Commodity Trade Mantra

Posts Tagged ‘Oil and Gas’

The Safe Way to Play Emerging Market Stocks

There’s a lot to like about emerging market stocks. But like any investment, there are risks you have to consider. Today, we look at the biggest threat to emerging markets. But don’t worry. There’s a way to get around this risk. A strong dollar makes it hard for many emerging market companies to pay off their debts. Invest in countries with low levels of external debt like Russia, Brazil & India.

Oil Markets On A Knife Edge Despite 91% OPEC Compliance

The 10 OPEC countries that promised to reduce their production as part of the Nov. 30 deal have achieved a 91% compliance rate with the targeted cuts. Oil prices enjoyed a huge surge following the successful outcome of the OPEC deal at the end of 2016, but have stagnated since. If OPEC compliance starts to drop, it will probably do so with a backdrop of rising U.S. oil production.

Has Saudi Arabia Underestimated the Shale Oil Resilience yet Again?

Saudi Arabia seems unfazed from a possible rebound in U.S. shale. They still believe that current oil prices at around $50 are still not enough to herald a significant rebound of US shale production. Saudi Arabia’s oilmen may not lose sleep over U.S. shale resurgence, but it looks like they may have underestimated the shale resilience yet again, as was their idea of flooding the market with oil in 2014.

OPEC Rumours Continue To Pull Oil Prices Higher

Oil prices hit one a month high on Monday thanks to speculation about potential producer curbs on supply and new data from market intelligence firm Genscape showing an estimated draw of more than 350,000 barrels per day at the Cushing OK delivery point. Although oil prices reacted stoically on last week’s rig count report, the amount of rigs added to the Permian basin is starting to add up.

Slump In Oil Prices May Burn The Oil Industry Again

When oil prices fall, volatility increases & the floodgates of capital open. Every genius-investor wants to buy low & sell high. Rig count rises with fresh capital, production increases & oil prices fall. When oil prices rose from $26 in mid-Feb to over $51 by early June, the rig count change rate exploded. Predictably, oil prices are falling again on continuing the same thing that got you in trouble before.

Are Central Banks Running the Crude Oil Market or Just the World?

The price of oil has been rising, no matter how bad the oversupply news gets. How today’s oil prices are really determined is done by a process so opaque only a handful of major oil trading banks have any idea who is buying or selling oil futures or derivative contracts that set physical oil prices in this strange new world of “paper oil”.

Gold And Silver – A Clarion Alarm Call For All Paper Assets

Gold or silver does not ever change. What changes is the [falsely]perceived [worthless]”value” of fiat paper currencies. Those who [unwisely]choose to own paper assets of any kind, especially in the stock market and digital currency held in banks, are being given a clarion alarm call by gold and silver that your time has reached its expiration date.

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.

Why North-American Oil Is Positioned To Win In The Long-Run

Not only are North American oil producers displacing non-North American imports from the U.S. market, U.S. producers are competing for share in foreign crude oil and petroleum product import markets. Lifting the ban on crude oil exports at the end of 2015 will increase U.S. exports. The “growing volumes of exports” from the U.S. are now “spooking the markets.”

Could Oil Prices Sink Below $40 Per Barrel Again?

As we know all too well, all paths lead back to energy, hence falling oil prices are reining in inflationary pressures once again. Retail oil prices on the national average are now dropping below $2.50/gallon, and should continue to retrace in the coming months – despite the expectation of a deep refinery maintenance season.

Why Water Is More Important To Iran’s Future Than Oil

It’s the water that will determine Iran’s future, and not it’s oil and gas. What’s worse, the current drought, which stretches back more than two decades, shows no signs of letting up. The World Resources Institute projects a 20 percent decrease in water supply across much of Iran toward 2040. Conversely, it sees demand rising by as much as 70 percent in that time.

Making Sense Of The Weakness In Oil Prices

Saudi Arabia was instrumental in exacerbating the oil slump at the end of last year, when it decided at November’s OPEC meeting not to cut production to support the oil prices. The rationale was that shale producers needed a high price to stay in business. Let the oil prices fall and they’ll go bankrupt – along with those who financed them. It hasn’t really worked. Why?

Forget The Noise: Oil Prices Won’t Crash Again

The big story in oil prices was the rig count on the way down. The big story on the way up will be inventory. Look for WTI crude oil to make a move towards and maybe into the $70’s as clarity strikes the market. Look too for more walls of worry but remember to consider the source.

The Top 12 Media Myths On Oil Prices

The upstream oil and gas industry is not a black hole. Its only when the media gets a hold of it, it all becomes complicated. There is so much hyperbole and unsupported guesswork that investors don’t have a chance. So, in a small effort to set the record straight, let’s see if we can’t dispel some of the misinformation.

$20 Oil Looms As Iran-Nuclear Deal Nears Deadline

Iran is a sleeping oil giant holding 9% of the world’s proven oil reserves & with an estimated 2m barrels per day of excess supply already sloshing around international markets, any increase in Iranian output could easily trigger a further rout in oil prices. OPEC may clamp down on this in June, but by then oil may already be selling for $20.

CEO Of Rosneft Compares Oil Market Manipulation To Gold Price Rigging

The CEO of an oil major just used gold rigging as an example of the same commodity manipulation that gold longs have been complaining about for years if not decades. Financial markets (prone to manipulation) tend to produce economic bubbles & those bubbles tend to burst. Remember the dotcom bust & subprime mortgage crisis?

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.

Is Market Sentiment Shifting to Gold?

When you look at the world economy, there’s no shortage of worries. Most market strategists do not view gold as a currency but only as a commodity. The rule: dollar up, gold down. But on viewing gold as a currency compared to many other currencies, including euro, ruble, yen & rupee, it has been a good place to be in over the last year.

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.

Goldman, BofA Warn Crude Oil Crash Will Have Negative Impact On GDP, Earnings

The direct negative effect of lower oil prices on Energy earnings is clear. Given this historical relationship and oil futures prices, Energy earnings are likely to drop by more than 50% year/year in 2015. This fall would result in an S&P 500 earnings drag of roughly $65 billion, or more than $7 of EPS vs. 2014.

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