Oil

Exxon Deal For XTO Energy May Set Off Wave of Energy Mergers and Acquisitions

In a deal that may set off a wave of mergers and acquisition (M&A) activity in the energy sector, Exxon Mobil Corp. (NYSE: XOM), the biggest U.S. oil company, agreed to buy XTO Energy Inc. (NYSE: XTO), the largest U.S. natural gas producer, in an all-stock deal valued at $31 billion.

Exxon, which hasn't made a major acquisition since it bought Mobil ten years ago, is taking advantage of the low gas prices pressuring smaller, debt-laden gas exploration companies. The economic downturn and discoveries of vast pools of North American natural gas have kept a lid on gas prices, leaving companies in the industry strapped for operating cash.

The deal announced yesterday (Monday) values XTO at $51.69 a share, 25% higher than Friday's closing price. XTO holders will get 0.7098 share of Exxon for each share of XTO. The Texas-based oil giant will also assume $10 billion in debt.

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Why Russia's Oil Fields Will Soon Be Crawling with Westerners

Western oil majors are about to help Moscow solve its energy problem. And that could be a boon for investors.

The traditional Russian oil fields in Western Siberia are well past peak production. Some satellite fields in the region remain, but the extraction gains will be marginal.

My sources in Russia's Ministry of Natural Resources and Ecology (MNRE), the government entity responsible for distribution and oversight of development leases, now acknowledge that the country's overall crude oil production could decline by more than 7% over the next several years.

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Three Reasons Commodities Prices Will Continue to Soar in the New Year

[Editor's Note: This report on commodities is part of our "Outlook 2010" series, which chronicles the global-investing outlook for the new year.]

In a Money Morning column last December, I predicted that "commodities may be due for a recovery in 2009." It's always nice to be right, but I have to say the move in some commodities has surprised me. Just look at the performance figures for the 12-month period that ended in mid-November.

When it comes to commodities, most of 2010 will be a reasonably close repeat of 2009. You may think that sounds dull - until you look at the accompanying chart (see chart below) and realize just how much more there is to go.

Although the rally started at an admittedly low point in January, by mid-November it was very clear that commodities were once again in a major bull market. A few commodities have been left out - coal, natural gas and many foodstuffs have experienced lackluster performance - but many of the others (such as the metals, in particular) have had an exceptional year.

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Investment News Briefs

More AIG Execs Threaten to Quit Over Pay; Bernanke Not Raising Rates Anytime Soon; Gold, Oil Fall After Fed Comments; October Consumer Credit Falls Less Than Expected; SEC Charges Former New Century Execs with Fraud; Cadbury to Respond to Kraft Bid Next Week; BlackRock Plans First Debt Offering in Two Years; Commercial Loan Delinquencies at Record High; RIM's BlackBerry to Get Wider Reach in China

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Was Friday's Trading the First Sign of a Carry Trade Reversal?

Although it's too early to know for sure, Friday's action suggests we could be seeing the earliest stages of a carry trade reversal. Remember that hedge funds and other highly leveraged institutional investors have been borrowing here in the United States at ultra-low interest rates, selling the dollar short, and using the proceeds to snap up stocks, bonds, and gold.

Stocks rocked and rolled on Friday as traders reacted to a better-than-expected jobs report for November. Payrolls dropped just 11,000 and the unemployment rate fell to 10%. The consensus was expecting a payroll drop of 100,000 and the unemployment to remain at 10.2%. Sure, employers still made cuts. But by all indications were on the cusp of a job market turnaround.

An initial early morning blast took small cap stocks up as much as 3% before sellers emerged. The main concern was that a strong economy will force the U.S. Federal Reserve to drop its easy money policy that has it purchasing some $3 billion in mortgage-backed securities (MBS) per day while keeping short-term interest rates pegged near zero. The futures market now pegs the probability of an interest rate increase by August 2010 at 100%.

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Investment News Briefs

AOL to Cut One-Third of Workforce; Geithner Rebuffs Calls for Resignation; Oil Follows Equities' Decline; Leading Indicators Hit Two-Year High; U.S. Making Plans for New Iran Sanctions; DirecTV Won't Rule Out Possible Takeover;

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Trade Gap Unexpectedly Widens on Surge of Oil and Auto Parts Imports

The trade deficit in the U.S. grew by an unexpectedly large 18.2% in September, the most in a decade, reflecting rising demand for imported oil and imports from China.

The gap grew to $36.5 billion, the highest level since January, from a revised $30.8 billion in August, the Commerce Department said today (Friday). Imports jumped the most in 16 years, overcoming a gain in exports.

U.S. exports and imports were at the highest levels since December 2008, in a sign that the U.S. economy is recovering. Imports grew 5.8% in September, the biggest monthly gain since March 1993, while exports rose 2.9%.

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Three Ways to Profit From Rising Oil Prices

An explosion in the world money supply and the rapidly growing auto markets of China and India have fueled an incredible bull run in oil prices. And, it looks like oil still has a long climb ahead. This report will show you three ways to profit from the bull in oil prices.

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A Money Morning Interview: The Future of Energy

Renowned Oil Expert Dr. Kent Moors Details Shortages of Oil, the Impact of Higher Prices, the Promise of New Technologies and the Opportunities For Investors Dr. Kent Moors is one of the world's foremost experts on oil, energy policy, finance, risk management and new technologies. Moors advises the leaders of six oil-producing countries, including the […]

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Oil Prices Hit a 2009 High, but are Unlikely to Spike

Oil prices reached their highest level in a year today (Friday), as the dollar continued to weaken and stocks of gasoline unexpectedly fell. However, most analysts believe crude will avoid a volatile price spike, and either gradually proceed higher or regress in the short term. Light, sweet crude for November delivery hit $78.55 a barrel […]

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Canada: China's Personal Shopping Mall

In 2007, Aluminum Corp. of China Ltd. (NYSE ADR: ACH) – better known as Chinalco – snapped up Peru Copper Corp. A year later, Jiangxi Copper Co. Ltd., teamed up with China Minmetals Corp., to buy out Northern Peru Copper Corp. Don't let the names of the two copper companies fool you – both targets […]

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China Extends String of Oil Acquisitions In Ghana Deal

China is stepping up its efforts to secure access to more of the world's oil by teaming its China National Offshore Oil Corp. (NYSE ADR: CEO) with the Ghana National Petroleum Corp. (GNPC) to bid for a stake in a giant oil find off West Africa. The bid will compete against Exxon Mobil Corp.'s (NYSE: […]

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Gold Prices Soar to Record High on Report of Secret Plan to Dethrone the Dollar

Gold prices surged to record high $1,045 an ounce yesterday (Tuesday), after a report surfaced that global oil producers are planning to stop using the U.S. dollar for oil trade. "There's no telling the veracity of these reports, but the general trend has been going in this direction anyway: a weaker dollar and rising gold," […]

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China Blazing Its Own Trail in Africa

China's trade with Africa has increased ten-fold over the past decade, as the rising Asian power has rapidly matured into a political and economic powerhouse. And with China still in the thralls of an epic growth spurt, its designs on Africa's resources are beginning to conflict with those of the West. Indeed, Africa – with […]

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