Tag Archives: oil

Oil Prices and Production: Danger vs. Opportunity

The Chinese word for crisis has two characters – Danger and Opportunity. When we see the collapse of oil prices from more than $100.00 per barrel down to $45.00, clearly we have a crisis in the energy sector. The US oil industry has been hit hardest. A year ago the shale oil fracking industry was the darling of investors. Now, share prices have plummeted, companies are cutting back expenses, budgets are getting slashed, oil rigs are being taken out of service and the stage is set for some shale companies to go belly up. Shale oil is highly capital intensive and these companies are highly leveraged with huge debt.Continue Reading

The Two Faces of Oil

Oil is a mysterious commodity. It trades with supply and demand numbers, yet it also trades with geopolitical events. It is an international commodity with each country buying or selling depending on their needs and domestic supply.Continue Reading

2015 – How is the World Doing?

It might be helpful to take a reading on various countries at the beginning of 2015 to help investors decide where to place their bets in the coming year. Some trends are affecting all major world economies while others are country specific.Continue Reading

How Producers and Suppliers are Coping with the Oil Crash

We all knew that there was an oil glut several months ago. US oil production is the highest in three decades. US crude stockpiles climbed 7.27 million barrels in the week ending December 19. This brought the gain to 387.2 million barrels. But the wild card was Saudi Arabia and OPEC. In previous periods of oversupply, OPEC has cut production. This time they dropped a bombshell and said NO to cutting production, that they would pump 30 million barrels per day. OPEC supplies 40% of the world’s oil. This caught the energy market by surprise. Where Brent crude was trading at $111.05 per barrel in June, it plunged more than 50% to $59.45 per barrel in the February futures contract. WTI crude closed at $54.73. The impact on producers and suppliers is creating a crisis of monumental proportions. Producers, oil- rig operators and manufacturers, refineries, and natural gas producers are all getting hit. The US dollar has been trending higher with a close on Friday December 26, of 90.31 for the March futures contract. Commodities usually take a beating with a stronger dollar. Let’s examine the impact of the oil crash on key oil exporting and importing countries.Continue Reading

Oil Price War – Saudis up Ante Cutting Prices Another $2.00 Per Gallon

The State owned company Saudi Aramco announced that it is cutting prices to a record low $2.00 per barrel discount to Asia, Europe and all grades of crude to US refineries. To reinforce Saudi Arabia’s vow to crush US oil shale producers, Saudi prince, Turki Al-Faisal said: “Saudi Arabia won’t give up oil market share at this time for anybody.”Continue Reading

URGENT-Check Your Energy Portfolio Now!

The OPEC decision not to cut oil production is a watershed event that will change the energy industry for years to come. OPEC Secretary General, Abdalla El Badri stated: “We will produce 30 million barrels a day for the next 6 months and we will watch to see how the market behaves.” Energy Minister, Suhail Al Mazrovei said: “Newcomers to the market who have the highest costs and created the glut should be the ones to determine prices.”Continue Reading

What Happened to the Oil Market?

While the focus has been on the Dow Jones Industrials and the S & P, there is another sea change taking place in the energy markets. This past summer the benchmark West Texas Intermediate (WTI) crude was trading near $107.00 per barrel. This past week we saw a low of $79.78 per barrel in the December futures contract, hitting a four year low.Continue Reading

Why are Oil Prices Falling in the Midst of Mid-East Chaos?

The oil market is one of the most illusive and difficult markets to understand. In past decades it was simple. OPEC controlled prices. When prices got too low, they cut production and prices rose. Now, however, we no longer have a single group in charge. The market is fraught with trends and counter trends that create confusion and places traders on edge. Just about a month ago, West Texas Intermediate (WTI), the US benchmark, was trading at $106-$107 per barrel. This Friday prices have dropped to $93.65 per barrel for October delivery. There are rumors of a price drop to $70-$80 per barrel.Continue Reading

US Grants Two Companies Permission to EXPORT Oil Products

Are you paying too much to fill up your car or truck? Don’t worry our government has the perfect fix to guarantee that prices will keep going higher. Yup, this week the government granted permission for two US oil companies to EXPORT OIL PRODUCTS. You read this right. The government gave two companies permission to EXPORT OIL PRODUCTS.
The two companies are Pioneer Natural Resources (PXD) and Enterprise Products Partners (EPD). The export numbers for this year are between 200,000 and 300,000 barrels, with exports set to double in 2015.Continue Reading

Where is the Price of Gold Headed?

The markets have turned in a strange performance over the past several weeks. The numbers on the economy came in weaker than expected with GDP down -.1% in April. Unlike other recoveries, spending growth has decelerated. Each year it takes a step down. This is not the way it should be. In all past recoveries, spending growth increased as the economy grew. Discretionary spending was up but 90% of that was due to inflation, especially in food and energy. Consumers are being forced to spend more. Our US deficit is running at about $17.3 trillion. The US Federal Reserve’s Balance Sheet has grown to $4.9 trillion. Surprisingly, the US stock market made a new all time high in the Dow and S & P. Gold, on the other hand, fell to its lowest level in the past 15 weeks.Continue Reading