Posts By: Matt Insley
Crude futures barely held onto the $80 mark Wednesday, after a weekly supply report from the U.S. Energy Information Administration showed that U.S. crude stocks had increased by 7.1 million barrels, nearly three times the Platts estimate. This came a day after an upbeat report on the state of the U.S. economy spurred modest gains on expectations of increased demand. However, oil is not expected to fall below $80 for any length of time, meaning that the vast majority of U.S. producers will remain in the black, and U.S. refineries are seeing their bottom lines improve.
With demand for energy in the western Pacific, especially in China, expected to surpass domestic and European needs, Canada’s oil producers have been building infrastructure to ship crude and especially liquefied natural gas (LNG) from the Pacific coast to Asian markets. Now, the British Columbian government has proposed slashing its tax on energy exporters in half, from a maximum of 7% to a maximum of 3.5%. Analysts say the move is in line with Canada’s growing identity as a global energy producers on the back of new unconventional oil and gas output, and could draw more international investment.
According to Bloomberg, Australia’s liquefied natural gas (LNG) export industry, expected to become the world’s largest, may be crushed by falling oil prices. If prices remain below $80 per barrel, analysts say a number of the country’s LNG projects will be “put to sleep,” to avoid operation at a loss. With LNG exports just starting in the United States, on the back of cheap shale gas, this could present a real opportunity for American LNG exporters to take a larger share of the market.
In response to this month’s volatile market action, gold buying in China is a 17-month high, and Indian gold buying is up, as well, reports MarketWatch. According to analysts at Sharps Pixley, “While the sentiment towards gold has been soured given little inflationary pressure, the global equity rout and the on-going geopolitical risks have led to a rising demand for gold as an uncertainty and a portfolio hedge.” Thanks to renewed demand, gold gained on Monday to settle near $1,250.
While many commodities are at five-year lows, reports Bloomberg, gold is up, according to Kitco News. Poor economic data, combined with a stock market downturn and the Saudi decision to cut oil prices last week has pulled the rug out from everything from copper to oil. Analysts say fears of another financial meltdown are driving […]
According to the U.S. Energy Information Administration, not all U.S. natural gas producers are selling near the national average. That average, called the Henry Hub benchmark, has been near $4 per million British thermal units since last winter’s polar vortex swept the country, bring records low temperatures and driving up energy demand. The EIA has […]
A week after Saudi Arabia announced unilateral oil price cuts to keep up sales, Iraq and Iran has followed suit. With its top three producers now pushing down prices of their own accord, will the rest of OPEC follow? Probably not, analysts say, since some countries — like Venezuela, for instance — rely on near-$100 […]
Last week, Federal Reserve vice chairman, Stanley Fischer, gave indications that the Fed will continue its near-zero interest rate policy thanks to a global economic slowdown this year. This, after much speculation that the Fed would raise interest rates in 2014. In response, the U.S. dollar had its first downturn in weeks and gold rose […]
Is it 2008 all over again? Heh, if you’re the Saudis it is! Saudi Arabia just slashed prices for their Arab Light crude oil to prices not seen since December 2008. A decade ago would you ever imagine that a U.S.-led oil boom would cause a panic amongst OPEC nations? Well, my friend, it’s happening […]
According to Dow Jones Business News, Arabica coffee prices have soared to the highest they’ve been in 2 ½ years due to worries that Brazil will continue to suffer unusually dry weather. A commodities strategist at Loomis, Sayles & Co. notes Brazil’s significance in the coffee market, “Brazil is to the coffee market what Saudi […]
The EIA has once again cut its forecast of world oil demand in their latest monthly report, another signal of a shift to surplus supplies next year. According to Rigzone, the EIA pared forecasts for OPEC’s oil production as well, down 350,000 bpd from last month’s forecast. Analysts attribute a reduced reliance on oil from […]
Metals investors have found a patch of bullish news amid a torrent of bearish panic brought on by the sector’s recent sell-off. Goldman Sachs analysts report that this week’s drop in metals prices provides a longer-term buying opportunity for those metals with supply constraints. According to Kitco, metals in this category that should provide the […]
According to Bloomberg, there are talks of a merger between Rio Tinto PLC and Glencore PLC in the works, which sent shares of Rio were up 12.7% in one trading session. Analysts say a merger between the two companies would create the world’s largest mining group, with a combined market cap (at current prices) of […]
It’s been dubbed “America’s point of reckoning,” and according to one forecast, it could slash the price of oil by over 30%. In other words: $60 oil. Today, we’ll take a look at this important terminology, what it means and how to profit. Along the way, we’ll also update our Profitable Oil Driller’s Dictionary… The […]
The Panama Canal is undergoing expansion to allow passage of larger vessels in anticipation of increased liquid natural gas shipping. The EIA reports, the increased cargo capacity will lower per-barrel costs for larger tankers that previously had to bypass the Panama Canal, loading and unloading to complete a transfer via the Trans Panama Pipeline . […]
Mexico has emerged as the preferred choice for investors in Latin American steel, thanks to key energy reforms and exposure to the U.S. recovery, a far cry from gloom of recession hanging over rival Brazil. According to Reuters, the state Mexican steel is strongly tied to what happens in the U.S. manufacturing sector, therefore Mexico […]
Have you had a good, long look at the U.S. dollar index lately? If not, you might want to put down your morning coffee and take a peek: The dollar’s action can be summed up in one simple phrase: “3-2-1, liftoff!” Since July 1, the old greenback is up over 5%. For a currency, that’s […]
According to MarketWatch, falling equipment prices are fueling a broad move away from solar leasing, a growing trend that may threaten major solar energy providers like SolarCity and Vivint, which rely on decades-long lease agreements for most of their new installations. SolarCity (SCTY:NASDAQ) is set to lose its monopoly as the only publicly-traded solar panel […]
Once thought of as merely a stop-gap measure to transport oil and gas from far flung shale fields, America’s railways have now become an integral part of the U.S. energy infrastructure. WSJ analysts report that lower capital expenses and increased flexibility to deliver crude where it will fetch the highest prices, make crude-by-rail attractive to […]
Alibaba isn’t the only Chinese stock stirring up commotion in markets with China’s Sinopec selling $17.5 billion stake to investors, the country’s biggest privatization since President Xi took power. Reuters reports, the sale comes as China’s government pushes to bring private capital and expertise into its economy. Analysts forecast the deal will improve the oil & gas company’s finances and add further investment to exploration and production efforts.
Potash, used primarily in the production of fertilizers, as well as aluminum recycling and oil well drilling fluid, is experiencing an uptake in demand. According to Bloomberg, Potash Corp. of Saskatchewan, the world’s largest fertilizer producer is considering expanding production to 11 million tons next year from 9.2 million this year. The company’s CFO adds, […]
“Fear trade” pulled gold prices lower this week, ahead of the Fed’s latest meeting to address the economy’s future. According to Kitco, a rise in Q2 GDP and improvements in labor markets could mean the Fed may embark on raising lending rates sooner than first expected, placing further downward pressure on gold. Economists forecast the […]
Platts reports, leaders of a Washington think tank recently appealed to members of congress to end the 40-year long ban on exports to no avail. Larry Summers, former senior economic adviser to President Obama, speaking in support of their effort said, allowing U.S. crude exports will have a range of benefits, from lower gasoline prices […]
Harold Hamm, the “father of the frack boom” along with a few other determined oilmen, pioneered the technology and know-how needed to crack energy-filled shale formations, like North Dakota’s Bakken. Today the Bakken produces more than one million barrels per day. Back in May, Hamm donned the cover of Forbes Magazine, under the title “The […]
The world’s appetite for energy is projected to shift from mature economies — i.e. Europe, North America — to developing economies — Asia, Africa — in the next quarter-century, according to the latest report from EIA. The report notes, the sheer scale of growth in demand for transportation services in relatively underdeveloped transportation networks will […]