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Energy / Oil Prices

  • Gulf Projects Saved From Brunt Of Oil Price Storm

    The plunge in oil prices may be hurting many companies with on-shore operations, but those drilling in the Gulf of Mexico (GOM) appear to be at least somewhat immune to the problem as it may correct itself by the time the Gulf fields begin producing, according to the US Energy Information Administration (EIA). The agency reported March 3 that energy companies have been back at work producing oil and gas from deepwater wells in the GOM since the five-and-a-half month moratorium on drilling there prompted by the Deepwater Horizon accident of 2010, the worst in US history. Even after the…

  • Crude Down Following Biggest Weekly Inventory Rise In 14 Years

    So much for last night's lower than expected API build, DOE data shows a massive build compared to the 3.95 mm barrels expected: • *CRUDE OIL INVENTORIES ROSE 10.30 MLN BARRELS, EIA SAYS This is the 8th build in a row and biggest weekly inventory rise in 14 years.This is the fastest inventory build EVER...and WTI has broken back below $50...Related: No Real Oil Price Relief Until Q3Unambiguously good still? By ZerohedgeMore Top Reads From Here’s What Will Send Oil Prices Back Up Again Could Oil Prices Plummet A Second Time? Don’t Read Too Much Into The Rig Count

  • No Real Oil Price Relief Until Q3

    Most of the publicly traded upstream oil & gas company share prices have moved up off the lows they set in December and January as crude oil prices have stabilized. Although it is encouraging, I do expect to see lots of share price movement (up and down) as the oil & gas sector struggles during the first half of 2015. We are not out of the woods yet, but there is definitely light at the end of the tunnel and investors are beginning to return to the sector. The oil markets should tighten in the third quarter. The International Energy…

  • This Is Why Warren Buffet Dumped His Exxon Holding

    America’s leading investor, Warren Buffett, gave a wide-ranging interview to CNBC in which he gave a fitting explanation of why his company, Berkshire Hathaway, sold all its stock in Exxon Mobil Corp. in the fourth quarter of 2014. Buffett’s bottom line? “We thought we might have other uses for the money,” he said, and was quick to add, “Exxon Mobil is a wonderful company.” The Nebraska-based entrepreneur, often referred to as the “Oracle of Omaha,” didn’t say what “other uses” he might have for the $3.7 billion that he’d invested in Exxon Mobil. But he did say why he sold…

  • Could Oil Prices Plummet A Second Time?

    Are oil prices heading for a double dip? The surge in shale production has produced a temporary glut in supplies causing oil prices to experience a massive bust. After tanking to a low of $44 per barrel in January, falling rig counts and enormous reductions in exploration budgets have fueled speculation that the market will correct sometime later this year. However, there is a possibility that the recent rise to $51 for WTI and $60 for Brent may only be temporary. In fact, several trends are conspiring to force prices down for a second time. Drillers are consciously deciding to…

  • Don’t Read Too Much Into The Rig Count

    Oil prices don’t change based on weekly rig count reports. Yet every week, there are proclamations by analysts that oil prices are poised to recover because of some change in the Baker Hughes North American rig count. Others state that U.S. tight oil production will continue to rise despite falling rig counts because of the miracle of shale rig efficiency. What this really means is that nobody has any idea about when oil prices will rebound. As I have previously written, that is because nothing has happened so far to cause a change in oil prices. What can we learn…

  • Here’s What Will Send Oil Prices Back Up Again

    Oil’s rapid decline since August of last year has been dramatic. To listen to some commentators you would also think it is unprecedented and irreversible. Those claiming that oil will continue to fall from here and remain low for evermore, however, are flying in the face of both history and common sense. The question we should be asking ourselves is not if oil prices will recover, but when they will.Figure 1: Inflation adjusted WTI since Jan 1985. Chart from From June of 2014 until now, the price of a barrel of West Texas Intermediate (WTI) crude oil has fallen…

  • Selling Pressure Rises As Rig Count Drop Slows

    Technical and fundamental factors weighed on crude oil late in the week, which could be signaling support has been pulled from the market. On Thursday, sellers overcame buyers at a key area on the daily chart and buyers also succumbed to another bearish inventory report. Throughout February, April crude oil futures had been range bound, trading inside the 2015 range of $44.37 to $55.05. This futures contract spent much of the month hovering around while trying to establish support at its retracement zone at $49.71 to $48.45. Buyers made two valiant attempts to breakout to the upside, but each move…

  • Oil Prices Tumble As Pace Of Rig Count Decline Slows

    With production and inventories at record levels despite the total collapse in rig counts, all eyes remain on Baker Hughes data for any signal the algos can use to mount a run. The total rig count fell for the 12th week, down 43 to 1267. This 3.3% decline is the slowest drop in 6 weeks and oil prices are sliding on this news. The key level to watch for WTI is $48.24 which moves it into the red for the 8th month in a row. • *U.S. TOTAL RIG COUNT -43 TO 1,267, BAKER HUGHES SAYS• *U.S. OIL RIG COUNT…

  • Paranoia And Purges For Venezuela As Oil Misery Continues

    As the finances of Venezuela continue to deteriorate under the collapse of crude oil prices, the government of President Nicolas Maduro is becoming more paranoid and vindictive. Venezuela derives the vast majority of its export earnings from sending oil overseas. With the largest endowment of crude oil reserves in the world, the oil-driven economy worked well for the late Hugo Chavez: he provided generous support for the poor, and built allies in the western hemisphere by dispensing cash and cheap oil in exchange for political allegiance. But state-owned PDVSA has struggled to keep production up. Rather than using its earnings…