• 3 minutes e-car sales collapse
  • 6 minutes America Is Exceptional in Its Political Divide
  • 11 minutes Perovskites, a ‘dirt cheap’ alternative to silicon, just got a lot more efficient
  • 41 mins GREEN NEW DEAL = BLIZZARD OF LIES
  • 3 days Does Toyota Know Something That We Don’t?
  • 6 days OPINION: Putin’s Genocidal Myth A scholarly treatise on the thousands of years of Ukrainian history. RCW
  • 3 days World could get rid of Putin and Russia but nobody is bold enough
  • 2 days America should go after China but it should be done in a wise way.
  • 6 days CHINA Economy IMPLODING - Fastest Price Fall in 14 Years & Stock Market Crashes to 5 Year Low
  • 5 days China is using Chinese Names of Cities on their Border with Russia.
  • 6 days Russian Officials Voice Concerns About Chinese-Funded Rail Line
  • 5 days CHINA Economy Disaster - Employee Shortages, Retirement Age, Birth Rate & Ageing Population
  • 6 days Putin and Xi Bet on the Global South
  • 6 days "(Another) Putin Critic 'Falls' Out Of Window, Dies"
  • 7 days United States LNG Exports Reach Third Place
  • 7 days Biden's $2 trillion Plan for Insfrastructure and Jobs
Carmakers' EV Enthusiasm Fizzles Out

Carmakers' EV Enthusiasm Fizzles Out

Big Auto, which so recently…

Standard Chartered Sees Oversupplied Gas Markets, Tightening Oil

Standard Chartered Sees Oversupplied Gas Markets, Tightening Oil

Whereas physical traders appear increasingly…

Martin Tillier

Martin Tillier

More Info

Premium Content

The Implications Of Falling Interest Rates For Energy Investors

Inversion is back in the news. Treasury yields have been falling dramatically over the last week or so, with yield on the 10-Year Treasury Note falling to below 2.2% for the first time since the middle of 2017. Given that the Fed has raised short-term rates significantly since then, that has resulted in longer-term yields falling below those on short-term debt, giving an inverted yield curve. That is typically taken as a sign of upcoming economic weakness in the U.S. and even of an impending recession, but what does it mean for energy investors?

(Click to enlarge)

The most obvious implications are bad. If the market is correct and we are heading towards recession in the U.S., that would have a significant effect on oil demand, pushing prices ever lower. That, in turn, will add to the downward pressure on oil stocks and energy stocks in general.

Nor is the broader picture looking good for oil prices. Yesterday’s tweet from President Trump announcing tariffs on Mexico has reinforced the view that he believes in the power of tariffs to advance a multitude of policy positions, even those not directly related to trade and economics. For a commodity such as oil, where global growth expectations play such an important role in pricing, that is a very bearish sign and will add to the pressure on energy stocks.

Even as all that happens, though, the very low yields on Treasuries and other fixed income securities may well put a floor on stocks of integrated,…





Leave a comment

Leave a comment




EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News