Category

Energy

Oil

The Shocking Role of Iranian Sanctions in Crude Oil's Plunge

By , Global Energy Strategist, Oil & Energy Investor • @KentMoors_OEI - • Print | Email

The collapse in oil prices has now reached historic levels.

Tuesday's 7% plunge in West Texas Intermediate (WTI) – the largest slump in more than 30 years of futures contracts – marked the 12th consecutive daily loss for the New York benchmark. Before rebounding slightly yesterday, crude had been down more than 22% in less than a month.

Now, we've spoken many times before about the numerous reasons why crude prices can plunge: artificial manipulation from short sellers and institutional monkeyshines, geopolitical tensions, distortions in supply and demand, even outright oversupply – we've seen it all before. 

In this present case, some of this current decline is warranted, given the market's overestimation of Iranian sanction impacts and, to a far lesser extent, some weakening in underlying fundamentals.

But to be sure, the leading cause of the plunge has been a combination of what I have called the "lemming fixation" (a penchant for jumping off the cliff en masse) and some outright market manipulation.

I'll have more to say on this shortly, in a more extensive analysis my team and I are preparing right now.

But it's the completely counterintuitive - yet entirely predictable - effect of the recently re-imposed sanctions on the Islamic Republic that I want to explore today...

Energy

Top Climate Change Stocks to Buy

By , Associate Editor, Money Morning • @DavidGZeiler - • Print | Email

Companies dealing with climate change suddenly are much better stocks to buy.

A dire UN report on climate change has put an early deadline on the action needed to avoid a series of very expensive consequences. That will send the world's governments and big businesses running to these renewable energy stocks for solutions.

Now is the time to invest in these winners...

Energy

[CHART] The Largest Investors in Renewable Energy Will Shock You

By , Associate Editor, Money Morning - • Print | Email

Renewable energy firms are quickly becoming some of the hottest takeover targets in the world, and one of the biggest buyers is who you'd least expect…

More importantly, this trend could be hugely profitable for you as this money starts to pour in.

That's why we're revealing our top takeover target in the renewable energy sector.

It's one of the best solar energy companies on the market, and it could more than double your money...

Energy

"King Shale" Will Mint a New Crop of American Oil Millionaires

By , Global Energy Strategist, Oil & Energy Investor • @KentMoors_OEI - • Print | Email

Not that long ago, I'm sure you remember, the Organization of Petroleum Exporting Countries, better known as OPEC, controlled the international price of crude oil.

Given its effective control over more than 40% of all oil produced daily worldwide, how much (or little) the cartel decided to move into the market was the single biggest factor in setting the worldwide price.

In fact, in 1973, in the wake of the Yom Kippur War between Israel and the Arab coalition, OPEC was able to bring the West virtually to its knees, enacting an oil embargo by way of punishing major Western powers for their support of Israel in the conflict.

Of course, in those days, the United States was dependent upon foreign producers for almost 70% of the oil the country needed daily.

It had become both an economic and a national security concern, and "energy independence" was the preoccupation of American presidents going back to Richard Nixon. More than 60% of all domestic production was coming from stripper wells – wells producing fewer than 10 barrels a day each.

But then the combination of hydraulic fracturing and horizontal drilling ushered in a genuine "American energy revolution" in oil production.

The opening of shale (along with the broader tight) oil and natural gas production revolutionized the industry. Over the past decade, something truly unusual developed.

American domestic oil production became the balance for global supply and demand.

From barely 4 million barrels a day in 2008, extractions in the United States have now reached a record 11 million barrels, with some estimates expecting a rise to 12 million by 2020.

That would catapult domestic production into the number one position worldwide.

Then, as part of a budget agreement in mid-December 2015, Congress ended a more than four-decade prohibition on exporting U.S. crude to international markets. Just as the shale revolution was gaining steam, the added volume started moving out to higher-priced foreign markets.

American oil production has become the fulcrum on which international oil trade operates.

King Shale has been crowned. Let me show you what this means...