oil

Enercom day 2

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Chief Oil Economist DNB Bank  Global View on Oil Market Most unplanned shutdowns since 2011. Opec cut production but did not cut exports. OPEC exported from inventory so inventory drew down. US rig count increased 10 rigs week versus their estimate of 5 OPEC Waterborne Crude exports have come down Saudi Arabia had drawn down 33% of its foreign reserves Demand growth is surprising to the upside Stock draws if OPEC deliver according to our base case Shale growing massively in the US Not in oversupply any longer on the global picture US Shale needs 400k barrels per day to … Read more

Day 1 Enercom Denver

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This year’s annual ritual, the Enercom Oil and Gas conference in Denver, kicked off with a recurring theme: Commodity prices are low, producers are lowering costs, and producing more. Nothing here to make you want to jump on the black gold bandwagon. But then again, the world is a dangerous place, probably becoming more dangerous and the global supply of hydrocarbons could be disrupted. The mood is somber and nothing remotely like a “trumped-up oil and gas frenzy.  Until something disrupts or dampens supply, we believe all rallies in this space should be sold.  WTI under $50 is not a … Read more

If the Middle East flares up- watch out for the price of oil

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In case no one noticed it, the tensions in the region are almost unbearable. Egypt is near financial collapse.  Syria already has collapsed.  Hezbollah was drawn deeper into Syria’s civil war as 28 fighters from the group were killed and dozens more wounded while fighting rebels, opposition activists said Monday. Russia is moving its fleet of war vessels into the sea off of Lebanon.  Well you might say there is no oil there so it doesn’t matter.  But it all seems to be connected in this cauldron of religious tensions and cultural mistrust.  Iraq, the big prize is rapidly deteriorating. … Read more

Notes from Enercom 2012

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First of all men’s suits are back in force.  Everyone is wearing a suit.  My big takeway besides men’s haberdashery is that every single company presenting (and there are a lot of them- just about every oil and gas company you never heard of plus a few majors like APA, APC, Petrobras, etc.) is talking about how they have aggressively switched away from drilling for natural gas to oily liquids.  Everyone is bragging about how fast they are making the transition.  Considering it is currently against the law to export raw crude from the U.S, there will undoubtedly be a … Read more

Israelis Killed in Bulgaria Blast as Netanyahu Blames Iran – Bloomberg

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Israelis Killed In Bulgaria Blast As Netanyahu Blames IranBy Elizabeth Konstantinova and Calev Ben-David – Jul 18, 2012 1:43 PM MTFacebook ShareLinkedInGoogle +15 COMMENTSPrintQUEUEQSix people were killed and more than 30 injured in an blast on a bus carrying Israeli tourists in Bulgaria. Israeli Prime Minister Benjamin Netanyahu blamed Iran for the attack.Five people were killed in the explosion at the airport in Burgas, on the Black Sea coast, and one person died in hospital, the Foreign Ministry in Sofia said on its website today. Bulgarian authorities are working on the assumption that the attack was an act of terrorism, … Read more

Population growth will drive commodity demand

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BOUT DOT EARTH By 2050 or so, the human population is expected to reach nine billion, essentially adding two Chinas to the number of people alive today. Those billions will be seeking food, water and other resources on a planet where, scientists say, humans are already shaping climate and the web of life. In Dot Earth, which recently moved from the news side of The Times to the Opinion section, Andrew C. Revkin examines efforts to balance human affairs with the planet’s limits. Conceived in part with support from a John Simon Guggenheim Fellowship, Dot Earth tracks relevant developments from … Read more

Chevron ex-CEO sees U.S. oil imports for next 20 years – Yahoo! Finance

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PALO ALTO, California #Reuters# – David O’Reilly, the former head of Chevron Corp #CVX#, believes the United States will be importing oil for at least the next two decades despite a recent surge in domestic production from newly developed shale basins. While O’Reilly was upbeat about the potential for supplying enough natural gas and coal for U.S. electricity, he said the country should worry about its transportation system given its reliance on oil – barring a technological breakthrough. via Chevron ex-CEO sees U.S. oil imports for next 20 years – Yahoo! Finance.

‘t be for a long time if ever

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  As of 2011, approximately 89 million barrels of oil and liquid fuels were consumed per day worldwide. That works out to nearly 32 billion barrels a year. Where is the bulk of oil demand growth going to come from? In the next five years, almost half of global oil demand growth will come from China according to the IEA, and this trend is set to continue to 2035 as oil demand from the transportation sector is growing strongly in countries such as China and India. In contrast, oil demand among OECD countries is expected to decline over the next … Read more

Why Do You Hate The Oil Sector? And Yes, I Do Mean You..

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Watching SLB trade lower and lower is what I’m talking about.  Watching HES and HAL trade into the red is what I’m talking about. Watching BAS get crushed is what I’m talking about.  The market hates oil and oil service stocks.  Period.  Prices are high, these companies are making profits hand over fist, but demand for these companies simply isn’t there.  Despite SLB’s conference call, fracking still offers a major opportunity for these companies.  China is trying to sever their lifeline to coal, and shale drilling is the surgeon.  Sure natural gas is a big black eye, but this world … Read more

‘s One In Sand

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US Silica went public at the beginning of February.  And the first direct play on sand has been on a tear ever since. Up around 24%, SLCAs appreciation has been due to the rising demand for sand in the fracking process of extracting oil.  The fact that some of the larger resource companies have simply bought their own sand manufacturers bodes well for the company, in conjunction with a steadily rising demand for the product. Along with Heckmann Corp. (HEK), US Silica could be a nice indirect play on the US becoming a oil producing powerhouse.  It’s worth taking a … Read more

Why Are Oil Markets So Short Sighted?

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Other than the occasional headline, the Iran embargo is a distant memory.  And oil markets seemed to forget that an increasing oil reserve is a direct result of preparing for such an embargo.  Just because reserve levels happened to beat expectations (it’s not like analysts regularly and accurately deal with embargo situations anyways), is it reason for a 2% or more correction in USO?  I doubt it.

CHART OF THE DAY: How To Protect Your Money In A War With Iran, And An Oil Spike

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CHART OF THE DAY: How To Protect Your Money In A War With Iran, And An Oil Spike  by Joe Weisenthal One of the big fears for the market is obviously an oil spike, possibly caused by a war with Iran.Such an event would probably be bad for stocks if oil surged but given the market and economic momentum, people arent inclined to just bet against the market on the chance of this geopolitical event.So heres an idea from Barclays Sreekala Kochugovindan. via CHART OF THE DAY: How To Protect Your Money In A War With Iran, And An Oil … Read more

Supposed Pipeline Explosion Drives Oil Above $110 A Barrel, Reported False After Market Close

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If a falsified report that a Saudi pipeline can drive oil over $110 a barrel, just imagine the repercussions of a full Iran-Israel conflict.  According to the report that was later confirmed “completely false” after US  markets had just closed, a natural gas pipeline in the city of Awamiyah exploded resulting in numerous injuries and deaths.  Thats right, natural gas drove up the price of crude simply on rumor.  That should give you an idea of how volatile the Iran situation is on the markets, despite stepping out of the headlines momentarily.  Considering we have close to two years supply … Read more

IAEA Gets Nowhere With Iran Nuclear Talks

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While Iran’s willingness to reopen talks with the International Atomic Energy Agency about their nuclear program was a surprise, it seems that the motion was mostly for show.    Several rounds of discussions yielded no access to a military site in Parchin which is suspected to be a weapons development facility.  There has been no agreement on further discussing the matter.  Light crude is hovering close to $106 a barrel today, so much for  Prince Alwaleed’s promise to keep oil under the $100 a barrel mark. From FT: “The International Atomic Energy Agency has reported that it held a “disappointing” … Read more

Drill baby drill will be the U.S. national anthem

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If oil is cut off from Iran, it could also impede supply in Iraq as Iran will use it’s influence to cause chaos wherever they can.  There is significant potential for an Israeli strike against Iran before the U.S. Presidential elections.  Israel would want to use its leverage before the outcome of the election is certain.  One thing looks clear to me.  If there is a major disruption of oil from the MidEast, “Drill Baby Drill” will be the U.S national anthem. Buy OIH, the ETF.  Buy HAL, SLB, BAS,WFT probably just about any driller for oil will work well.    

Saudi Arabia Will Not Let Oil Go Above $100

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According to Saudi Prince Alwaleed bin Talal al Saud, the billionaire head of Kingdom Holding Co., Saudi Arabia is poised to limit the appreciation of oil to no greater than $100 a barrel. “We can use our leverage, our excess capacity to be sure to pump more [oil] if needed so it will not impact the consumer countries while they’re getting out of their recessions slowly but surely,” the prince said. As for Iran, he said it is important for the U.S. and other nations to put sanctions on the “renegade country” to force its government to negotiate. Issuing an … Read more

With Iran Offline, Oil Could Jump 30%

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Despite our massive emergency oil reserves (see here), the IMF estimates a halt in Iran crude could produce a rather dramatic effect in the price of oil: “If Iran halts exports to countries without offsets from other sources it would likely trigger an “initial” oil price jump of 20 to 30 percent, or about $20 to $30 a barrel, the IMF said in its first public comment on a possible Iranian oil supply disruption.” “Financial sanctions against Tehran may be ‘tantamount to an oil embargo’ and would imply supply declines of about 1.5 million barrels per day from the world’s … Read more

What Does a Third Carrier Battle Group in the Gulf Mean?

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Having already recently warned the US (Jan 3), Iran is certainly not going to appreciate the addition of a third Carrier Battle Group around the Strait of Hormuz which was announced yesterday on Navaltoday.com. Generally a Battle Group makes for a bit of a procession.  Although it varies depending on the mission, the structure of a Group generally consists of: the aircraft carrier itself, two offensive guided-missle cruisers to engage land targets, two destroyers for defensive maneuvers against submarines and aircraft, a frigate to protect from submarine attacks, two submarines also for defensive purposes, and a supply ship to provide support … Read more

Like Herding Cats? Try Trading Oil

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Today’s rampant fluctuation in oil was a perfect example of how much political and headline risk from Iran surround the markets.  While nothing fundamental has changed from our initial assessment of the Iran situation seen here, all it took was Iran reiterating they are pissed and the IEA emphasizing to the EU that reserves exist for a reason. NEW YORK—Iran’s threat to immediately halt oil sales to the European Union pushed prices above $101 a barrel, but crude retreated after the International Energy Agency later said it could release strategic inventories if a supply emergency occurred.  Light, sweet crude oil for … Read more

Iran, Nuclear Policy, and America: An Investment Opportunity In Disaster?

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  We have a delicate balancing act at hand between the threat of an emerging nuclear power, our rapacious thirst for oil, and responsible diplomatic policy.  The consternation in the air is palpable, bringing to mind Buffet’s famous words “Be fearful when others are greedy and greedy when others are fearful”.  So how does one put such words of wisdom into an actionable trade idea?  Since going long nuclear fallout seems short sighted, let’s look at how to take advantage of a potential event driven jump in the price of oil once we fully grasp the situation at hand. At … Read more

The Ban on Iran: Tehran continues with threats

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As promised, the European Union followed through with their promise to ban all oil imports from Iran today in an effort to halt the country’s nuclear development program.  The halt on oil was accompanied by a number of other provisions including sanctions on trading with their central bank.  Just days after the US, French, and British militaries sent a flotilla of warships through the gulf, the combined effect of the ban and military actions are sure to add pressure to our already tense relationship with Iran who reiterated their threat of a closure of the Strait of Hormuz.  Markets responded … Read more

Shocking fact about Iran oil embargo consequences

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Without question, if I knew that a disruption of oil supplies from Iran would occur, I’d bet the farm on a dramatic rise in crude oil prices.  But how rationale is this popular consensus opinion?  I quote from Daniel Yergins, The Quest: Energy, Security, and the Remaking of  the Modern World. “Currently, IEA nations have about 1.5 billion barrels of public stocks, of which about 700 million barrels are in the U.S. Strategic Petroleum Reserve. Were Iranian exports to disappear from the market, the 1.5 billion could compensate for the shortfall for more than two years.” So rationale expectations and … Read more

France Said to Seek Faster Start to EU Iran Oil Embargo

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Oil markets see a bit of a boost from France’s push toward cutting the grace period before implementing a ban on Iranian crude in half, breaking a 4 day loosing streak. Jan. 17 (Bloomberg) — France is pushing for faster enforcement of the European Union’s proposed ban on oil imports from Iran, two officials with knowledge of the matter said. France wants the embargo to be delayed by no more than three months to allow nations including Greece, Italy and Spain to find alternative supplies, according to a French government official, who declined to be identified, citing state rules. While … Read more

| Reuters

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Goldman sees 2012 upside in oil, gold, copper Fri Jan 13, 2012 5:07pm IST REUTERS – Goldman Sachs said it expected upside in prices of oil, gold and copper this year, citing greater supply risks and stronger fundamentals. “We view gold and copper as providing the best value opportunities relative to our view of fundamentals in 2012,” the investment bank said on Friday, citing remaining risks of substantial supply shortfalls. via Goldman sees 2012 upside in oil, gold, copper | Reuters.

Index Funds, Where Are We Now?

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Index Funds, Where Are We Now?   While following important economic news as it continually streams through headlines, its akin to wrapping your mouth around a fire hose to quench your thirst; however it’s essential to consider how these developments are affecting your investments. Take a look at how a couple of major indexes and index funds have performed since the beginning of the year…   PowerShares DB US Dollar Index Bullish (NYSE:UUP) -1.53% U.S. Equity: SPDRS S&P 500 Index (NYSE:SPY) -1.22% Technology: PowerShares QQQ (Nasdaq:QQQ) 0.94% Europe, Australia-Asia iShares MSCI EAFE Index (NYSE:EFA) -15.77% Energy: United States Oil (NYSE:USO) -1.82% Precious Metals: iShares Comex Gold Trust (NYSE:IAU) +9.57% Fixed Income: iShares Barclays … Read more

U.S. Stocks Little Changed Amid Economic Concern; Oil, Euro Rise

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Aug. 19 (Bloomberg) — U.S. stocks fluctuated between gains and losses as investors weighed growing concern over the global economy and Europe’s debt crisis against valuations near the cheapest level since 2009. Crude oil and the euro rose. The Standard & Poor’s 500 Index rose 0.2 percent at 11:59 a.m. in New York after rising as much as 1.2 percent and falling 0.9 percent. The Stoxx Europe 600 Index slipped 1.6 percent after dropping as much as 3.6 percent. Oil rose 1 percent as it also swung from losses to gains. Gold futures topped $1,880 an ounce for the first … Read more

Weatherford International, Ltd. – Is Aging Inventory an Issue?

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       This is a checklist I use to quickly come to a conclusion on a stock.  I score a stock, each line getting a 1, 0, or -1.  A stock  that scored 1 on each line would be a perfect 10.  Buy it! Some of these items are quite subjective.  For example how would I score Cash Flow?  If a company’s cash flow is much lower than it’s reported earnings, that raises a flag and I would score it a -1.  If there are more insiders buying than selling, I would score it a 1.  If there are no apparent … Read more

When Bill Clinton released oil from strategic reserves in 2000,oil was a whopping $40 a barrel

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The last time the US decided to embark on a major program to release oil from the Strategic Petroleum Reserve was in 2000, when President Bill Clinton, concerned about the price of oil going into the winter, opened up the spigots.  The headlines from September 22, 2000 read “On the surface, the move looks defensible. Oil prices had soared to nearly $40 a barrel, up from $10 two years ago. America’s heating-oil stocks are indeed at perilously low levels. The first reactions overseas were favourable. European governments, just recovering from tumultuous protests over petrol prices, voiced their support. Even some … Read more