10:00 AM CDT

  • ExxonMobil and Chevron both miss consensus estimates.
  • Exxon doubled earnings to $5.5 billion for Q1.
  • Exxon is now tripling its share repurchase program up to a total of $30 billion through 2023.
  • Chevron reported adjusted earnings of $6.5 billion for Q1

U.S. supermajors ExxonMobil and Chevron reported on Friday strong earnings for the first quarter as oil and gas prices surged after Russia invaded Ukraine.

ExxonMobil (NYSE: XOM) doubled its earnings to $5.5 billion for Q1 compared to the same period of last year, despite a $3.4 billion after-tax charge related to its decision to exit the Russia Sakhalin-1 project.

Still, Exxon’s earnings per share, excluding identified items of $2.07, missed the consensus estimate in The Wall Street Journal of $2.23.

Earnings excluding identified items stood at $8.8 billion, an increase of more than $6 billion versus the first quarter of 2021, the supermajor said. Free cash flow jumped to $10.843 billion from $6.909 billion for the first quarter last year.

Production in the Permian came in at 560,000 barrels per day (bpd) at the end of the quarter, and the company remains on track to deliver a production increase of 25% this year versus full-year 2021, and to eliminate routine flaring by year-end, Exxon said.

After doubling earnings, Exxon is now tripling its share repurchase program up to a total of $30 billion through 2023.

Chevron (NYSE: CVX), for its part, reported adjusted earnings of $6.5 billion, or $3.36 per diluted share, for first quarter of 2022. That’s more than triple the adjusted earnings of $1.7 billion for the first quarter of 2021, and the highest quarterly earnings for Chevron since 2012.

Chevron’s adjusted per share earnings also missed the $3.41 analyst expectations in the Journal.

Yet, free cash flow surged to $6.1 billion, from $2.5 billion for the first quarter of 2021.

Chevron reported record production in the Permian, at 692,000 barrels of oil equivalent per day in the first quarter, and raised its 2022 guidance to 700,000 - 750,000 bpd, an increase of over 15 percent from 2021.

“Chevron is doing its part to grow domestic supply with U.S. oil and gas production up 10 percent over first quarter last year,” Mike Wirth, Chevron’s chairman and chief executive officer, said in a statement.

By Tsvetana Paraskova for

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Edited by Tom Nolan

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Natural Gas and Oil price forcasts are in this episode, along with many other commodities, stocks, crypto and bonds.

KITCO NEWS  - Monday May 2nd, 2022

'Nastiest storms coming'; Market wipeout is next, Gareth Soloway predicts winners and losers


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Upstream Oil Industry To See Highest Profits Ever In 2022

By Rystad Energy - May 03, 2022, 9:00 AM CDT

  • Total free-cash-flow from E&Ps  soared from $126 billion in 2020 to almost $500 billion in 2021.
  • Rystad: the current financial health of public upstream operators is at an all-time high.
  • Rystad: total free-cash-flow could total as much as $834 billion in 2022.

Public exploration and production (E&P) companies are on track to shatter previous record profits this year as high oil and gas prices and surging demand drive financial success. Rystad Energy research shows that total free cash flow (FCF)*, a company’s cash from operations after accounting for outflows and asset maintenance, will balloon to $834 billion, a 70% increase from the $493 billion profits in 2021. Total FCF from public E&Ps fell to around $126 billion in 2020 as a result of the Covid-19 pandemic and the ensuing oil price collapse, halving the prior year’s total. As the global economy rebounded and fuel demand increased, last year’s FCF levels surged to nearly $500 billion, the highest profits ever for the upstream industry.

“The current financial health of public upstream operators is at an all-time high. Still, the good times are set to get even better this year, thanks to a perfect storm of factors pushing profits and cash flow to another record high in 2022,” says Espen Erlingsen, Rystad Energy’s head of upstream research.

The main contributing factor to these glowing financials is sustained high oil and gas prices. With average Brent oil prices estimated at $111 per barrel in 2022, a Henry Hub gas price at $4.2 per thousand cubic feet (Mcf) and a European gas price of $25 per Mcf, total FCF for public upstream companies will reach $834 billion this year.

Related: Buffett Is Betting Big On Oil And Gas Stocks


However, it is not just record high FCF on the table for public upstream operators. Cash from operations** is also expected to rocket this year, breaking the $1 trillion threshold for the first time. The $1.1 trillion projected annual total is a 56% jump from 2021 levels of $719 billion, which was the highest yearly total since 2014.

Cash from operations is typically used to fund new investments and financial costs, such as debt payments and dividends. In 2020, cash from operations dropped by almost $200 billion, or around 35%, implying that companies had less money to finance new activity and issue payouts to their owners. As a result, investments also dropped in 2020, falling by almost $100 billion or around 30%.

Despite the robust growth in cash from operations, investments are not expected to grow significantly this year, inching up to $286 billion from $258 billion in 2021. The investment ratio*** shows the disparity between record cash flow and profits, and the portion of those windfalls that are reinvested. This ratio has fluctuated during the past decade, averaging around 72%. This year, however, the projected investment ratio is expected to plunge to 26%, the lowest since the early 1980s.

The meager investment ratio and soaring FCF indicate that public E&P companies will have significant cash available to pay down debt or fork out dividends to shareholders. Much of last year’s profit was spent on reducing debt, which has left upstream operators in a very healthy financial position. The upshot of this is that a significant portion of the vast profits anticipated this year will likely be paid out to shareholders.

How the operators stack up


Almost all the large public E&P companies will have an investment ratio between 20% and 30% in 2022. US independent Occidental Petroleum has the lowest ratio of about 20%, while US major ExxonMobil is expected to see the most significant increase in FCF in 2022, growing by about $18 billion. Compatriot independent Hess is an outlier among these companies with an investment ratio of around 45%, due to the company’s plans to ramp up investments in Guyana and the core US shale patch of the Bakken.

*FCF includes all cash flows from upstream activity. It does not include cash from financing or hedging effects.

**Cash from operations is calculated as revenue minus operational costs and government take.

***Investment ratio is calculated as investments divided by cash from operations.

By Rystad Energy

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Gold: Powell’s Remarks Just Dovish Enough to Chase Out Weak Shorts

Published: May 5, 2022, 01:25 CDT3min read
Gold prices are likely to be capped unless the economy weakens so much the Fed has to pull back the reins on further rate hikes.

Gold futures are edging higher early Thursday as short-sellers continue to cover positions after U.S. Federal Reserve Chair Jerome Powell softened his tone about a series of aggressive rate hikes for the year.

Powell’s comments didn’t change the trend to up, but what they did was encourage bearish traders, perhaps looking for rate hikes as high as 75-basis points, to aggressively cover positions.

Generally speaking, as long as the Fed is raising rates, gold is going to have a hard time changing its trend to up. This could happen, however, in a couple of months if inflation continues to surge or if the Fed’s rate hikes trash the country’s economic recovery, forcing the Fed to become less-aggressive.

At 05:43 GMT, June Comex gold futures are trading $1901.90, up $33.10 or +1.77%. On Wednesday, the SPDR Gold Shares ETF (GLD) settled at $175.81, up $1.72 or +0.99%.

What Did the Fed Do and What Did Powell Say to Shake Up the Gold Market?

The Federal Reserve increased its benchmark interest rate by half a percentage point, in line with market expectations. In addition, the central bank outlined a program in which it eventually will reduce its bond holdings by $95 billion a month. The rate hike was the largest since 2000 and was designed as an aggressive response to burgeoning inflation pressures.

Gold prices firmed after the Fed raised rates and released its monetary policy statement because those moves were telegraphed for weeks.

What triggered the short-covering rally were Fed Chairman Jerome Powell’s comments that underlined his commitment to bring inflation down while indicating that raising rates by 75 basis points at a time “is not something the committee is actively considering.

Market Mechanics: Lower Yields, Lower Dollar Lead to Higher Gold Prices

High yields and a stronger U.S. Dollar have been driving gold prices sharply lower for weeks. So it nearly goes without saying that a drop in yields and the dollar would push prices higher. This is what happened Wednesday afternoon.

The 10-year Treasury yield turned lower Wednesday after Powell indicated the central bank won’t get even more aggressive in raising rates. After essentially getting ahead of the Fed, Treasury bond sellers and U.S. Dollar buyers had to make adjustments to their positions to price in the new information.

Consequently, gold traders covered some of their short positions since lower bond yields make zero-yield bullion more attractive by lowering its opportunity cost. Furthermore, falling rates made the U.S. Dollar a less-attractive investment and made dollar-denominated gold more attractive to foreign buyers.

Short-Term Outlook

We could see a near-term short-covering rally in gold because of the fresh news, but I don’t expect to see a major change in the trend because the U.S. economy is still strong and the Fed is going to continue to raise rates at future meetings until inflation gets under control.

Powell said, the American economy is very strong and well-positioned to handle tighter monetary policy. Adding that he foresees a “soft or softish” landing for the economy despite tighter monetary policy.

Given this assessment, gold prices are likely to be capped unless the economy weakens so much the Fed has to pull back the reins on further rate hikes. But it may takes months before we even know that.

In the meantime, traders are going to have to monitor data on housing, job growth, and wage increases to ascertain whether the Fed has to get more- or less-aggressive with its rate hikes.

For a look at all of today’s economic events, check out our economic calendar.

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U.S. Oil Firms Generate Highest Cash Flows Since 2014

By Tsvetana Paraskova - May 05, 2022, 10:30 AM CDT

U.S. public oil producers saw their combined cash from operations hit $27.5 billion in the fourth quarter of 2021, the largest quarterly figure since the third quarter of 2014, the Energy Information Administration (EIA) said on Thursday. 

The rising crude oil prices in the latter part of last year helped the 42 listed oil firms that the EIA included in its analysis to significantly increase cash from operations, as well as capital expenditures. Capex at the companies jumped by 60% quarter over quarter to $15 billion in the fourth quarter of 2021, according to EIA’s analysis of the published financial reports of 42 public oil producers. 

Despite the higher capex in Q4, crude oil production was still trending 10% below the record levels seen just before the start of the pandemic. 

WTI Crude prices averaged $77 per barrel in the fourth quarter of 2021, up by 82% compared with the same quarter of 2020. Production, however, has not grown in response to the much higher oil prices, the EIA said, noting that a shortage of rigs and crews to bring wells online were two of the constraints to a significant increase in drilling activity. 

In addition, U.S. producers focused on completing drilled-but-uncompleted wells (DUCs), which resulted in the fewest number of DUCs in the U.S. oil-producing regions in March 2022 since May 2014. 

The drilling of new wells needs more capital expenditure and hiring rig crews and services providers that are currently in short supply amid bottlenecks in the shale patch. As a result, U.S. tight oil production is not rising as fast as in previous upcycles, and surely not as quick as the Biden Administration wants as it looks to lower the highest gasoline prices in America in eight years. 

All forecasts point to U.S. oil production rising this year compared to 2021, but growth will likely happen at a slower pace than expected a few months ago. Capex discipline from the largest shale firms, supply chain bottlenecks, and labor shortages will cap U.S. oil production growth, industry executives say.

By Tsvetana Paraskova for

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It may take far longer till this kind of War ends. 

The boycott is not working. As example Greek Oil tankers took 190 full loads from Russian Ports to Europe's. Russian companies ordered the Tankers and they are free to deliver in every Port.

There is enough income for the Russian Government

Today Russian Soldiers clean up the Mess in Ukrainian, the Ukrainian Army was not seen there. They even have time to produce Street signs in Russian language for Mariupol.

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12 hours ago, Starschy said:

It may take far longer till this kind of War ends. 

The boycott is not working. As example Greek Oil tankers took 190 full loads from Russian Ports to Europe's. Russian companies ordered the Tankers and they are free to deliver in every Port.

There is enough income for the Russian Government

Today Russian Soldiers clean up the Mess in Ukrainian, the Ukrainian Army was not seen there. They even have time to produce Street signs in Russian language for Mariupol.

what is the name of the news streets???? Admiral Makarov Boulevard  ???? Moskova Avenue????


Edited by notsonice

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U.S. Shale Swings From Losses To Record Cash Flows

By Tsvetana Paraskova - May 08, 2022, 6:00 PM CDT

  • U.S. shale focuses on returning capital to shareholders in 2022.
  • Deloitte: the shale patch is on track for massive free cash flows of a combined $172 billion in 2022 alone.
  • Several large shale producers aren’t boosting production in 2022.

After years of plowing money into boosting production and thus depressing oil prices, the U.S. shale patch emerged from the pandemic-inflicted slump with unwavering capital discipline which, combined with $100+ oil, is paying off with record cash flows for American oil producers. The largest shale producers have left years of bleeding cash behind, focusing on returning capital to shareholders from the record cash flows they have been generating for several months now. As they report first-quarter figures these days, public companies vow continued disciplined spending and only modest production growth as “drill, baby, drill” is no longer shale’s primary goal. 

Investors, in turn, are rewarding the discipline—most of the 20 top-returning firms in the S&P 500 year to date are oil companies, including Occidental, Coterra Energy, Valero, Marathon Oil, APA, Halliburton, Devon Energy, Hess Corporation, Marathon Petroleum, ExxonMobil, ConocoPhillips, Chevron, Schlumberger, EOG Resources, and Pioneer Natural Resources. 

As a result of the highest oil prices since 2014 and capex discipline, the shale patch is on track for massive free cash flows of a combined $172 billion in 2022 alone, per Deloitte estimates cited by Bloomberg. By 2020, the shale industry had booked $300 billion in net negative cash flow in the 15 years since the first shale boom, Deloitte estimated back then.

Unlike in the previous upcycles, U.S. producers are now directing a large part of the record cash flows to boost shareholder returns with higher dividends, special dividends, and share buybacks. 

U.S. producers do not plan to abandon the newly-found capital discipline and will grow production only modestly, the top executives at most public shale producers said during the Q1 earnings calls this week. Many firms acknowledged the supply chain, inflationary, and labor constraints that could result in slower American oil production growth than the increase the EIA and analysts expect. Producers are also wary of the Biden Administration’s calls for only a short-term ramp-up in production amid otherwise negative comments on the oil industry, which undermines the firms’ visibility and willingness to plan higher investments in the medium term.  

“To say bluntly, the administration's comments are certainly causing a lot of uncertainty in the market, both in the terms of regulatory taxation, legislation, and negative rhetoric toward our industry. And that creates uncertainty in our owners', our shareholders' minds about what the future of this industry really is,” Diamondback Energy’s CEO Travis Stice said on the earnings call this week. 

Diamondback Energy will keep its current oil production levels of 220,000 net barrels of oil per day, Stice said.

“While we believe that efficiently growing our production base is achievable over the long term, we do not feel that today is the appropriate time to begin spending dollars that would not equate to additional barrels into multiple quarters from now,” he added. 

Another producer, Devon Energy generated $1.3 billion of free cash flow for the first quarter, its highest-ever quarterly FCF.  

“With this increasing amount of free cash flow, our top priority is to accelerate the return of capital to shareholders,” CFO Jeff Ritenour said.

Continental Resources “delivered a record quarter of adjusted earnings per share and exceptional free cash flow generation,” CFO John Hart said as the shale giant announced a fifth consecutive increase to quarterly dividend.

Chesapeake Energy, which went through a bankruptcy during 2020, reported $532 million in adjusted free cash flow for Q1, its highest quarterly FCF ever, and launched a $1-billion share and warrant repurchase program. 

Pioneer Natural Resources, for its part, will be returning 88% of its first-quarter free cash flow of $2.3 billion to shareholders, while keeping disciplined oil growth of up to 5%, CEO Scott Sheffield said. 

Related: Germany Will Have First LNG Import Capacity By Year’s End

It was Sheffield who said as early as in February: “Whether it's $150 oil, $200 oil, or $100 oil, we're not going to change our growth plans.” 

In Pioneer’s earnings call this week, Sheffield said that U.S. shale would likely grow less than the EIA and other analysts expect, which would put upward pressure on oil prices. 

“What’s happening now in regard to labor constraints, frack fleet constraints, inflation constraints - I just think it’s going to be tough to hit some of the numbers. It even makes me even more bullish about some of the oil price numbers that are out there,” Sheffield said, as carried by Reuters. 

Sheffield sees U.S. oil production growing by 500,000 bpd-600,000 bpd this year, compared to EIA and other estimates of 800,000 bpd-1 million bpd growth. 

Added to operational constraints and capital discipline is the industry’s frustration with the Biden Administration, which producers say has singled out oil firms to blame for the highest gasoline prices in eight years, while calling for a short-term jump in production. Democratic lawmakers even said last week they would propose legislation to allow state and federal agencies to “go after” oil companies. Senate Majority Leader Chuck Schumer compared oil firms to “vultures” booking record profits and using the COVID and Ukraine tragedies for market manipulation.

“Talk about mixed messages. We can’t treat the oil and natural gas industry as a kind of light switch that is turned on or off to suit the political moment,” American Petroleum Institute (API) President and CEO Mike Sommers said this week. 

“It can be easy and fashionable to speak as if we hardly even need oil or natural gas anymore. But then disruptions occur, and once again everybody is staring down the truth. Now, suddenly, some policymakers want to flip the switch “on” again, but only for a short time. And as practical realities intrude, mostly what we hear from Washington is blame-shifting and excuses,” Sommers added.

By Tsvetana Paraskova for

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Has Oil Found A Bottom At $100?

By Irina Slav - May 10, 2022, 6:00 PM CDT

  • Despite some recent volatility sparked by China’s COVID lockdowns, oil prices may have found a bottom.
  • Russia shed half a million barrels daily in March and an estimated 1 million barrels daily in April under the weight of the Western sanctions.
  • The lost oil supply could worsen in the coming weeks, and many analysts are predicting that much of Russia’s lost supply may never come back online.

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Oil Tanker Stocks Get Hammered In Market-Wide Selloff

By Alex Kimani - May 10, 2022, 5:00 PM CDT

  • Tanker stocks have fared worse than other energy stocks during the market-wide selloff.
  • Year-to-date, ocean shipping stocks are still outperforming broader equity indexes and domestic transport stocks.
  • Clarksons Platou Securities: spot rates for modern very large crude carriers have fallen to just $8500 per day.

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