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Energy / Oil Prices

  • This Large Cap Explorer is Looking Very Attractive

    In a recent column, I proposed a ‘super spike’ in oil prices – implying a super opportunity continued to exist in the exploration and production oil companies, particularly because they’ve been underperformers on the back of recently weak oil prices.  I proposed a lack of production growth in the traditional oil areas of the Middle East as the primary cause of spiking prices, again implying that US-focused E+P’s were likely to benefit the most. In the end, only an individual assessment of E+P stocks will benefit the investor, and in this column I revisit an old favorite of mine, Apache.…

  • The Coming Super Spike in Oil Prices

    In 2005, Goldman Sachs oil analyst Arjun Murti wrote of an oil “super spike”, with prices reaching $200 a barrel.  Murti was amazingly prophetic with that call, as oil topped $147 a barrel in 2008 and would likely have made his predicted $200 had the general economy not suffered an historic meltdown.Now I am seeing another opportunity for $200 oil, even though the current oil market looks more ready to drop to $75 first.  It might do that, but then I can see the coming of the next major oil “spike” – and I’m also looking for at least a…

  • How cheap is “cheap” oil?

    Everyone seems to agree that the world is running out of cheap oil. But how cheap is cheap? Until we know it’s hard to say exactly what the world is running out of, or indeed if it’s running out of it at all.  Clearly what is needed is for someone to put a dollar value on cheap oil, and here I do my best to come up with a number.Before we can start we need a definition of “cheap”. Webster’s defines it as “worth more than the price paid”, which is probably as good a definition as any, so we…

  • Dropping Oil Prices Threaten Moscow’s Budget

    Oil and gas are at the heart of the Russian economy and are largely responsible for keeping Moscow’s government budget in balance. But the recent decline in the price of oil from the North Sea and Texas has now spread to Urals crude, giving President Vladimir Putin one more economic headache.The price of Urals crude fell just below $100 per barrel on Aug. 18, an 18-month low. On Aug. 19, it dropped to less than $97 per barrel. These declines coincided with similar drops in the price of Brent crude from the North Sea and U.S. oil.The reasons are fairly…

  • Renewed Violence In Iraq and Libya Could Send Oil Prices Up

    Violence has returned to key oil-producing countries Iraq and Libya after a brief period of calm.Shelling and firefights between militias over the control of a key airport in Tripoli have hurled Libya back into a state of emergency, punctuating several weeks of escalating violence in the troubled North African country. In mid-July, the Libyan government appeared to gain more control over the country’s restive provinces when it secured a deal with rebels in the east, which led to the reopening of the major ports of Es Sider and Ras Lanuf. The accord led to a drop in oil prices as…

  • Global Energy Advisory – 18th July 2014

    Pipeline UpdatesA new pipeline is being proposed from North Dakota’s Bakken oil fields through 17 Iowa counties, ending in Illinois. The proposal for the 1,100-mile underground crude pipeline comes from Texas Energy Transfer Partners, which faces plenty of regulatory hurdles across states. The existing plan is to have the pipeline operational by the end of 2016. The “Bakken Pipeline”—as it is already being named—would have the capacity to transfer 320,000 barrels of crude oil per day. Canada’s Enbridge is starting talks with the authorities in Alaska for the construction of a proposed $8 billion natural gas pipeline that could become…

  • Gas Prices Soar, But Have Probably Peaked For Now

    As Americans head into their July 4 holiday weekend, gasoline prices are at their highest levels for this time of year since 2008. The surge in prices is a direct result of recent turmoil in Iraq. The good news is that prices may have peaked for now, as tensions have eased. Barring any new unforeseen geopolitical flashpoints, oil prices could have reached a temporary peak, and prices could come down in the weeks ahead. There are multiple reasons for the improved outlook. First, the unrest in Iraq has leveled out for now, with ISIS militants having been stopped short of…

  • Oil Prices Drop, But Probably Not For Long

    The price for a barrel of oil fell on word that more production was coming from key OPEC members, but a report from the International Energy Agency (IEA) says the drop may not last because Middle East oil producers are facing a shortfall in investments.A Bloomberg survey of oil companies, producers and analysts show production from members of OPEC rose in May by 75,000 barrels per day (bpd), to 29.98 million. Production levels were boosted by a 70,000 bpd output from Saudi Arabia, its first increase this year. Even more oil is expected this week from Libya, which has struggled…

  • Why You Have to be Long the Domestic E+P’s.

    The big head fake in energy, the one that has somewhat confused me has been how the fantastic quarterly results from the independent E+P’s has affected the domestic price of crude oil.  Or, in fact, how it has not affected it.  With massive production growth going again on record in the numbers of companies like EOG Resources (EOG) and Cimarex Energy (XEC) and dozens of others, we’ve seen a glut of crude oil pour into the Mid-continent and literally search for a place to stay.  While I’ve maintained that even a large influx of new crude wouldn’t have enough power…

  • Instability In Libya Continues To Be A Drag On Oil Prices

    The price for the U.S. crude oil benchmark has moved closer to $102 per barrel in trading in part because of renewed concerns over Libya, once one of North Africa's top exporters.  On concerns Libya has not yet broken rebels’ grip on oil export terminals, West Texas Intermediate was trading at $101.40 per barrel, while the price for Brent moved at $109.10.Though U.S. crude oil levels may provide some relief to market worries, the protracted stalemate over Libyan crude, coupled with continued unrest in Ukraine, could push oil prices higher through this summer.In early April, the government in Tripoli brokered…