Energy / Oil Prices

• How the Situation in Crimea Could Cause Oil Prices to Fall

  Moscow’s aggression in Crimea has markets in a panic and bulls predicting continued increases in the price of oil should tensions endure. Nonetheless, there is a chance that Russia’s Ukrainian incursion could result in the exact opposite effect—a decline in oil prices. There are two different ways the Crimean crisis could result in decreased prices: a positive supply shock from the American strategic petroleum reserve (SPR) and a negative demand shock from financially crippled emerging markets. On the supply side, the West is searching for a way to oppose Russian aggression but must tread a fine line between effective resistance…

• Russia’s Eastern War: Part Two?

  The crisis in the Crimea has already raised the price of Russian oil by $2 a barrel, as of Monday creating havoc on some energy markets. And this is only the beginning of what could turn onto a long and complicated crisis pitting the former Cold War foes into a new hot conflict.  Oh yes, and the Russian rouble is the losing value to the US dollar.The uncertainty prevailing in Ukraine and subsequently the uncertainty in the Crimea, a strategic peninsula situated at the southern tip of the country, could send oil prices soaring upwards some more if the current…

• Four Countries that Could Send Oil Prices Up

  The week of February 17 has been a violent one, with protests, intense political unrest, and many casualties in several countries around the world. Protestors in Ukraine are stealing the headlines, with a Molotov-cocktail fueled ring of fire. These events are significant, but for the energy world, it is the sudden wave of instability in oil producing countries that are on investors’ minds – unrest that threatens to send oil prices skyward. With shale oil surging in the United States, sometimes we in the West forget how much we depend on some politically wobbly countries to meet global demand. Oil…

• One for the Speculators Amongst You

  The last several weeks have seen some very strong US crude oil prices, adding strength to my prediction that we'll likely see average prices of well over $100 a barrel for crude oil for the remainder of 2014.  Along with this prediction should come some actionable US exploration and production companies that are being undervalued based upon continuing high and sticky crude prices.  I've highlighted a few of these recently, including Noble Energy (NBL), EOG Resources (EOG), Continental (CLR) and Cimarex (XEC).  But most of my readers want even more risk for part of their energy portfolio and the chance…

• Big Oil Sheds Assets to Fix Balance Sheets

  The oil industry may be in the midst of entering a new phase of high costs and slower growth. New oil discoveries are harder to come by, and the scramble to replace depleting production is costing more and more. The days of the large discovery that is easy to tap into are gone. Now, the industry has to go to the ends of the earth to get more oil. And for years, the majors were happy to do so – capital expenditures rose significantly over the last decade for most of the largest oil companies.  But the main problem? Production…

• South Korea Joins Japan in Oil Payments to Iran

  The government of South Korea is preparing to issue a payment to Iran for crude imports as limited relief from sanctions in line with a six-month deal over Iran’s nuclear program gets underway, making it the second country to so do after Japan, Reuters reports.In December 2013, South Korean’s crude oil imports from Iran increased over the previous months, according to Reuters, and the Iranian central bank has up to $5.6 billion in South Korea, in two won-denominated accounts. The news agency quoted an unnamed source as saying that South Korea’s payment to Iran would likely be made in early…

• Oil Market Predictions for 2014

  For my last column of 2013, I’ll give a few predictions for the energy markets for 2014 and one in particular where I am almost alone among the energy analysts out there:  Oil will see significantly higher prices in 2014 than in 2013.Most analysts I read see the fundamental picture in oil from a US-centric point of view; that is, an increasingly strong production trend from the oil shale plays here in the US from the Bakken, Eagle Ford and newly developing Permian basin and couple that with an increasing efficiency and demand slackening here in the US which has…

• Oil Market Forecast & Review 27th December 2013

  February crude oil futures continued the rally it began several weeks ago at $92.10. Based on the break from $106.22 to $92.10, the market has already retraced more than 50% of this range. The retracement zone target at $99.16 to $100.82 could slow down the rate of ascent, but so far it doesn’t look like the move is attracting fresh shorting pressure despite the downtrend on the weekly chart. The main trend will change to up on a trade through $102.52. A trade through $92.10 will reaffirm the downtrend. Because of this, one has to assume that the current move…

• How Low Oil Prices could Cause the Death of Oil

  There is a lot of confusion about which limit we are reaching with respect to oil supply. There seems to be a huge amount of “reserves,” and oil production seems to be increasing right now, so people can’t imagine that there might be a near term problem. There are at least three different views regarding the nature of the limit:Climate Change. There is no limit on oil production within the foreseeable future. Oil prices can be expected to keep rising. With higher prices, alternative fuels and higher cost extraction techniques will become available. The main concern is climate change. The…

• Why the Iranian Nuclear Deal Could Lead to an Increase in Oil Prices

  Why is Brent crude rallying in the face of a new Iran nuclear deal?  Two words might explain it:  Saudi Arabia. No one was more upset, save for the Israelis, by the recent agreement between the Iranians and the US than Saudi Arabia, the Iranians natural enemy in the Middle East.  By the number of visits that Secretary of State John Kerry made to the Kingdom and the appearance of Saudi sovereign investor Prince AlWaleed here in the US, it was clear that the message that the Saudis were sending to the US government went unheeded:  the US inked a…