Commodity Trade Mantra

Posts Tagged ‘Natural Gas’

Can Crude Oil Prices Continue To Rally Like This?

Oil prices have bounced around a bit after last week but have held more or less in the range of $43 per barrel for WTI and $45 for Brent. The price gains over the past few weeks come as the fundamentals have improved. Oil production is expected to continue to fall through 2017 as too few new wells come online to replace rapidly falling shale output.

China And India Rewrite The Rules Of The Oil And Gas Game

Asian oil markets are in a tremendous period of flux. Both China and India are using the drop in oil prices and the existing oil gut to their advantage. New partnerships are being formed and steps are being taken, which undermine the erstwhile major players. Each crisis brings about a change, and the current one is shifting the power from the suppliers to the consumers.

Gold: Not Just Another Commodity, A Safe-Haven in Times of Uncertainty

Mainstream media pundits, economists, and journalists alike love to lump gold in with other commodities. They put it in the same category as oil, copper, wheat, natural gas, and other things that come out of the ground. Gold historically attracts capital flows in ways that these other commodities do not. Gold is a superior safe-haven asset to own in times of financial duress and uncertainty.

Do Rising Gold Prices Signal an End of the Commodity Bear Market?

Is gold leading the broader commodities sector higher? To reiterate though, the commodity bear is not over yet. But keep your eye out for signs that the trend is turning around. Getting in at the end of big bear markets is always the most profitable time to invest. The recent performance of gold stocks is firm evidence of this.

Support For OPEC Oil Production Cut Is Increasing

With Mexico, Russia & Saudi Arabia out of the picture, the question is: who is going to decrease their oil production? There is only one entity, and that is the U.S. shale producers. Thy won’t willingly reduce output, but due to the economics of the current oil price environment, many shale oil producers will face bankruptcy next year & as a result, will go out of business.

Classic Signs of a Bottom in Commodities Seen

Eleven commodities have fallen 20% or more. And seven commodities – oil, gasoline, coffee, oats, natural gas, lumber, and sugar – have fallen at least 30% in the last year. We’re not saying all commodity prices have bottomed. Some commodity prices could continue to go lower. But we do think it’s likely commodities as a group are close to a bottom.

Global Economic Fears Cast Long Dark Shadow On Oil Price Rebound

The global economic unease may begin to reach American shores. Although an economic slowdown is no doubt a negative for oil prices, the news could provide enough justification for the Fed to hold off on raising interest rates. A delay in a rate hike could likely push up WTI and Brent.

Can Crude Oil Prices Continue To Rally Like This?

Japanese inflation data mirrored that of Germany, and was flat MoM, with YoY inflation dropping to +0.2%. In terms of inflation, the US is in a similar position to both Germany and Japan, in that should oil prices stay around current levels, it will too see inflation data coming in as flat as a beaver’s tail by year-end.

Beware: Fracking Is Where Money Goes to Die

The fracking boom has been cash-flow negative for oil and gas drillers from the very beginning. The steep decline rates of fracked wells force producers to drill more wells just to keep production and revenues flat. They fund this drilling with debt. To support that growing debt, they have to produce more & take on even more debt.

What The Rig Plunge Really Means For The Price Of Oil

The market fails to appreciate that the relationship between rig count and oil production can be deceptive. Headline rig count declines may look impressive, but as we look at the data, much of the drop in oil rig count has come in low yielding rigs. The most productive rigs will likely remain as long as possible.

The Irony of a Debt-Fueled Oil Boom

The cash has already been drilled into the ground. Now it’s just a matter of getting the oil and gas out to service the debt. The more the price drops, the harder they have to try to increase production. This is the irony of a debt-fueled oil boom that turned into an oil bust: producers cannot back off regardless of how low the oil price may be.

The Federal Reserve and the Price of Oil

Domestic oil producers have a source for financing: the Fed. If you want to deploy the oil weapon, make sure you have a central bank that can intervene at will, in whatever size is necessary, to reduce the impact on your own economy, while maximizing the financial pain inflicted on the targets of the oil weapon.

The New Normal for Crude Oil?

With US shale being one of the main culprits of excess crude oil production, storage of crude in US markets have risen above seasonally adjusted highs in the last year. This abundance of stored crude has pushed the current spot price of crude oil toward five-year lows, as current demand is just not there to take on more crude production.

Not ‘Rushing in’ to Buy Oil Juniors for 5 or 6 Months : Rick Rule

A lower oil price might stimulate demand in the near term, as people have more money, thanks to lower gasoline & energy costs. This begins to seed the overall economy for a recovery – a real recovery unlike the manufactured ones, based on cheap credit in developed nations. In the near term, though, price decline may weigh on the economy.

The First Shale Casualty: WBH Energy Files For Bankruptcy; Many More Coming

American oil and gas companies have gone heavily into debt during the energy boom, increasing their borrowings by 55% since 2010, to almost $200 billion. Their need to service that debt helps explain why U.S. producers plan to continue pumping oil even as crude trades for less than $50 a barrel, down 55% since last June.

What America Does Not Understand About Russia & Oil

While successful this time around the Russian’s via Putin are more than able to cope with an oil rout for the near future. Already the devaluation of the Russian Rubble means that oil revenues will in fact be more in Rubles than last year since the devaluation is currently wider than the correction of the oil price itself.

Total War over the Petrodollar

The CEO of Total, before his death & his CFO were both strong supporters of Total raising the $27 billion in non US dollars & moving the project forward with the Russians. If Total doesn’t close the $27 billion financing it needs to move forward with the Yamal LNG project then we’ll know someone stepped in to prevent an attack on the petrodollar.

The Illusion that Lower Oil Prices Are Positive

The Oil Head-Fake: The essence of the Oil Head-Fake Dynamic is the inevitable drop in oil prices resulting from a sharp decline in oil demand (i.e. global recession) will trigger disruption of the global oil supply chain that will eventually push oil prices higher than most currently think possible.

Don't be Surprised if Silver is the Target

The BRICS have been preparing for “something” now for several years. Don’t be surprised if it turns out that silver is the “target” because it is the easiest target. The silver market is the smallest & probably the “most abused” market in the world. Its the most likely scenario in a financial attack which is now obviously just a matter of time.

A Brief Note on the Difference Between Trading and Investing

In general, investing is putting capital at risk for the long term, based on a trend or story the investor believes will have a material impact on whatever financial vehicle he has chosen. In general, trading is shorter-term & technical-based. A trader might buy & sell the chosen financial vehicle many times, based on technical trends & indicators.

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