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Energy

  • This Week in Energy: ‘Russian Conspiracy’ Could Help Denton Frack Vote

    All eyes are on a small college town just outside of Dallas, Texas, whose claim to fame is three-fold: It is the home to the Barnett Shale; it is where hydraulic fracturing debuted; and now some fear it could be where fracking meets one of its greatest enemies, while conspiracy theories of Russian infiltration abound.On 4 November, the residents of Denton will vote in a local ballot on whether or not to ban fracking within the city limits, and there is a flurry of activity on this battleground that is not likely to end with the vote itself, but will…

  • Oil Price Recovery Will Be Slow, Steady And Painful

    I’ve been trading oil and learning about oil companies for 30 years, and one thing I can tell you is that the common wisdom about the oil market is almost always simplistic, unreliable and wrong.  I was openly bullish on oil as it approached $90, because I know that the strength of the dollar is a spurious trading connection that has never been as strong as right now.  I also don’t believe in the commitment of the Saudis to a price war – today’s report showed that, true to form, the Saudis cut production in September to match their drop…

  • Things Are Looking Up For Marathon Petroleum

    When stocks in a sector come under pressure, as has been the case with energy stocks over the last few months, the speed with which an individual stock bounces back when things begin to turn around can tell you a lot. If there are sound fundamental or company specific reasons for a stock to fall with everything else then any bounce back will be somewhat muted initially. Conversely, when something is dragged down with everything else despite decent prospects the snap back can be quite spectacular. When a stock jumps over 15 percent from its lows in less than a…

  • The Untapped Potential of the Levant Basin

    The Eastern Mediterranean is an emerging region for natural gas development, and the resources underneath the seabed hold out the promise of an economic bounty to several small countries in the area.Some of the natural gas fields just recently began to flow, but the buzz began back in 2010 when a U.S. Geological Survey report estimated that the Eastern Mediterranean held 1.7 billion barrels of oil and 122 trillion cubic feet of natural gas. Known as the Levant Basin Province, the natural gas deposits stretch from the waters just off the coast of Israel, north to Lebanese and Syrian waters,…

  • Vigilance Needed To Determine Extent Of Recent Rally

    While most investors were focused on the recent volatility in the equity markets and the weakness in the crude oil and natural gas markets, shrewd money managers were taking advantage of the low prices in the oil sector and buying undervalued stocks.  One ETF market that may have turned the corner at least in the short run is the S&P Energy Select (XLE). After reaching its lowest level since the week-ending June 28, 2013, it posted a strong rebound from last week’s low at $77.51. It is currently trading close to 10% higher at $86.28. Based on its sell-off from…

  • Falling Coal Prices Wreaking Havoc With Corporate Balance Sheets

    The slide in oil prices has raised speculation that oil companies in the U.S. could be forced to cut back on production, but a market slump in another commodity is also putting pressure on producers. Coal markets are currently experiencing a supply glut that is showing no signs of recovery. Mining companies drew up plans for billion-dollar projects in the mid-2000s, when commodity prices were on the upswing. With many of those projects now coming online, coal production is rising.BHP Billiton, an Australian mining giant, just opened a $3.4 billion mine in Queensland, which will add 5.5 million tonnes of…

  • Russian Credit Rating Slashed, Economic Future Remains Dim

    The struggling Russian economy was short on good news last week as Moody’s Investors Service slashed the country’s credit rating to its second lowest level, Baa2, citing the crisis in Ukraine and Western sanctions. The move follows similar ratings downgrades by Fitch Ratings Ltd and Standard & Poor’s and reaffirms Russia’s meager medium-term growth prospects. In the more immediate future, Russian equity markets remain a risky play. Long term, the picture is less clear and Russia’s vitally important energy industry is riddled with uncertainties. Related: Ukraine-Russia Gas Deal Still Possible Despite SetbackAmid Western sanctions over Russia’s actions in Ukraine, plummeting…

  • 8 Reasons For Our Oil Price Predicament

    A person might think that oil prices would be fairly stable. Prices would set themselves at a level that would be high enough for the majority of producers, so that in total producers would provide enough–but not too much–oil for the world economy. The prices would be fairly affordable for consumers. And economies around the world would grow robustly with these oil supplies, plus other energy supplies. Unfortunately, it doesn’t seem to work that way recently. Let me explain at least a few of the issues involved.1. Oil prices are set by our networked economy.As I have explained previously, we…

  • Is The UK The Most Energy Secure Country In The EU?

    Two related articles appeared in Blowout Week last Sunday. In the first the Daily Express fulminated about how the UK government’s energy policies will send electricity bills skyrocketing and maybe snuff the lights out at the same time:The green crusade of successive governments is set to double electricity bills for households and cost homes £26 billion a year by 2030, it was claimed yesterday. The cost of renewable energy and carbon taxes will put an extra £983 a year on household bills by then, compared to relying on a mix of nuclear and new gas-fired power stations, three experts told…

  • Ukraine-Russia Gas Deal Still Possible Despite Setback

    Negotiations over a natural gas deal between Ukraine and Russia have faltered since the spring, but the standoff has taken on a new urgency as winter approaches.Following the overthrow of Ukrainian President Viktor Yanukovich in February, Russia altered the terms by which it sells natural gas to Ukraine. Along with Yanukovich, favorable pricing went away. In April, Russia nearly doubled the sale price of natural gas to Ukraine, from $268.50 per thousand cubic meters to $485.50. This was a price that the Ukrainian government said it could not meet. Even worse, Russian gas company Gazprom demanded upfront payment for gas…