Category

Oil

Energy Investing

A Big Time Squeeze for Refineries is About to Begin

After banking some very hefty profits for Energy Advantage and Energy Inner Circle subscribers on refining stocks earlier this year, the entire sector now is about to land "between a rock and a hard place."

Once a high-flying place for investors to earn substantial profits, refiners have been under pressure for the last two months. But that's actually just the beginning of what's to come.

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Energy Investing

To Avoid Horrific Rail Disasters We Need More Pipelines

In the wee hours of July 6, 2013, a freight train derailed. The accident sent several cars hurtling downhill into the small Quebec town of Lac-Mégantic, close to the American border.

The train was full of crude oil, and the cars, without any brakes or engine power, went smashing into the center of town. The ensuing explosion leveled Lac-Mégantic's homey, lakefront downtown. Thirty buildings were destroyed.

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Why "Deleveraging Markets" Will Drive Up Oil Prices

I’m set to appear on Fox Business Network this afternoon (at about 2:50 Eastern) to deliver this revelation, but you heard it here first.

Recently, I have been suggesting a narrow trading band for both West Texas Intermediate (WTI) and Brent crude in London. They’re trading today at about $96.00 and $103.00, respectively.

But two developments are threatening to heat things up yet again – and fast.

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Energy Investing

China Gets Hungry for Arctic Oil

China is the world's second-biggest importer of crude oil and its companies are on the prowl for oil all over the world.

By 2015, its oil companies are expected to produce more oil outside of China's borders than Kuwait pumps, according to the International Energy Agency.

The global Chinese search for energy has put a new region on the top of its agenda: Arctic oil.

The Arctic oil race is heating up as more countries look for paths in to this new hot source of energy profits.

You see, with the warming and melting of the Arctic ice cap, it is becoming easier to possibly exploit the energy riches that lie beneath the cold waters.

Money Morning Global Energy Strategist Dr. Kent Moors discussed the search for Arctic oil and gas in a recent article. Moors said the long-awaited U.S. Geological Survey's Circum-Arctic Resource Appraisal study found that 84% of the total undiscovered oil and gas left on the planet is located above the Arctic Circle. The oil and gas are mainly offshore and in three large basins that lie under shallow seas.

The vast potential of the Arctic for oil and gas piqued the interest of nations with territory north of the Arctic Circle such as the United States, Canada, Russia and Norway.

But it also got the attention of countries – like China – with no direct claim there, but with an increasing appetite for energy.

The Race for Arctic Oil: China and Iceland

Oil. Natural Gas

The Misunderstood Link Between Oil, Natural Gas and Inflation

According to conventional wisdom, there can't be a significant rise in inflation without a corresponding, and usually preceding, jump in energy prices.

In fact, the correlation between energy prices and inflation has become almost a mantra among some market pundits.

Unfortunately, the reality is somewhat different than what's portrayed by talking heads in thirty- second sound bites.

As with most complicated problems, the answer just isn't that simple.  

While the energy sector stretches from hydrocarbons, through alternatives, to the renewed interest in solar, wind, geothermal and biofuels, it is the dominant force in the sector that tends to drive the markets.

That means crude oil and natural gas.

Energy Investing

The Best Investments for the Next Phase of the U.S. Oil Revolution

The U.S. oil industry has been reborn, with oil flowing from new fields like North Dakota's Bakken at rates not dreamed of just a few years ago – and it has created a new crop of best investments for those hunting for energy profits.

U.S. oil production climbed from a low of 5 million barrels a day in 2008 to 7.2 million barrels per day in February of this year.

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Energy Investing

How to Invest in Oil in 2013: The New U.S. Profit Plays

The latest annual Statistical Review of World Energy from energy giant BP PLC pointed out how the U.S. energy landscape has changed in just a few short years – which changes how to invest in oil for maximum profits.

In the Review, BP said that the expansion of both oil and natural gas production in the United States was the fastest in the world in 2012.

In fact, U.S. oil production in 2012 grew at the quickest pace since BP began keeping track of the global oil scene in 1965.

The increase of about one million barrels per day was due, of course, to the exploitation of unconventional sources such as shale and tight oil.

Pair the increasing production numbers with where oil prices will be trading in the near term, and we get a clearer picture of how to invest in oil in 2013… here's why.

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Oil

Why the Fed's QE Policy is Bullish for Oil Prices

Most investors have followed what the Fed's QE policy has done to gold, but few realize its impact on oil prices.

Recently, I talked about how crude was beginning to occupy a position as a store of market value ("Why Oil Is Becoming the New 'Gold Standard," May 20, 2013). The development has been a direct consequence of the flight from holding gold.

That flight may be tapering and a new floor established for the next major spike by the metal.

The problem is there is no agreement on which direction that move will be…

These days, a sudden improvement in gold prices may only extend as far as hedge funds and institutional investors covering shorts.

Nonetheless, there is an interesting parallel developing between the plight of gold and crude oil prices.

Energy Investing

Nigeria is Caught in A Deadly Oil Catch-22

Nigeria generates more than 14% of its GDP from oil exports. Those exports account for 98% of the country's export earnings, and close to 83% of federal government revenue. Nigeria may more than 22 billion barrels in proven reserves, according to the United States Energy Information Administration. Nigeria is the tenth-most oil rich nation on Earth, with 159 oil fields and about 1,481 oil wells in operation.

The numbers look more than promising. On paper, this country should be a prime destination for investment dollars and oil development. So why is Nigeria's natural petroleum wealth on the verge of destroying a large part of the country?

This is a troubling situation in which there's no clear bad guy. The Nigerian federal government, multinational oil companies, and disadvantaged locals are all bad actors in some way.

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Energy Investing

Are the "Special Few" Manipulating Oil Prices?

Last week, a firestorm hit the markets.

In a shocking announcement it was discovered that a "special list" of users had been paying a fee to Thomson Reuters to receive the University of Michigan Consumer Sentiment Index figures two seconds early.

And while most market analysts were aware that there are several tiers of service available for these figures, only a select few knew a higher payment could get them the figure before it is released.

Two seconds. It may not seem like much but it's enough to trigger a massive spike in computerized transactions before the market even knows what the figure is–let alone the average investor.

So what difference does a such a brief leg up to a "special few" mean anyway?…

Quite a bit given what we know about today's computer-generated mega trading programs that make big profits on fractional changes in price.

The massive volume of these transactions destabilize trading environments, cause instantaneous volatility spikes, and drive a range of results having nothing to do with fundamentals or actual conditions.

Not to mention how it all flies in the face of the idea free exchange markets are justified on the outmoded assumption that there is equal access and availability of information.

Now there are possibly even more serious questions emerging and they involve a matter directly relevant to you.

We are learning the same manipulation may be occurring in the energy sector.