Energy / Crude Oil

• 5 Industries Worried About Peak Oil

  The debate over the impact of peak oil has been raging for decades. Although few deny that the end of mass oil consumption is drawing nearer, educated estimates now range between 2020 and 2030. But more important than the timeframe of peak oil are its consequences. Some seek to spell the end of life as we know it, so reliant is the world upon black gold. Others, equally extreme in their views, embrace the news, looking forward to a time when humanity will magically clean up its act. The truth is somewhere in the middle. Clean energy sources are making…

• Are we About to See a Buying Opportunity in Oil

  Despite the recent weakness in Nearby Crude Oil on the daily chart, the weekly and monthly charts are showing quite a bit of resiliency. Both of these charts suggest the market may be in a position to breakout to the upside which could be the reason why traders are coming in to support the market on short-term sell-offs.Fundamentally, gains seem to be capped by high inventories, but the continuing improvement in the U.S. economy coupled with a spattering of geopolitical events have helped maintain a strong uptrend.  The recent sell-off in crude oil from late June to mid-July was met…

• World Oil Production at 3/31/2014–Where are We Headed?

  The standard way to make forecasts of almost anything is to look at recent trends and assume that this trend will continue, at least for the next several years. With world oil production, the trend in oil production looks fairly benign, with the trend slightly upward (Figure 1).Figure 1. Quarterly crude and condensate oil production, based on EIA data.If we look at the situation more closely, however, we see that we are dealing with an unstable situation. The top ten crude oil producing countries have a variety of problems (Figure 2). Middle Eastern producers are particularly at risk of instability,…

• Looking for the Next Oil Boom? Follow the Tech

  Much larger than Eagle Ford and once thought to have reached peak production, new technology has brought us full circle back to the Permian Basin in Texas and New Mexico, where the recent shift to horizontal well drilling has rendered this play the unexpected ground zero.Determining where the next real oil boom will be depends largely on following the technology, and while the Permian Basin has been slower than others to switch from vertical to horizontal well drilling, horizontal has now outpaced vertical, and investors are lining up to get in on the game.Until about 12 years ago, virtually all…

• The World Still Needs Saudi Arabia’s Oil

  Economic analysts are torn as to how important Saudi Arabia will prove to the global economy in years ahead. In the first half of 2014, the US surpassed Saudi Arabia to become the world’s foremost oil producer. This sparked widespread predictions that the US would soon become an oil exporter, reducing its dependency on Riyadh and harming Saudi Arabia’s leading role in the Middle-East. However, the ISIS invasion of Iraq and Syria, the Boko Haram insurgency and continued oil theft in Nigeria, unrest in Venezuela and ongoing violence in Sudan and South Sudan have changed the deal.The US extracted a…

• Successfully Trading the Crude Oil Markets

  Speculators versus ProfessionalsLast week’s article highlighted the crude oil futures market and the roles that supply and demand as well as the major market participants play in determining the direction of prices. The article mentioned that unlike stocks, crude oil futures run in spurts. There may be a trend at times, but the trends are short-lived.The upward price spikes tend to be driven by surprise geopolitical events like last year’s weapons showdown between the U.S. and Syria and this year’s military activity in Ukraine and Iraq. Speculators are usually behind these moves because they are trading off the fear that…

• The 3 Biggest Downsides to the U.S. Oil Boom

  Unless you’ve been living under a rock, you’ve no doubt heard that the U.S. is in the middle of an oil boom. Advances in technology have enabled the recovery of oil and gas from shale formations that were previously impossible to drill effectively or economically, and have led to a surge in the production of both commodities. This is generally presented as a good thing, for sound reasons. As every pessimist will tell you, however, in front of every silver lining is a great big black cloud.The upside to the shale oil boom is well known. Increased production means lower…

• Where The US Got Its Oil in 2013

  How Much Oil Do We Import?As events in Iraq continue to unfold, we have been getting quite a few queries on just how much oil the US imports from Iraq. In my previous post – The Top 10 Oil Producers in 2013 — I showed that even though the US is a major oil producer, we are an even greater oil consumer. So we import millions of barrels a day of oil from over 40 countries — one of which is in fact Iraq.The Energy Information Administration (EIA) tracks US oil imports and finished product exports, and I have tabulated…

• Black Gold: U.S. States Where Oil Is King

  The U.S. has succeeded in lifting its oil production to over 8 million barrels per day, the highest levels in decades. But where exactly is all that oil coming from?The answer for the last several years has been the Bakken field in North Dakota and the Eagle Ford in Texas. Those two regions are principally responsible for the surge in oil production. But in April 2014, North Dakota surpassed the 1 million barrel per day mark -- a milestone for a state that was producing fewer than 200,000 barrels per day just five years ago. Texas has always loomed large…

• Understanding the Crude Oil Markets

  Crude oil futures and oil stocks have one thing in common. They both trend well. Stocks have one advantage, they tend to have unlimited upside potential while the upside in crude oil is often limited because of supply and demand concerns. This and the leverage in the futures markets makes crude oil a difficult market to grasp for some traditional investors.One of the first steps to take when considering an investment in crude oil futures is to learn how the market trades. Sure, it trends, but the trends are short-lived because of the weekly shifts in the supply and demand…