Insider Secrets

Insider Secrets

Learn how the PROs are making money from the oil and energy market.

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Energy / Gas Prices

  • Growing Consumer Indifference To Gasoline Prices

    U.S. retail gasoline prices last week averaged over $2.80 a gallon, thirty cents higher than a month ago. The preliminary University of Michigan index of consumer sentiment for May was 88.6, down 7 points from the month before. Are these two developments related?The consumer sentiment index is plotted in black in the graph below with units on the left scale. The negative of the gasoline price in real terms (deflated using the CPI) is shown in blue, with units on the right scale. I have plotted the negative of gasoline prices to help highlight the negative relation between the two…

  • Have Natural Gas Prices Bottomed?

    Last Friday we finally got confirmation of where all the natural gas supply has been coming from as Cabot (COG) reported its earnings. Just like Chesapeake (CHK), they reduced natural gas output, but on a much grander scale. CHK has yet to report and will do so on May 6th providing even more color on the subject. Last month they announced a 2% reduction in NGAS volumes to 1-3% for 2015 vs. 3-5%. But the ramp up of supply from Marcellus, and to a lesser extent Utica, and a corresponding flat to up rig count in natural gas rigs in…

  • EU Struggling To Diversify Away From Russian Gas

    Russia will remain a major supplier of natural gas to the EU as projects to find alternative sources face headwinds from escalating costs and political meddling from Moscow. Whereas Europe is attempting to limit natural gas imports from Russia, few source countries have the reserves and infrastructure to meet demand from Brussels. Moreover, Russia relies on internal EU division to maintain the status quo. Over the past year, many have clamored for the EU to reduce its energy reliance on an increasingly revanchist Russia. As approximately 30% of its natural gas imports stem from Russia, it seems logical that the…

  • Ukraine Won’t Be Bullied By Russia Over Gas Deal

    Russia says it is considering a request by the European Commission (EC), relayed by Ukraine’s state-owned gas company Naftogaz, to extend its current discount for the gas it sells to Ukraine. The EC proposal, received by Russia’s state-owned Gazprom on March 27, was to have the discount last for another full year, through the end of March 2016. But Russian energy Minister Alexander Novak said March 30 that any extension would probably be for only three months. “The Russian government will prepare a decision in the near future,” Novak said in an interview on Russian state television. “The issue will…

  • Is President Obama Manipulating Gasoline Prices?

    The Rotating Roles of Accused and AccuserIt never fails during election season that when gasoline prices are falling, the party out of power and media members sympathetic to that party will start to make accusations and insinuations that the President is manipulating gasoline prices in order to win elections. It happened when Clinton was in office, it happened when Bush was in office, and now it’s happening while Obama is in office. The only things that change are the party that is being charged of manipulating prices, and the people who are defending or accusing that party. This year it’s…

  • 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…

  • LNG-Dependent Japan Tries To Gain Leverage Over Pricing

    Japan’s record purchases of liquefied natural gas (LNG) show no sign of slowing as the country continues to try and fill the energy shortfall created when it took its nuclear plants offline three years ago.With its lack of substantial domestic sources of fossil fuel, Japan is cripplingly dependent on imported oil, coal, and natural gas. Before the 2011 meltdown of the Fukushima nuclear plant, Japan was the third largest nuclear generator in the world, behind the United States and France, with 54 reactors.     Those reactors were critical to cutting Japan’s fuel import bills, and accounted for 20 percent of…

  • Gasoline Prices Look Set To Stay Low

    To the delight of American drivers, gasoline prices are continuing to slide downwards. The national average price of gasoline hit $3.35 per gallon at the end of September, which is about 14 cents lower than at the same time a year ago, according to the U.S. Energy Information Administration (EIA).Better yet, gasoline prices could drop further in the coming months. In recent years it has become commonplace for many drivers to see a gallon sell for well over $4 per gallon. Why have gas prices dropped to such low levels all of a sudden?There are a complex set of factors…

  • Is U.S. Gas Really Expensive, And Will It Get Cheaper?

    As an Englishman, when I moved to the U.S. more than 10 years ago, two things struck me almost immediately. I was stunned by just how cheap gas was and even more stunned by how many people complained about the price. Of course, the distance one needs to drive in everyday life here makes expensive gas that much more painful, but is gas in the $3.50 to $4 per gallon range really that expensive, and can we expect to see it any lower in the near future? You can certainly point to examples that would suggest that it is expensive.…

  • Surge In U.S. Oil Production Finally Reflected At Pump

    Geopolitical turmoil, particularly in oil-producing regions, usually means higher retail costs for petroleum products, specifically gasoline.Not so this year. Oil analysts say American drivers taking their last summer road trips cars will enjoy the lowest pump prices this Labor Day weekend than they have in four years. That’s despite ongoing conflicts in Iraq, Libya, Syria, and between Russia and Ukraine.Even word of unexpectedly low oil supplies hasn’t kept the price of gasoline from falling. On Aug. 27, the U.S. Energy Information Administration (EIA) reported that crude oil stockpiles fell to 360.5 million barrels last week, the lowest levels since January.Part…