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Premium Article Archive

  • Desperate Times Yield Fantastic Opportunities

    Thursday’s ECB announcement from Mario Draghi gave everyone in the stock market continued hope – with 60b Euros of bond buying power, the stock markets both across the pond and here reacted positively. We’ll see even lower rates than already exist in Europe (even if German Bonds already have negative yields). For the oil complex, the move had a predictable negative impact – a bigger than expected QE program from Europe sent the dollar again soaring, driving oil prices lower and with them, shares in oil companies. We see another expected reaction to another of the 5 inputs to oil…

  • A Trade Idea Based Solely On Risk/Reward

    As some may be aware, I spent nearly twenty years making a living in a dealing room. Contrary to what many believe, those who are paid to trade are, in my experience, not necessarily smarter or better educated than those who pay for the privilege. They have better, faster access to information for sure, and they also have the focus that comes from concentrating on one market all day every day, but it is possible for anybody trading at home to get the same info and to specialize. There is, however, one major thing that sets floor traders apart. Their…

  • Companies Best-Positioned For An Oil Price Rebound

    The U.S. oil and gas rig count continues to fall – having plummeted by 74 rigs for the week ending on January 16 – in a clear sign that the contraction will likely persist for some time. A fresh wave of layoffs and spending cuts were announced this past week. Baker Hughes (NYSE: BHI) said that it would slash 7,000 from its payrolls, for example. Oil Prices Go Down…And Back Up As rigs and roughnecks disappear from the oil patch, production will decline. However, it will not decline right away – there tends to be several month lag period between…

  • Global Energy Advisory – 22nd January 2015

    Politics, Geopolitics & ConflictYemen Shi’ite Houthi rebels in Yemen have taken over the presidential palace in the capital Sana’a after negotiations over a power-sharing deal with the government collapsed, raising the spectre of an all-out civil war. Oil and gas companies have suspended operations and staff are being evacuated. The country’s only gas terminal has ceased operations. We are looking at the southern province of Shabwah and Marib Province here, where the bulk of oil and gas activities are concentrated. Operations have been halted not only due to security concerns but in part as a form of protest over the…

  • Bears Continue To Rule The Markets

    Crude Oil Outlook Crude oil futures began the week in a position to rally based on the technical chart pattern formed the weak-ending January 16, however, there was no follow-through move to confirm the potentially bullish pattern. This is a good indication the market is in the hands of strong sellers. When dealing with technical chart patterns and especially those that go against the dominant trend, the follow-through or confirmation move is the key. Without it, the move is just a guess and quite risky since it is usually in the opposite direction of the main trend and against the…

  • Bottom Fishing In Oil’s Stormy Seas

    Calling a bottom in oil is a fool’s errand. What’s more important here is in trying to gauge how oil will trade AFTER it finds a bottom. And that isn’t looking very constructive, as I’ve pointed out in several columns and on-air. So, is there anything to trade here in the oil patch? Is there anywhere we can go, even in the short term, to try and make some money from a very volatile group? I’ve outlined some long-term plays I think make sense, in refining and some well-run E+P’s, but those plays won’t yield fruit for months. I’ve also…

  • Averaging May Be Worth A Shot Right Now

    I have said in past weeks that I believe the mid-40s would provide support for WTI prices, and so far that has been the case. There has hardly been a spectacular rally but with WTI and Brent both posting gains in the last few days the rout has been stopped, at least for a while. For the opportunists among us that means that now is a good time to start looking for opportunities. Those who have been burnt a few times on the way down by trying to pick a bottom may not want to over commit, even at these…

  • Egypt Tries To Make An Energy Comeback

    Egypt sits at a strategic crossroads, positioned between Africa, the Middle East, and Europe. From the Roman era right up through the 20th century, control for Egypt has been the objective of outsiders to gain a geopolitical, economic, and strategic advantage in international affairs. Where East Meets West The construction of the Suez Canal in the 19th century paved the way for Egypt to act as vital transit hub in the modern era, and as a result, a major thoroughfare for the trade of energy. The Suez Canal sees large volumes of oil and liquefied natural gas (LNG) travel through…

  • Global Energy Advisory – 16th January 2015

    Deals, Mergers & Acquisitions • Mexico's state-run Pemex is in talks with the US Commerce Department to import 100,000 barrels per day of light crude to raise Mexico's gasoline production and boost its refineries. In return, Pemex would send its heavy oil to US Gulf Coast refineries. This would represent another step towards subtly easing the US ban on oil exports. Pemex’s proposal could have the benefit of reducing transportation costs and improve refining margins—at the same time maximizing refining potential in both countries. • Egypt will seal a deal with Russia's Gazprom for the company to supply it with…

  • Clear Indications A Rally Is On Its Way

    With U.S. production levels remaining steady and OPEC not showing any signs of letting up on its current daily production output, investors may have to turn to technical analysis to get an early indication of bottoming action by crude oil futures. There are numerous technical indicators or oscillators to watch, but most are coincidental. In other words, they tend to turn higher after the market has reached its bottom and rallied. Furthermore, when looking at the raw data generated by these types of indicators, they often indicate that conditions have been oversold for several weeks, further supporting the notion that…