Crude Oil Prices
These Oil Stocks Are the Big Winners in This Year's "Summer Pop"
I have been "in the field" for the past several days and will be back in circulation later this week. But I wanted to send you a note on what's been taking place recently.
The last two trading sessions have seen a spike in oil stocks. The rise has been focused on companies that provide services to early-stage field development, as well as for crude production.
Now, we have witnessed a similar "summer pop" in each of the past three years. It tends to signal a rise in expected medium-term demand for both crude oil and oil products.
However this time around, the improvement isn't reflected in companies across the board, but rather in those emphasizing geographically specific field plays.To continue reading, please click here...
How to Invest in Oil's Final Frontier: The Arctic
Investors searching for how to invest in oil in 2013 should be focused on these latest developments from the Arctic.
In fact, countries are racing to get a piece of what could be the final frontier for oil...
As ice melts in the Arctic region, oil and gas trapped beneath the water becomes more accessible.
Money Morning Global Energy Strategist Dr. Kent Moors recently explained to Money Morning members about the search for Arctic oil and gas.
He spoke about the years-in-the-making U.S. Geological Survey's Circum-Arctic Resource Appraisal. The study found that 84% of the total undiscovered oil and gas left on the planet is located above the Arctic Circle, mainly offshore and in three huge basins that lie under shallow seas.Read More...
- Why Oil Is the New "Gold Standard" As gold loses some of its luster, Dr. Kent Moors explains why crude oil has become a much better reflection of stored market value. Read more... Read More...
Oil Price Manipulation Awakens Libor, Enron Ghosts
Last July, we warned you that oil prices could potentially be manipulated in similar fashion to the London Interbank Offered Rate (Libor), and now a recent raid of major oil companies highlights this growing danger to the $3.4 trillion-a-year crude market.
The European Commission last week stormed the offices of Royal Dutch Shell PLC (NYSE ADR: RDS.A, RDS.B), BP PLC ( NYSE ADR: BP), and Statoil ASA (NYSE ADR: STO) as part of the ongoing investigation to find out whether companies are manipulating oil prices and, if so, how long it has been going on and the possible ramifications.
"The commission has concerns that the companies may have colluded in reporting distorted prices to a price reporting agency (PRA) to manipulate the published prices for a number of oil and biofuel products," the EC said in a statement.
Besides major oil companies, big banks are active in the energy market and would likely benefit from any manipulation, David Frenk, director of research at the financial reform group Better Markets and a former commodities analyst, told CNN.
The ordeal has brought back memories not only of last year's Libor scandal but also of the actions taken 12 years ago by Enron to control energy prices.Read More...
- How to Hedge Oil Prices in Volatile Markets The prospects are very good for the oil prices. But the markets promise to be volatile. Here's the best way to build an "oil insurance plan." Read more... Read More...
Frack or Fail: Is It Time For California's Liberals to Go?
California is in a LOT of trouble financially. Cities are going under and the state can't balance its budget. It also has almost half a trillion in state pensions to fund and revenue is drying up.
But there is one way out: Tap the largest oil and gas play in the Lower 48.
The question is, whether this left leaning state crowded with special interests like the Sierra Club will actually let oil services companies begin to start fracking on state land.
In our inaugural Money Morning Fight Club brawl, Frank Marchant and Garrett Baldwin square off on this contentious issue. The best part is we are asking you to turn in your scorecard and pick the winner at the end.
So let's get ready to rumble...
- Buy, Sell or Hold: Strong Oil Prices Make Apache Corp. a Good Bet Apache Corp. (NYSE: APA) is not your average oil company. Even with oil prices still comfortably in the $90.00 range, Apache shares recently fell below their 52-week lows. In fact, since April 2011 Apache shares are down by 44%. But with a strong balance sheet and healthy sales forecasts, this company is doing all the right things. Read More...
Australia Shale Oil Discovery Continues the Country's "Lucky" Streak
Investors are well aware of the shale oil revolution in the United States. But the "revolution" does not end here; it is spreading globally to countries as diverse as China and Poland.
There is one country in particular though that may experience circumstances similar to the United States, if not greater.
I'm talking about Australia, which has often been called "The Lucky Country." That description was first penned in 1964 by Donald Horne and he actually meant it negatively at the time.
But in recent decades, the term has been given a positive spin thanks to Australia's abundance of natural resources and its geographical location near the world's biggest consumer of commodities - China.
And Australia may have struck luck again thanks to the recent announcement of a massive shale oil discovery.Read More...
How China and Saudi Arabia Mean You Should Bet on Higher Oil Prices
As Money Morning Global Energy Strategist Dr. Kent Moors pointed out not long ago, the sky is not falling on oil prices despite what the doomsayers believe.
There are two crucial countries that are behind the recent rise in oil prices: China and Saudi Arabia.
And if these two nations keep on their current path, it will mean one thing...
Even higher oil prices in 2013. Here's why.Read More...
- The Doomsayers Are Wrong About Oil Prices According to some prognosticators, the world is going to end. And just before that happens, you are going to lose all your money in the energy market. Why? They rely on three misguided arguments. Here's what they are and why they're wrong. Read More...
Why Oil Prices Could Soar 40% by Summer
Oil prices have continued their upward move that began at the end of 2012, gaining over 8% in the past month.
Now, an oil analyst with Goldman Sachs Group Inc. (NYSE: GS) predicts Brent crude could soar much higher in the next few months.
Jeff Currie, GS's head of commodity research, said he wouldn't be surprised "if we woke up in summer and oil cost $150" per barrel.
That would be a 35% gain from Brent's recent price of $111.
Using the narrowing spread between the Brent price and that of West Texas Intermediate (WTI), at $95, Currie's forecast implies a 40% increase in WTI prices.
And there are many reasons oil could hit those highs by summer, or even sooner.Read More...
Play the Bakken Oil Boom Like Buffett
Many investors have heard of the Bakken oil field in North Dakota and Montana, but most are unaware of how important this formation is becoming to the U.S. economy.
More germane to investors is the fact that there is still a lot of money to be made from Bakken oil in the months and years ahead.
Just ask Warren Buffett.
He spotted the potential of Bakken oil well ahead of most and bought a non-energy company that would benefit greatly from the boom. Three years ago he bought Burlington Northern Santa Fe (BNSF) Railway Co. for $26 billion.
That railroad is now one of the main beneficiaries of the Bakken oil boom. (And people thought he just had always wanted to own a train set!)
"We're the 1,000-pound gorilla in the oil markets," BNSF CEO Matt Rose told Bloomberg News. "Crude by rail is going to be really strong for us. It's been a real benefit to us to replace some of that lost coal business."
The Bakken oil formation isn't just an investing opportunity; it's transforming the U.S. energy landscape.Read More...
Where Oil Prices Are Headed In the Face of the Fiscal Cliff
You have heard all the stories of what will happen when the U.S. economy falls over the fiscal cliff.
As I write this, it appears that will happen--at least on paper.
Of course, it will take some time for the tax increases to kick in, while the automatic spending cuts may take a month or longer.
That may make it easier for some Members of Congress to act. Since the taxes will have technically increased, it will be easier for them to vote for an artificial tax cut.
I consider this the pinnacle of absurdity.
Subjecting most Americans to this charade-making them vulnerable to cuts in paychecks, dividends, and social security benefits merely to make some political brownie points-is the height of travesty.
But here we are.
Even if there is a this weekend or Monday, nobody will know what that means for several weeks. This will drag the drama on for a while longer as the precocious children inside the Beltway refuse to play on the same ball field.
Now we all know how this will end. There will be a stopgap measure rather quickly (probably around the time most receive that first paycheck of the New Year) to prolong the process into the first quarter - right into yet another showdown on increasing the debt ceiling.
Isn't there anybody else out there as sick of this as I am?
But in the end, we are interested in what the shenanigans mean for the energy sector.
Oddly enough, gas and oil prices have acted as if the cliff were an ant hill.
To continue reading, please click here...
2013 Oil Price Forecast: Why Oil Remains a "Must-Have" Profit Play Next Year
One of the most important topics we discussed in Moscow last week were the various forecasts of where crude oil prices are likely to be in 2013.
These 2013 oil price forecasts were all over the place, owing to the high level of uncertainty on a number of basic elements.
According to the Russian Ministry of Energy, or Minenergo, the "official" government estimate has oil prices low - at about $80 a barrel in 2013.
However, there were other estimates floating about. The Ministry of Finance (MinFin) set up what can only be described as a recession approach. That figure puts oil prices at $62-$65 a barrel.
Then there was the Ministry of Economic Development (MED). MED considered both domestic and external trade considerations. The estimate coming from this ministry was lower than that of Minenergo, but at $75 a barrel was higher than that of MinFin.
Against this backdrop of competing forecasts made by battling Russian ministries, estimates from the outside including my own are much, much different-as in decidedly to the upside.
Granted, all of the non-Russian suggestions cite the three unknowns limiting the cost of crude elsewhere: the fiscal cliff, the Eurozone debt crisis, and the expected levels of productivity and demand coming from China.
Nonetheless, a strong consensus did emerge from North American and European experts during our sidebar conversations in Moscow.
The overwhelming view was that oil prices will be moving higher next year, although the continuing volatility will guarantee that this is hardly going to be a straight line advance.
Even still, there will be a number of factors that will push Brent and WTI prices as much as 20% higher next year-particularly in the first quarter.
Here's why oil will still remain a "must-have" investment next year.
To continue reading, please click here...
How the Biggest Investors Are Playing the "New World Order" in Oil and Gas
Thanks to the fracking boom of the last few years North America is now on a path toward energy self-sufficiency.
In fact, the International Energy Agency (IEA) now believes that, thanks to astonishing growth in oil and natural gas output, the U.S. could even become a net exporter of natural gas by 2020, and even net-energy self-sufficient by 2035.
According to IEA estimates, the U.S. is already the world's No. 2 natural gas producer.
The IEA has also indicated that increasing production from Canadian oil sands means North America could become a net oil exporter. And by 2035, it's forecast that nearly 90% of Middle Eastern oil exports will find a home in Asia.
These tectonic energy shifts have not gone unnoticed by OPEC and large state-owned energy companies. Major Asian and Middle Eastern interests have already made major acquisitions in Canada and the U.S., with an eye towards many more.
Every day it seems the energy scene is changing at a lightning pace, creating a new world order in energy.
So to gain further insight into this rapidly changing climate, I recently sat down with energy consultant Peter Barker-Homek, a true energy insider.
Peter is the founder of Eta Draco, an advisory firm focused on building operations and capital structures to provide for enduring growth and to anticipate cyclical downturns for small- to medium-sized enterprises.
Mr. Barker-Homek knows more than a thing or two about the global energy sector.
As the previous CEO at TAQA, the Abu Dhabi national energy company, and a seasoned energy executive in a Fortune 20 company, Peter has completed $40 billion in energy-related transactions.
He has more than 20 years' experience in major markets worldwide, and even served in the U.S. Department of State and the U.S. Marine Corps as an Officer/Pilot. He has appeared on CNN, BNN, CNBC, Sky News, Bloomberg TV, BBC Radio, Al Jazeera, and CrossFire, and is regularly cited in industry journals and periodicals.
I think you'll enjoy what Peter had to say during our recent Q&A.
If I did my job right, some of it may even shock you.
To continue reading, please click here...