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Article Archive

  • Crude Oil Chokepoints And Why Yemen Matters

    About half the world's oil production is moved by tankers on fixed maritime routes, according to Reuters. The blockage of a chokepoint, even temporarily, can lead to substantial increases in total energy costs and thus, these chokepoints are crucial to global energy security. While Hormuz remains the largest chokepoint (and along with Bab el-Mandeb explains why Yemen matters so much).And while Yemen is key for The Strait of Hormuz...With Bab el-Mandeb even more specifically problematic if Yemen tensions get too extreme...Related: Who Benefits Most From Cheap Oil? Source: JPMorgan...it is China's growing presence near The Strait of Malacca that is perhaps…

  • Impending Iran Deal Could Crush Current Rally

    The headline for the week was Saudi Arabia’s attack on rebels in Yemen, which threatens to ignite tensions between regional rivalries in the Middle East. The proximate cause was the advance by Houthi rebels on Aden where the Yemeni President is located. Saudi Arabia spent several weeks secretly reaching out to its regional allies to build support for an attack on the Houthis, signing up support from Turkey, Egypt, and an array of Gulf States. The advanced knowledge of the United States government appears to be a matter of dispute, with some top level Pentagon officials saying they were only…

  • Can Argentina Capitalize On Its Vast Shale Reserves?

    Argentina, once a regional energy leader, is now better known for financial busts and bombastic politicians than hydrocarbons prospects. Still, with a resource potential both vast and untapped, the nation has never been far from energy investors’ minds. The question today is just how much Argentina is willing to change and how this plays into a low oil price environment that is already negatively impacting investment elsewhere. Argentina’s deliberate efforts to appease some of its international creditors, combined with an overhaul of the nation’s hydrocarbons framework have the potential to lure foreign investors back. The promise of a change of…

  • This Struggling Commodity Is Still Booming In One Part Of The World

    As I discussed last week, the commentary around the global coal business has been doom and gloom lately. But few investors recognize that the market is booming in one part of the world: India. Local statistics released this week show that the Indian coal story is still very much going strong. With the current year yielding double-digit growth in demand. Reuters interviewed India's Coal Secretary Anil Swarup on Tuesday. With the Secretary noting that India's coal imports are likely to come in at 200 million tons for the fiscal year ended March 31.Related: Oil Markets Blow Yemen Crisis Out Of Proportion…

  • Is Ukraine‚Äôs Embattled Energy Sector A Lost Cause?

    The back and forth, the ebb and flow, or business as usual continues in Eastern Europe. As another interim gas deal approaches its deadline, Ukraine will temporarily halt natural gas purchases from Russia – at least until a new deal is signed. Thus far, Ukraine has quite successfully demonstrated the limitations of short-term solutions for long-term problems. Its goals, while limited in scope, remain attainable, but a restive business class and marginal change under President Petro Poroshenko place success just beyond reach. The ‘winter package’ agreed upon in October saw Russian gas return to Ukraine after a near six-month hiatus.…

  • Who Benefits Most From Cheap Oil?

    We are living in a world obsessed with oil and its price movements. Some time back, when all the trade pundits were predicting a stable 100$ benchmark, the prices fell… and how! The current fall in the oil price has been particularly harsh and excruciating for some of the prominent players such as Russia and Venezuela. To add fuel to the fire, on March 16, 2015, the oil price plummeted to a 6-year low level of 42.98 dollar per barrel. With the possible addition of Iranian oil to the global oil supply, the refusal of OPEC to cut down its…

  • Oil Markets Blow Yemen Crisis Out Of Proportion

    Saudi Arabia launched airstrikes in Yemen, causing oil prices to jump on fears over Middle East instability. The markets clearly reacted with concern over the rising violence in the Arabian Peninsula, which pits Saudi Arabia against Iran in a proxy war. Saudi Arabia is targeting Shia rebels seeking to topple the Saudi-backed Yemeni government. Reuters reports that Saudi bombs targeted an airport and airbase held by the Houthis, which seized Yemen’s capital of Sanaa last September. “We will do whatever it takes in order to protect the legitimate government of Yemen from falling,” Adel al-Jubeir, the Saudi ambassador to the…

  • Forget Rig Counts And OPEC, Media Bias Is Driving Oil Down

    We are in an age of propaganda where most people argue viewpoints not based on facts but on selective perception basis. They cherry pick what supports their argument then ignore the rest to make their case. Facts are no longer weighed objectively and in some cases ignored altogether. This has been going on for years as the “talking heads” come on TV and talk about various things and positions they own attempting to sway others to buy or sell based on a TV appearance. Well what has occurred the last 6 months when the steep decline in oil occurred went…

  • Good News At Last For Petrobras

    Petrobras announced on March 24 that it has discovered a significant deposit of oil just of the coast of Rio de Janeiro. The company says that it encountered a 200 meter column of hydrocarbons in its Libra block, at depth of about 5,780 meters (18,963 feet). The news was a major boost to a company that has been drowning in debt and scandal. Petrobras has now amassed $130 billion in debt, having added $22 billion in additional debt in just the last six months because of the deteriorating Brazilian currency. Petrobras, by and large, earns revenues in reals but owes…

  • Metals Markets Set For Another Shock From This Key Producer

    One of the most ground-breaking changes in metals the last year was the Indonesian export ban. The government-mandated halt to shipments of unprocessed concentrates caused widespread disruptions in several global markets. And triggered bull runs for metals like nickel, as buyers worldwide scrambled to find alternate supplies. Now it looks like Indonesia's policies may be shifting again. At least for one metal. Aluminum.Related: The Most Challenging Oil And Gas Projects In The World Local press reported this week that government officials are considering a reversal of the export ban on unprocessed bauxite -- the feedstock that goes into making alumina and…