Several pundits attributed yesterday's spike in oil prices to the recognition that the fight against ISIS in Iraq-Syria will be a long one. As usual, the 30-second TV wonders missed the boat.
Of course, the ongoing chaos in the Middle East is certainly a factor. To the extent that oil traders begin to calculate its impact into their risk models, there will be an effect.
The dive in crude oil prices continued Monday as yet another sell-off targeted the energy sector for a particularly big hit.
This too shall pass. But the prospect of a protracted decline in oil prices is beginning to have broader policy implications in dangerous parts of the world, where rising prices have been the norm for most of the last decade.
As this situation develops, it could quickly get downright nasty…
To hear some analysts tell it, geopolitics and the weather are exogenous events when it comes to energy prices. That is, somehow crude oil prices would operate "rationally" if it weren't for either of them.
That type of thinking is costly. When investors disregard the weather, the geopolitical, or both, they lose money.
So as we begin the fourth quarter, I’m going to handicap where oil prices are headed next…
The price of oil has climbed slightly this week with West Texas Intermediate (WTI) hitting an intra-week high of $95.17 for October delivery today (Friday).
Despite this week's price hike, WTI prices are still well below the three-year high of $105 a barrel they hit in June.
Oil prices today are approaching $107 a barrel as offenses by Islamic militants in Iraq are causing concerns that Iraq's oil supplies and exports could be slowed of entirely cut off.
The crisis has consumers worrying how high the price of oil will go and how U.S. policies will be impacted.
Money Morning's Global Energy Strategist Dr. Kent Moors appeared on FOX Business' "Countdown to the Closing Bell" yesterday (Thursday) and discussed the potential collapse of Iraq and how that could impact the price of oil and U.S. consumers.
See his take here:
Crude oil prices spiked $2.13 to $106.53 Thursday morning, putting the commodity at levels not seen since September 2013.
Brent crude, meanwhile, rose as much as 2.2% to $112.34
Here's the major news moving these prices higher today – and for continuing weeks...
Let's face it: Iran isn't at the top of anyone's list when considering all the profit opportunities out there in the world. At least, not yet...
You see, Iran is changing - and quickly.
Its new political regime at least appears to be increasingly open to the West.
Its old-style buyback contracts with international oil companies have long been considered high-risk with little or no flexibility; they essentially allowed Iran to own the oil company assets and allow the company a stream of profit.
But the isolated nation recently announced the introduction of a new generation of oil contract, one that promises to be considerably friendlier to foreign partners.
In December 2013, I let our readers in on a way to invest directly in a new oil and gas drilling venture.
In the time since, I've been spending a great deal of time at the drilling site in South Texas, keeping an eye on the progress.
Over the past week, oil and gas stocks have been quite volatile. But that's not bad news - not by a long shot.
In fact, this is always the time when energy investors should be on the hunt for bargains.
And there's one approach that works especially well in this situation...
The oil price spread between West Texas Intermediate and Brent is tightening again.
As of this morning, this spread stood at 7.2% of the WTI rate (the more accurate way to register its impact in the U.S. market).
And as this oil price spread continues to narrow, it promises to create some direct consequences for energy investors.
Here's what's behind it, and what investors need to know moving forward...
The price of gasoline in the U.S. is on the rise again.
Futures prices for RBOB ("Reformulated Blendstock for Oxygenate Blending"), the NYMEX futures contract for gasoline, are up over 11% for the year, and a full 6.6% of that increase has come in the past month.
In fact, gas is up 2.4% over the past week alone. Today, the average retail price is 4 cents higher per gallon than a year ago.
And you can bet that as we move into the "official" start of the summer driving season, the worst is yet to come. Prices will be headed even higher.
So with all the hoopla surrounding our newfound oil wealth and our legitimate move to become energy self-sufficient in as little as a decade, why are gas prices still climbing?
Since the early 1970s, most major oil deals have been transacted in "petrodollars."
But that system has become increasingly challenged in recent years.
The conflict in Ukraine right now has only served to exacerbate things.
As America leads the charge to impose Western sanctions on Russia, it's a plan that's not only backfiring, but leading to opportunities for those who understand the consequences...
The Eagle Ford shale formation in Southern Texas is experiencing an unprecedented oil boom. With a daily output of more than 1.36 million barrels, it's the largest oil formation in the U.S.
It's helping make the U.S. the world's top oil producer and making oil companies even richer in the process.
Marina and I returned home from Houston late Wednesday night. After trips to London and Mexico City, we were tired to say the least... but also very excited.
That's because our latest trip allowed us to spend several days visiting the initial drilling sites for Money Map Project #1 in South and East Texas.
To continue reading, please click here...
Chevron (NYSE: CVX), the nation's second-largest oil company and the world's fourth-largest energy producer by market value, cut expectations for its 2017 production by 6.1% at its annual security analyst meeting today (Tuesday), citing a drop in LNG prices and an increase in oil prices.
Over the last several months, the petrochemical company, along with industry competitors, has been shelling out huge amounts of cash to raise natural gas and oil production.
To continue reading, please click here...
