Commodity Trade Mantra

Posts Tagged ‘Oil Companies’

Oil Prices Rocked By OPEC Reports - But Can’t Stay Low For Much Longer

Due to a very high degree of uncertainty surrounding OPEC intentions, there is likely to be further volatility in US trading on Friday and the potential for significant price gaps at the market open next week. Overall dollar trends will continue to have a significant impact on underlying crude oil prices. Remember, oil prices will not languish at the current depressed levels forever.

Crude Oil Enters Bull Market Amid Output Freeze Talk

An emphasis by oil companies on frugality in operations mean a certain amount of cost-cutting should be sustained in the coming years. Slashed expenditures in the oil industry are expected to add up to $1 trillion dollars over the 2015 – 2020 period. Dollar weakness & production freeze hopes combine again to rally crude oil prices higher. Here are 5 things to consider in crude oil markets today.

OIL - The Untold History of Black Gold & How it began the Political Strategies of the West

The political strategy of the U.S. had to adapt to provide for the needs & wants of the American population. The ‘70s marked the turning point when the U.S. shifted from being an oil exporter to the world’s largest oil importer. The oil crisis of 1973 was the game changer that transformed the international political & financial system into the current system of petrodollars & oil wars.

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.

Oil Prices can Spike on $1 Trillion In Spending Cuts

An oil supply deficit may be hard to fathom given two years of surplus and rock bottom oil prices, but with the financials of so many oil companies badly damaged, upstream investment could come up short in the not-too-distant future, even if oil prices continue to rise this year. The small increase in the US oil rig count over the past few weeks is not nearly enough to reverse the decline.

With A Rebound In Oil Prices, Will Drilling Activity Return?

On June 6, Morgan Stanley released a report saying that “all eyes” are on the U.S. to see if drilling will return now that oil prices are back above $50, after having rallied roughly 85% since February. There are a few early signs that drilling is starting to begin again. The oil rig count jumped by nine last week to 325 active oil rigs, the sharpest increase since December 2015.

Has the Oil Price Rally Gone Too Far? Time for a Correction or Yet More to Rise?

As usual, the oil markets are rife with confusion and uncertainty. Speculators could be overextending themselves – Or – realize that the rally has run out of steam & then decide to pocket their profits. The longer-term looks a little clearer on the back of rising demand and shrinking supply. The market will have to balance out; the only debate is over how quickly that happens.

Crude Oil At $20 Is Now A Distinct Possibility As Chinese Demand Wanes

Importantly for crude oil is the fact that China’s worsening economic situation could cut into the country’s crude oil demand. As the world’s principle driver of crude oil demand suddenly starts slowing to more pedestrian levels of growth, the oil markets are very much feeling the effect. As Goldman Sachs predicted, crude oil prices might indeed fall to $20s per barrel.

Time to Play the Rebound In Oil Prices

The oil industry is permeated in gloom right now because of oversupply & weak demand. Small producers are going out of business & a wave of energy-related bond defaults is about to wash over the fixed-income markets. But the oil majors are positioning themselves to benefit from the rebound of prices in late 2016 and early 2017. The time to play this rebound is now.

What Oil Investors Can Learn From Gold

The truth of the matter is that gold is largely an irrelevant commodity compared with oil. Oil is the basis for dozens of countries’ economies around the world & for thousands of major companies’ existence. The other truth & the less pleasant one, is that there are stark parallels between what happened to gold a few years ago & what is happening to oil today.

Yesterday, less than a year after Saudi Arabia launched its attack on “marginal” US Shale producers which has sent the price of WTI oil crashing by more than 50% from $100 before recouping a substantial portion of the losses and last trading around $60, the Kingdom gloated in declaring victory over US Shale.

The Coming May Oil "Buy Signal”

According to a U.S. EIA report, the huge surge of growth for the past five years in America’s shale patch is coming to an end. This is a watershed moment for the U.S. shale boom — and a vitally important moment for investors, too. So what does this mean for the price of oil? And what does this mean for shale producers?

A Necessary Correction in the Oil Industry

The short-term pain the oil industry is currently facing is necessary & none must not stop this natural process through misguided stimulus in an effort to prevent oil company layoffs. Such efforts are likely to only benefit giant oil companies, as seen in the wake of the 2008 crisis where the biggest banks were the biggest winners.

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.

Why Oil Can’t Stay Cheap

Oil market gyrations touch everything. So you have to either figure out how to ride the train… or get crushed beneath the wheels. How long can you expect low oil prices to last? Over the long haul, it is simply too valuable a commodity to stay “cheap.” Any number of events could trigger prices to rebound. Anything could happen.

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.

Why Russia’s Unfazed by Falling Oil Prices

Oil is not quite as powerful a weapon against modern-day Russia as one might think. If Russia ramps up production to raise revenues, it will lead to a bigger fall in oil prices. And one of the primary victims will be US shale production. The slide in oil prices threatens American energy independence & emboldens rather than weakens Russia.

Why OPEC Will Tolerate Cheap Oil

While the current dip in energy prices clearly does hurt Saudi Arabia, it hurts her enemies far more, particularly Iran & Russia, which has been a key enabler of Iranian power. Putting pressure on Russia has also become a key strategic interest of Washington. Cheap oil likely will protect & increase Saudi Arabia’s oil market share.

Guess What Happened The Last Time Oil Prices Crashed Like This?

OPEC is now engaged in a “price war” with the United States. If the price of oil stays at this level or continues falling, we will see a significant number of U.S. shale oil companies go out of business and large numbers of jobs will be lost. The Saudis know how to play hardball, and they are absolutely ruthless.

Making Sense of the US Oil Story

If US oil producers have the option of selling their crude oil abroad, perhaps they can get a higher price for it. If US oil producers can get higher prices for their oil, this may very well filter through to higher oil prices for US consumers, and less oil consumption by US consumers, but this is not the concern of oil companies.

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