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  • Featured Story

    Why the Rising Tide in Oil Hasn't Been as Good for Offshore Drilling Ventures

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

    The spread between West Texas Intermediate (WTI) and Brent continues to narrow.

    Thanks to additional new U.S. pipeline capacity and the growing volume of oil product exports from American refineries, the glut of excess storage at Cushing, Okla., is shrinking.

    This ongoing glut has been the single biggest reason why WTI trades at a discount to Brent. As I write this, WTI is approaching $104 a barrel and Brent $111.

    With crude oil prices continuing to rise, you would think that would be good news for both onshore and offshore drilling ventures.

    But it's just not so, at least in the short term...

Article Index

Why the Rising Tide in Oil Hasn't Been as Good for Offshore Drilling Ventures

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

The spread between West Texas Intermediate (WTI) and Brent continues to narrow.

Thanks to additional new U.S. pipeline capacity and the growing volume of oil product exports from American refineries, the glut of excess storage at Cushing, Okla., is shrinking.

This ongoing glut has been the single biggest reason why WTI trades at a discount to Brent. As I write this, WTI is approaching $104 a barrel and Brent $111.

With crude oil prices continuing to rise, you would think that would be good news for both onshore and offshore drilling ventures.

But it's just not so, at least in the short term...

Money Morning Mailbag: U.S. Drilling Ban Could Be Permanent for BP

By , Associate Editor, Money Morning -

The U.S. government's deepwater oil drilling ban, which resulted from the BP PLC (NYSE ADR: BP) Gulf oil spill, prompted some readers to question how far U.S. authority reaches regarding offshore business, and what kind of international repercussions could result.

Q: Where do international waters begin for the Gulf of Mexico? I read somewhere if we didn't drill for oil in the Gulf that China was going to do so. When you are talking international business, does U.S. President Barack Obama have the authority to shut it all down?

- John M.

Read More…

Money Morning Mailbag: Relief Wells Near Finish, But Oil Spill Blame Game Continues

By , Associate Editor, Money Morning -

While BP PLC (NYSE ADR: BP) closed in this week on finishing relief wells to permanently plug the oil spill, stormy weather threatened to delay the final steps as clean up crews were called in to shore.

BP capped the blown-out Macondo well last week and has been conducting pressure tests to ensure the cap's strength. A relief well is close to completion but work has been halted until the storm passes. All work could be stopped for 10 - 14 days if the area is evacuated.

While the leak may finally be close to plugged, the financial aftermath is far from over. Corporate entities and the U.S. government continue to point fingers at each other.

Read More…

The BP Relief Wells … And the Two Nightmare Scenarios to Fear

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

Although the global energy sector is entering its most-promising stretch in decades - with more new technologies and more investment opportunities than ever before - I just can't seem to get away from BP PLC (NYSE ADR: BP) and its problems.

Take last Thursday, for instance. I began the day at FOX Business News, where the interviewer wanted me to explain what will happen if the BP relief wells fail. Then I spent an hour as the guest on a radio talk show from Johannesburg, South Africa, detailing what options are available to BP. Later still, I served as a consultant to a Wall Street investment crew - via conference call - once again on the status of the BP relief wells.

The BP relief wells are right now the dominant topic on everyone's mind. But there are two potential scenarios - of "nightmare proportions" - that investors need to know about.

Let me explain...

To understand the possible nightmares that BP faces in the months to come, please read on...

Louisiana Judge Blocks Offshore Drilling Ban

By , Associate Editor, Money Morning -

A federal judge in Louisiana today (Tuesday) blocked a White House moratorium on offshore drilling in the Gulf of Mexico, MarketWatch reported. The White House said it would appeal the decision immediately, according to reports.

Louisiana Gov. Bobby Jindal and state Attorney General Buddy Caldwell filed papers Sunday in a New Orleans federal court petitioning for the six-month deepwater oil drilling ban be lifted in 30 days. The papers said that lifting the ban would avoid "turning an environmental disaster into an economic catastrophe."

"Even after the catastrophic events of Sept. 11, the government only shut down the airlines for three days," Caldwell said.

Read More…

Louisiana Supports Companies' Fight Against Oil Drilling Ban to Save Local Economy

By , Associate Editor, Money Morning -

The Louisiana government has asked a U.S. judge to lift a six-month deepwater oil drilling ban to prevent the demolishment of local livelihood and the collapse of the oil industry.

Louisiana Gov. Bobby Jindal and state Attorney General Buddy Caldwell filed papers Sunday in a New Orleans federal court petitioning for the moratorium to be lifted in 30 days. The papers noted that lifting the ban would avoid "turning an environmental disaster into an economic catastrophe."

"Even after the catastrophic events of Sept. 11, the government only shut down the airlines for three days," Caldwell said.

The U.S. government requested to delay a hearing until July, but U.S. District Judge Martin Feldman ordered regulators and offshore companies to appear in court yesterday (Monday).

"The issues presented are of national significance and to delay resolution would be irresponsible," Feldman wrote on the order denying the government's request.

Feldman heard opening statements Monday and promised to rule on the ban by noon on Wednesday - though he could rule as early as today (Tuesday).

"The court has to decide if there is a rational basis for the choice the government has made," Judge Martin Feldman said during the case's opening statements.

Read More…

China's CNOOC Will Ramp Up Deepwater Oil Drilling as BP's Oil Spill Kills U.S. Exploration

By , Associate Editor, Money Morning -

China's CNOOC. Ltd. (NYSE ADR: CEO) will step up its long-term deepwater oil exploration plans with a close eye on safety measures in the wake of the BP PLC (NYSE ADR: BP) Gulf oil spill that has halted U.S. deepwater drilling. The state-controlled oil company has exclusive rights to develop China's offshore resources and has […]

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Marcellus Explosion-BP Spill: Both Involved This Faulty $7 Piece of Plastic

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

Sometimes the very smallest part of a complicated piece of equipment can bring down the entire project. The part at issue here, a thin ring of rubberized plastic, costs about $7. Yet it may be responsible for forcing the U.S. to rethink its entire domestic energy strategy. Here's what happened. Clearfield County is a rural […]

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Oil Industry Leaders Try to Avoid Regulatory Fallout From BP's Gulf Oil Spill

By , Contributing Writer, Money Morning -

The leaders of the three largest U.S. oil companies will testify before Congress today (Tuesday) about the Gulf oil spill's effect on U.S. energy policy, hoping to convince legislators to be cautious about introducing new regulations on the industry.

Chief Executive Officers Rex Tillerson of Exxon Mobile Corp. (NYSE: XOM), John Watson of Chevron Corp. (NYSE: CVX) and James Mulva of ConocoPhillips (NYSE: COP), are scheduled to appear before a House Energy and Commerce Committee panel examining offshore drilling safety and energy policies.

The review comes after a blowout at BP PLC's (NYSE ADR: BP) Deepwater Horizon drilling platform in the Gulf of Mexico caused a massive oil spill.

Read More…

Marcellus Explosion-BP Spill: Both Involved This Faulty $7 Piece of Plastic

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

Sometimes the very smallest part of a complicated piece of equipment can bring down the entire project. The part at issue here, a thin ring of rubberized plastic, costs about $7. Yet it may be responsible for forcing the U.S. to rethink its entire domestic energy strategy. Here's what happened. Clearfield County is a rural […]

Read More…

Free Report: Prepare for Washington's "Heavy Hand," Thanks to BP

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

BP (NYSE: BP) has guaranteed that the drilling environment in the U.S. will undergo significant change. There will be government overreaction, but leaving the production of new crude oil to the whims of company bottom lines is no longer an option. Some of what is coming will require intense ongoing negotiations. That the increasingly heavy […]

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Oil Sector Expert Kent Moors Sees Tough Times, Stricter Regs For BP After Oil Spill

By , Executive Editor, Money Morning • @privatebrief -

Energy expert Dr. Kent Moors is angry. And the main target for that anger is BP PLC (NYSE ADR: BP).

At its core, the Deepwater Horizon explosion and oil spill is a human tragedy: 11 workers were killed, others were injured and now many Gulf Coast residents will end up losing their homes and livelihoods.

But that's not all that has Dr. Moors seeing red: The accident that resulted from BP's incomprehensible risk-taking has killed an energy bill that could have set the U.S. economy on a course for energy freedom, and is going to summon the heavy hand of government in a way that will cost American consumers dearly while also keeping regular U.S. investors from reaping green.

Read More…

Two Energy Stocks For a Post-Oil-Spill World

By , Global Investing Specialist, Money Morning -

With the failure of the BP PLC (NYSE ADR: BP) "top kill" strategy, the Deepwater Horizon oil spill takes on a more serious hue, both for the Gulf of Mexico environment and for BP itself. If it indeed proves impossible to cap the oil flow before August, public anger against BP and against deep-sea drilling in general may put BP out of business and set deep-sea drilling around the United States back for years.

The business fallout from the oil spill could be widespread. As was true of the Three Mile Island nuclear accident of 1979, the Deepwater Horizon oil spill could end up causing massive damage to companies that were in no way involved with the BP tragedy. Risks of different types of operation will be reassessed, new rules will be enacted, and the energy business will change radically.

Smart investors will anticipate these changes.

To discover two stocks poised to thrive in a post-oil-spill world, please read on...

BP's Sharp Stock Drop Prompts Takeover Rumors as Gulf Oil Spill Disaster Spirals Out of Control

By , Associate Editor, Money Morning -

BP PLC's (NYSE ADR: BP) share price has plunged by more than one-third, as the company has struggled to contain the Gulf oil spill. Now, the company is being rumored as a takeover target as its stock has yet to find a floor.

BP shares have tumbled 36% since the company's leased drilling rig Deepwater Horizon exploded on April 20. The company has lost a third of its market value - $75 billion - stirring rumors that there could be acquisition interest. About $17 billion in losses came on Tuesday alone when the stock plunged 15%.

"There is a 10% to 20% chance of BP being taken over," Gudmund Halle Isfeldt, an analyst at DnB NOR ASA, told Bloomberg News. "The only real candidate, in size and with similar operations globally, would be Royal Dutch Shell [PLC (NYSE ADR: RDS.A, RDS.B)]."

BP's drastic market value loss could make it cheap enough to attract buyers, but some analysts say the total cost and implications of the spill are too vague to justify a commitment.

Read More…

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