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Premium Article Archive

  • 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.…

  • Buying Coal Stocks Is Still Too Risky: Shorting This One Isn’t

    I have been contributing here for about six months and in that time I have covered most aspects of the energy markets, with one glaring exception. Not once have I mentioned coal. There is a good reason for that. I regard coal stocks as inherently too risky and, without wishing to be too blunt, I wouldn’t buy them with somebody else’s money, let alone my own.Risk is a funny thing, or rather our perception of it is. I well remember sitting in a restaurant with a good friend who was horrified by my choice of tuna as an entrée. “Don’t…

  • LNG Exporters Struggling to Find Customers

    Competition between exporters of liquefied natural gas is heating up. In fact, the competition is getting so fierce, that suppliers are actually beginning to see their advantage erode – buyers are finding themselves increasingly comfortable turning to the spot market to meet their energy needs, eschewing long-term contracts so coveted by exporters. The reason is that more LNG capacity is nearing completion, and that pace will accelerate over the next two to five years. And the shifting dynamics boil down to the developments in two countries – Australia and the United States.Major gas suppliers invested top dollar in Australia in…

  • Global Energy Advisory - 29th August 2014

    Geopolitical/Conflict DevelopmentsIraqi Oil UpdateIraqi government forces have reportedly thwarted another attempt by the Islamic State (IS) to take over the Baiji refinery in northern Iraq. This refinery accounts for around one-third of Iraq’s total production, but produces for the domestic market, not exports. Key producing fields, for exports, in the south remain unaffected so far by the IS advance. In the meantime, Iran has come out with clear support for new Iraqi Prime Minister, Shi’ite Haider al-Abadi, after the ouster of Nouri al-Maliki.  Iran has also been providing Iraqi Kurdish forces with weapons to fight back IS in the north,…

  • Energy Market Review & Forecast – 29th August 2014

    Weekly Crude OilOctober crude oil futures continued to consolidate on the weekly chart after reaching a low two weeks ago at $92.50. Speculative investors may conclude that this is a buying opportunity, but trend traders are likely to treat any rally as the next potential shorting opportunity.End-of-the-month position squaring and profit-taking by hedge fund and other money managers are helping to stabilize the market following the prolonged break in price and time from the June top at $105.55. However, the biggest influence on the market last week was the surprise drawdown in supply.The latest U.S. Energy Information Administration supply and…

  • 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…

  • Why A Supposed Telecom Company Should Be In Your Energy Portfolio

    I am, as regular readers may have gathered, somewhat of a contrarian by nature. I put that down to nearly twenty years in currency dealing rooms around the world, where such an attitude serves well. My wife might believe that it is just that I am an awkward so and so, but that is my story and I’m sticking to it. Anyway, as a contrarian, a stock that has lost around 40 percent in three months is always of interest to me; hence my initial interest in Mas Tec Inc. (MTZ).  The first thing that might strike you about the…

  • Coal Exports from West Coast Running Out of Time

    The U.S. is burning coal at a slower rate, due to cheap natural gas and environmental restrictions on air pollution. With utilities unable to justify weighty investments in pollution control technology, they have opted to shift their generation towards natural gas and renewable energy.Not only has this nearly zeroed out U.S. coal imports, the decline of coal-fired power plants is forcing coal producers to look abroad to push their product. For several years, the U.S. has found willing buyers overseas. The total volume of coal exported from American shores jumped almost 45% between 2008 and 2013, a remarkable increase. But…

  • Global Energy Advisory - 22nd August 2014

    Regulatory AlertsA new tax law granting tax credits to oil companies appears to have survived a close referendum battle on Wednesday, with partial vote counts in showing that efforts to repeal the legislation trailing behind. The legislation, Senate Bill 21, only narrowly made it through the Senate last year, advertising itself as a way to attract investment for new wells to produce more for the trans-Alaska pipeline. However, critics say it provides no guarantees that oil companies will invest in Alaska.Mozambique has approved favorable new petroleum laws that open the way for new oil and gas bids as well as…

  • Summer Selloff in Energy Futures Markets Coming to an End?

    The price action late this week in the three major futures energy markets: crude oil, gasoline and natural gas, suggests the summer sell-off may be nearing its end. Keep in mind that only the daily charts are showing signs of short-term bottoming action. The longer-term weekly and monthly charts still have downside biases. For the most part, the trading action is being fueled by technical chart factors and not by fundamental factors. Technically, these three markets are oversold. This means that the size of the sellers on the offer is shrinking, shifting the edge to the bid side, or the…