Via Energy and Gold.com Morgan Stanley is out with some interesting research this morning highlighting the strong positive correlation between copper and oil prices: Aside from the fact that both commodities are greatly affected by global economic growth there is another important factor as to why the oil price can end up having a large… Continue Reading
Via Energy and Gold.com: Crude oil futures have shot up more than $4/barrel this morning after a shock move by the Swiss National Bank (SNB) to remove the Swiss franc peg to the euro: The rally which began on Tuesday now totals 17% and, sadly enough for oil bulls, happens to be the largest percentage rise… Continue Reading
This is the worst time of year for world oil prices to hit a five year low for North American energy producers. That’s because they typically evaluate their reserves at fiscal year-end—and that usually matches the calendar year. That means reserve evaluations are done with the current price “deck” looking forward (often called “strip… Continue Reading
In case you were under a rock, oil just got crushed. It has dropped close to 50% and most of that was in just the last three months. Let’s pause there. Consider if this happened with another resource, say if the gold price suddenly dropped 50% from the current price of $1,200/oz to $600/oz in… Continue Reading
At first sight, the following chart is pretty jaw dropping: WTI Crude Oil (spot) vs. XLE Thus far in the month of December WTI crude oil is down more than 22% while the XLE (SPDR Energy ETF) is up 1%! This tremendous outperformance by the large integrated energy companies that comprise the XLE (Chevron, Exxon… Continue Reading
It’s a bit of a tradition among market commentators to come up with a list of ‘surprises’ for the new year. Some of us like to combine both macro/geopolitical events with market events. I have decided to limit my 6 surprises to market events as that is my area of expertise and the primary focus of… Continue Reading
From the McClellan Report: “….the 2008-09 drop in stock prices saw an echo in the 2013 drop in gold prices, which has now had its further echo in 2014 for crude oil prices. There is a similarity in the way that investors panic out of their holdings in each, and that common physics/psychology shows up… Continue Reading
Given a 50% drop in crude oil prices during the last 6 months you might expect a significant washout in net speculative length (# of long contracts minus number of short contracts of both large & small speculators) in crude oil futures. You would be wrong… The shocking fact is that not only has net speculative… Continue Reading
An excerpt from the latest Howard Marks gem (The Lessons of Oil): “Further, it’s hard for most people to understand the self-correcting aspects of economic events. A decline in the price of gasoline induces people to drive more, increasing the demand for oil. A decline in the price of oil negatively impacts the economics of… Continue Reading
We just completed the worst week for the S&P 500 since May 2012 and there are more warning signs out there across markets than there are Christmas lights on my neighbor’s house. However, every time things have begun to look bleak this equity bull has picked up its horns and trampled over anyone who has dared to… Continue Reading
There is one sector of the equity market that may be a clear beneficiary from the recent large decline in the price of crude oil, oil refiners. Refiners are entering their most bullish time of the year historically (November through March) and refining margins (crack spreads) are widening: Click to enlarge During the past… Continue Reading
After pre-marketing their latest venture, Denham Capital, which is one of the largest resource-focused private equity firms, announced the formation of Auctus Minerals, to focus on acquiring underperforming operations across Australia and applying operating efficiencies to them in order to turn a profit. The venture is being funded with US $130 million (initially) from Denham and will… Continue Reading
Last week West Text Intermediate Crude Oil (WTIC) fell below $80/barrel for the first time in more than two years. While the sell-off has been sharp and powerful there are good indications that the worst is likely over for black gold with the ~$80 price level serving as major support: Click to enlarge On an… Continue Reading
The following commodities must-read comes from Ted Morton in the Calgary Herald last week. Mr. Morton is a senior fellow at the Calgary School of Public Policy. He is also a former Minister of Energy and Finance in the government of Alberta. Here is a link to the original article. Morton: More reasons why Obama should approve… Continue Reading
Troy Eckard, CEO of Eckard Global, Carl Tricoli, co-founder and managing partner of Denham Capital Management, and Wil Vanloh, co-founder and chief executive of Quantum Energy Partners, participate in a panel discussion about deal-making in the energy industry and opportunities for private equity. At the following LINK you can see the panel discussion from the Bloomberg… Continue Reading
