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Energy

  • Dropping Prices and Supply Glut Sends Oil Into Floating Storage At Sea

    There is so much surplus oil sloshing around right now, some of it is being stored on tankers at sea. It's well known that there is a glut of oil in the United States because of a lack of infrastructure and the ban on exports. A surge in production, coupled with tepid demand, has caused prices to decline by about 13 percent since June: West Texas Intermediate (WTI) is trading at a price discount.And those declining prices have led some commodity traders to decide that excess oil is better left at sea. There are now 25 to 50 million barrels…

  • How will Libya’s ongoing crisis affect MENA region?

    As international attention shifts to the Islamic State, many observers have all but forgotten the link between the toppling of Libyan leader Muammar al-Qaddafi, and his one-party state, and the emergence of increasingly dangerous competition between tribal and Islamist factions in Libya.In July, Tripoli’s airport was briefly shut down after a bomb blast, and Libya’s neighbours, Egypt and Tunisia, cancelled flights to airports in the country in August. The international response has been swift. Almost all the international organizations, NGOs and embassies evacuated their staff earlier this summer, while 150,000 of Libya’s foreign workers, largely from Bangladesh, Malaysia and the…

  • Could Low Oil Prices Point To A Debt Bubble Collapse?

    Oil and other commodity prices have recently been dropping. Is this good news, or bad? Figure 1. Trend in Commodity Prices since January 2011. Brent spot oil price from EIA; Australian Coal from World Bank Prink Sheet; Food from UN’s FAO.I would argue that falling commodity prices are bad news. It likely means that the debt bubble which has been holding up the world economy for a very long–since World War II, at least–is failing to expand sufficiently. If the debt bubble collapses, we will be in huge difficulty.Many people have the impression that falling oil prices mean that the cost…

  • Scotland’s Oil Future Will Remain In British Hands

    William Wallace must be awfully disappointed. The Scottish voted to remain in the United Kingdom, albeit in exchange for a very nice care package of extra powers from Parliament.  However, while the dreams of a Celtic revival have been crushed for now, energy companies have been united in approving the result. In fact, rarely has a political matter so united the entire spectrum of this industry. For all the talk about energy transitions, new sources and untapped reserves, the energy sector craves stability. And so do the public. Alex Salmond, the outgoing First Minister of Scotland, may have crowed about…

  • With LNG Export Battle Won, Are Oil Exports Next?

    Building on its success in getting the U.S. government to approve exports of natural gas, the oil and gas industry has moved on to the export of crude oil. To be sure, the campaign has been underway for quite a while. The four-decade old ban has been under attack over the past year because of the glut of oil that has come onto the market. Increased supplies in places like North Dakota and Texas have led to a significant price discount between the Brent benchmark, which largely reflects international prices, and the West Texas Intermediate (WTI) benchmark based in Cushing,…

  • Western Sanctions Halt Exxon’s Drilling In Russian Arctic

    Western sanctions against Moscow have forced ExxonMobil Corp. and Kremlin-owned oil giant Rosneft to suspend drilling at an offshore oil well in the Russian Arctic.Bloomberg News broke the story Sept. 19,  quoting individuals familiar with the venture. New U.S. and EU sanctions were imposed on Sept. 12, and activities at the well ground to a halt a few days later, according to three knowledgeable sources who spoke to Bloomberg on the condition of anonymity because they weren’t permitted to discuss the deal between Exxon and Rosneft.Reuters quoted Russian Natural Resources Minister Sergei Donskoi as saying on Sept. 19, "I have…

  • Three Trends Energy Investors Should be Following

    I don’t spend much time finding very short-term trades, as regular readers know.  Staring at my screens and trying to find a great long-term trade hasn’t been a breeze either.  It’s not that the trends aren’t there to be found; it’s more that there are few ways I see right now to put them in actionable motion.But noting those trends are the first step and I see three of them, with the actual trades following later.  They are:1-    The inexorably rising price of crude2-    The relative advantage of US Exploration and Production and3-    The Liquid Natural Gas opportunityFinding trades to…

  • Emerson Electric (EMR): Even The Opportunity For A Profit Makes Me Mad

    As I advance in years I find that, unlike many people, fewer things make me angry. I guess I am just coming to terms with the fact that the world doesn’t always operate in the way I think it should, but seems to be doing pretty well all the same. One thing, however, that does still stir some anger and frustration is when a corporation, or more accurately its stock, is punished for poor short term results when the long term outlook is positive. Such is the case with Emerson Electric (EMR).When, in early August, Emerson announced their earnings and…

  • Larger Than Expected Natural Gas Inventories Spells Trouble for Producers

    In a surprising turn of events, rising supplies of oil and tepid global demand have caused prices to crash to their lowest levels in years.And the same phenomenon may be playing out for natural gas, at least in the United States. An increase in supply and soft summer demand are combining to see rapid build ups in storage inventory, according to new data from the Energy Information Administration. But let’s back up a minute. The unusually cold winter of 2014 saw a record-breaking drawdown in natural gas inventories as power plants ramped up to supply enough heating, particularly on the…

  • Speculators May Rally to Crude After Nigeria and Libya Problems

    November Crude Oil futures are in a position to close the week higher. This possible reversal on the weekly chart coupled with the strong upside price action earlier in the week, suggests the market may be in a position to change the trend to up on the daily chart. The current upside price action suggests investors may be starting to turn their backs on the bearish fundamentals. Early Wednesday, the U.S. Energy Information Administration reported that U.S. crude inventories rose 3.67 million barrels to 362.3 million the previous week. This represented the biggest increase in five months.Furthermore, traders had priced…