Tag: oil

Brent Crude at $104 per Barrel on Spreading Mideast Unrest

Filed in commodities, Gold, Lear, New Gold, o, Spot Gold by on February 15, 2011 0 Comments
Brent Crude at $104 per Barrel on Spreading Mideast Unrest

Filed under: China , Middle East , Commodities , Oil When it comes to the biggest threat to world economies, oil scarcity is second only to nuclear war. What started in Tunisia, then spread to Egypt has now spreading to Bahrain and Iran, where protesters are clashing with police. In Iran, lawmakers are threatening death to protesters. The fear of chaos spreading across the Middle East has sent the oil market into overdrive. Brent crude traded at $104 per barrel Tuesday. Continue reading Brent Crude at $104 per Barrel on Spreading Mideast Unrest Brent Crude at $104 per Barrel on Spreading Mideast Unrest originally appeared on BloggingStocks on Tue, 15 Feb 2011 11:00:00 EST. Please see our terms for use of feeds . Permalink | Email this | Comments

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Commodity Prices Soar

Commodity Prices Soar

Filed under: Major Movement , International Markets , Economic Data , Commodities , Oil , Agriculture , Federal Reserve , ETF There are two primary forces at work in world economies. At this time they are driving commodities prices higher. One is the continuing need and demand by emerging nations for raw materials, a trend that is not about to subside. The second is the extra pile of money that the U.S. Federal Reserve is printing that is finding its way into the commodity markets, a driving force for higher prices. Let’s take oil as an example. The International Energy Agency said that that China’s needs could drive oil to $110 per barrel by 2015, a 27% premium to the current price, as reported in the Wall Street Journal . On Tuesday, the U.S. Department of Agriculture (USDA) cut harvest estimates for soybeans and corn. Continue reading Commodity Prices Soar Commodity Prices Soar originally appeared on BloggingStocks on Wed, 10 Nov 2010 12:40:00 EST. Please see our terms for use of feeds . Read | Read | Permalink | Email this | Comments

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How to Profit When Big Oil Bets on Natural Gas

Filed in commodities, Debt, deflation, Gold, natural-gas, US Dollar by on September 20, 2010 0 Comments
How to Profit When Big Oil Bets on Natural Gas

Royal Dutch Shell said that by 2012 it expects more than half of its output will be natural gas — not oil. That is as if Starbucks said it expects to sell more tea than coffee. Yet this is not unusual for Big Oil these days. In fact, most are making big bets on natural gas. Exxon Mobil completed eight projects last year. Seven of them were for natural gas projects — not oil. Of the three scheduled this year, two of them are gas. ConocoPhillips paid $5 billion for Origen, an Australian gas company. Meanwhile, Chevron hammers away at its mammoth liquefied natural gas plant off the coast of Australia, at a total cost of more than $40 billion. (Liquefied natural gas, or LNG, is easier to transport.) Most of the oil giants are also slamming billion-dollar fistfuls to pick up shale gas acreage in places such as the Marcellus in Appalachia. This shift creates new opportunities for investors. But before we get to those, let’s try to understand what’s happening. There are several things at work here. One is that new oil deposits, like pitchers who can hit, are becoming harder to find. They are also costlier. The Kashagan oil field, which was supposed to be a great find in the Caspian Sea, is seven years behind schedule and billions of dollars over budget. Another factor at work is that 90% of the world’s oil reserves are in the hands of national oil companies. They are off-limits for the likes of Exxon and others. By contrast, natural gas deposits are more plentiful. They are also getting cheaper to develop. The cost to build an offshore LNG terminal is about half of what it was only two years ago. The big LNG plants can be just as expensive as anything in the oil world, but — unlike oil — these projects don’t usually go forward unless there are long-term contracts in hand to support them. Some of these contracts go for 20-year terms. This makes the business more appealing to the majors, who don’t have to sweat the huge ups and downs they endure in the oil markets. With contracts in hand, the gas business is just one of putting together an Erector Set. As The Economist notes, “The gas business is really an infrastructure business: drill wells, build gas plants, install pipelines and accrue profits.” But there is more. The world’s use of natural gas is growing faster than its use of oil. The IEA’s guess is that oil consumption grows half a percent a year. Natural gas consumption, by contrast, should rise more than 50% in the next 20 years. Total, the big French oil company, is even more bullish. It estimates that China will use much more natural gas than is commonly assumed. Only a lack of infrastructure keeps China’s appetite for natural gas under wraps. But China is in the process of building that infrastructure today. It is only a matter of time before the nat gas markets feel its impact. Finally, natural gas is cleaner burning. There is a lot of talk of carbon taxes of one kind or another, not only in the U.S., but abroad. I believe it is matter of when, not if, governments punish dirtier fuels. …

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Oil Prices Jump on Pipeline Leak and Falling Supplies

Filed in New Gold, Spot Gold by on September 10, 2010 0 Comments
Oil Prices Jump on Pipeline Leak and Falling Supplies

Filed under: Oil Last week, the oil market was weak. In fact, it was on the verge of breaking long-term support levels. All that changed Friday. The Wall Street Journal reported on two events that drove oil prices higher. The first was a leak in an oil pipeline between Superior, Wisconsin and Griffith, Indiana. The pipeline carries 670,000 barrels a day. The second event was the report by the U.S. Department of Energy report, which showed that crude stockpiles fell 1,853 million barrels for the week ended September 3. Continue reading Oil Prices Jump on Pipeline Leak and Falling Supplies Oil Prices Jump on Pipeline Leak and Falling Supplies originally appeared on BloggingStocks on Fri, 10 Sep 2010 10:40:00 EST. Please see our terms for use of feeds . Read | Permalink | Email this | Comments

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Still Profiting from Deepwater Drilling

Filed in ceo, deflation, Gold, New Gold, Spot Gold, ubs, US Dollar by on September 8, 2010 0 Comments
Still Profiting from Deepwater Drilling

Not long ago, I interviewed Ali Moshiri, President of Chevron Africa and Latin America Exploration and Production Company. We discussed his role at Chevron, where he runs energy exploration and development in the vast Atlantic Basin. We also discussed Mr. Moshiri’s views on what Mexico needs to do to breathe new life into its oil industry. In this portion of the interview, Mr. Moshiri and I discuss what’s going on 6,000 miles south of the U.S., offshore Brazil. There, over the past couple of years, we’ve learned about gigantic oil resources, buried many miles under the deepwater seabed. To date, the most prolific oil-bearing locales offshore Brazil are in the “pre-salt” zones of the Campos and Santos Basins. Looking forward, there are many more basins left to explore along the Brazilian coastline. In short, the future for energy development is bright down in Brazil. Here’s more of my discussion with Mr. Moshiri. BWK: There’s news coming out of Brazil almost every week, from Petrobras and other companies that are working down there. Chevron has a large presence in Brazil. Where do you see things going now that Brazil is coming towards the end of rewriting its offshore oil laws, creating a pre-salt development entity? What do you see happening down there? AM: First of all, the Santos and Campos Basins of Brazil are very attractive. Geologically, (these are) fantastic basins. Petrobras has done a marvelous job of handling this, in the fashion that should be an example for others. BWK: How is Petrobras setting an example? AM: Even as a pioneer in the deepwater, Petrobras invited IOCs (international oil companies) in a very systematic manner, starting around 1996 — and I’ve been involved with that for about 15 years. It’s (a model for) how to get IOCs involved, how to work with them closely, how to expand the relationship. We (at Chevron) have a relationship with Petrobras not just in Brazil, but outside of Brazil, where we are partners in West Africa as well. So from Brazil’s point of view, I think they’re taking the right steps since the late 1990s. BWK: What about the new laws concerning development of the pre-salt oil resources? AM: Regarding the pre-salt itself, and the new terms and conditions that they’ve put forward (i.e., the government of Brazil), there is a change from what it was before. But…

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Corn Prices Soar to a Record High for the Year

Filed in commodities, South African Gold, Spot Gold by on September 6, 2010 0 Comments
Corn Prices Soar to a Record High for the Year

Filed under: International Markets , Commodities , Oil , Agriculture Rumors move markets, especially the commodity markets. The story of the day is a rumor that corn yields will be lower than forecast . The United States Department of Agriculture (USDA) originally forecast corn yields to be 165 bushels per acre. However, with the weather being hotter and drier east of the Mississippi, yields could come in lower, as reported by the Associated Press. That sparked a rally in corn futures with the December contract up 17 cents to $4.64 per bushel (each one cent equals $50). Wheat prices are benefiting from the drought in Russia and Russia’s export ban. December wheat futures shot up 27.5 cents to $7.41 per bushel. Soybeans also were higher by 26 cents to $10.35 per bushel for the November contract. Continue reading Corn Prices Soar to a Record High for the Year Corn Prices Soar to a Record High for the Year originally appeared on BloggingStocks on Mon, 06 Sep 2010 09:00:00 EST. Please see our terms for use of feeds . Permalink | Email this | Comments

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The Case for $10 per Barrel Oil

Filed in commodities, South African Gold by on September 1, 2010 0 Comments
The Case for $10 per Barrel Oil

Filed under: Market Matters , Commodities , Oil Speaking to CNBC, Peter Beutel makes his case for $10 per barrel oil . Here are some his stats to back up his analysis: We have more oil than we’ve had in 27 years, since they began keeping records. Oil inventories are higher than when the price of oil was $20 per barrel. We have 50 million more barrels than we had two years ago, We have 176 million barrels of distillate. Continue reading The Case for $10 per Barrel Oil The Case for $10 per Barrel Oil originally appeared on BloggingStocks on Wed, 01 Sep 2010 16:30:00 EST. Please see our terms for use of feeds . Read | Permalink | Email this | Comments

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Oil Spikes to Over $79.00 per Barrel

Filed in commodities, New Gold, South African Gold, US Dollar by on July 22, 2010 0 Comments
Oil Spikes to Over $79.00 per Barrel

Filed under: International Markets , Industry , Economic Data , Oil September oil futures traded at $79.12 per barrel, up $2.56 (as of 14:40 EDT). Brent crude was up $2.24 per barrel at $77.61. The reasons for the jump were varied. Some cited the possibility of another storm in the Gulf , others cited the fact that oil has been holding above its 200 day moving average. Stocks and commodities trade and then we write about the reasons for the prices changes. One big mover was the US dollar. It took a hit. The September contract traded 82.975, down .798. When the dollar goes down, buying oil gets cheaper. Continue reading Oil Spikes to Over $79.00 per Barrel Oil Spikes to Over $79.00 per Barrel originally appeared on BloggingStocks on Thu, 22 Jul 2010 17:30:00 EST. Please see our terms for use of feeds . Read | Permalink | Email this | Comments

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Taking Advantage of the Oil Refining Slump

Filed in deflation, earnings, Gold, silver, upgrade, US Dollar by on July 14, 2010 0 Comments
Taking Advantage of the Oil Refining Slump

Thomas O’Malley, a 68-year-old investor, has made billions for himself and his backers as an investor in oil refineries — those twinkling jungle gyms of pipes and tanks and columns that turn crude oil into useful products like gasoline. This is O’Malley’s playground. He has probably bought and sold more refineries than any man alive. He knows them like an old chef knows the inside of his kitchen. O’Malley got rich by following a reliable formula. He bought refineries when they were cheap — castoffs, unloved by Big Oil — trading for less than the cost to build them. Later, he sold them for billions. For example, in the aftermath of the 1987 crash, he picked up a 26% stake in Tosco, then a tiny refinery. O’Malley eventually turned Tosco into the largest independent refiner in America. He sold it to Phillips Petroleum (now ConocoPhillips) for $7 billion. Two weeks after he closed that deal in 2002, he took over Premcor, becoming its top executive. He did it all over again, using Premcor as a vehicle to buy refineries on the cheap. Four years later, he sold Premcor to Valero for $6.9 billion. His is the Midas touch in the refinery space. And he’s mostly laid low since 2007. But now he is back again, buying a Delaware refinery he once owned and sold to Valero. The deal is worth $220 million and is the first purchase of a new $2 billion fund created to buy U.S. refineries. O’Malley says he’ll look at any U.S. refinery on the market. In other words, it looks like O’Malley is going for the hat trick — trying to get rich three times in the same game. It’s a contrarian bet, as most people think ill of the refining industry. It’s plagued by costly regulations, weak profit margins and lower demand for motor fuel. But you don’t get to buy stuff below replacement value when times are rosy. As David Foley, an investor with O’Malley put it, “Last time we did it, we made six times our money.” Based on his track record, I would not ignore O’Malley’s play here. Clearly, he thinks the industry has hit bottom. And there are good reasons to think so, as we’ll see. One reason comes from Barry Bannister, an analyst at Stifel Nicolaus. He shows how peaking oil prices on a year-over-year basis are usually a catalyst for better refining margins. …

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How to Make 50% with an Energy Play Rebound

Filed in lead, shares, Spot Gold by on June 28, 2010 0 Comments

You’ve probably heard that old piece of investing advice to “Buy when there’s blood in the streets.” Basically, it means that there’s a geographical area, business sector or line of business that has fallen seriously out of favor. Thus, there are screaming bargains available, if you have the guts to step up and assume the risk. Run, and Don’t Look Back? Still, that “blood in the streets” line is intimidating. There’s blood in the streets because something really bad is happening. People are dumping their shares. They want out. They’re running away and not looking back. Often as not, people make tracks for a darned good reason. There might be a war or revolution in some area. That could lead to seizure or destruction of assets, and massive investment losses. Think of Iran in the late 1970s, or Venezuela more recently. Then there are business sectors that crater, such as we saw with the asbestos business about 20 years ago. The class action lawsuits hit so fast and furious that many old names, like Johns Manville, were belly up before you could blink an eye. Sometimes there are terrible events that just wreck a company’s stock. A few months back, for example, Toyota cracked up. This iconic Japanese firm got hit by a rash of news reports of unsafe vehicles…

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Deepwater Disaster Doesn’t Change Need for Deepwater Drilling

Filed in Guidance, New Gold, silver by on May 21, 2010 0 Comments

Gary Gibson : OK, Byron, can you start off by telling Whiskey readers a little about why we’re searching for deep sea oil in the first place? I mean, we know about peak oil already. But… is it really THAT bad that we’re having to search for oil buried beneath 12,000 feet of water? And after the water, another 10,000 feet of dense rock? That’s a lot of risk to take. Seems to be proof for the end of cheap oil theory, right? Byron King: Exactly. The days of drilling a hole just beneath the soil in Texas, inserting a pipe and watching oil gush out are gone. We’re never going getting back to those days. back. It gets into So that’s what we’re dealing with here in the search for deep sea oil… The energy industry has And they’re having to go deeper and deeper to make things work. Risking more and more capital – and unfortunately, lives – along the way. Look at I mean, the thing is, what we’ve seen in the last, let’s say 20 years or so, since 1990, when the oil industry really started to, you know, go deep. There was something like an “arms race” to develop better and better deepwater technology, to go for the next levels down. Go really deep for the deep-water things. We’ve seen this race to deeper and deeper water. And it’s all because the so called “cheap oil” is gone. It You know what I mean, it used to be that drilling at 1,000 feet water depth was like, whoa, man, that’s like the edge of technology! You know, back then in the early 1990s it was 1,500 feet, then it was 2,500 feet, then it was 5,000 feet…7,500, 10,000. Now they’re drilling at 12,000 feet of water. It’s doable. But it’s mind-blowing as well. I mean, 12,000 feet of water is where the Titanic sits. That’s how deep that water is. Let me stress: 12,000 feet is really deep water. So in 20 years, we’re gone from 1,000 to 12,000 feet: huge, huge technological leap. And the only thing that lets you do that is technology. In the same sense you have a much, much better computer today than you did in 1990, you have much better offshore drilling equipment today than you did in 1990. You have bigger, better rigs. You have more powerful rigs. You have far better positioning, far better station keeping. …

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The Peak Oil Side of Volcanoes

This Icelandic volcano is not just a quaint story about some faraway place. We need to keep an eye on Iceland and its grumpy volcanoes. The historic record is filled with Icelandic volcano blasts that wrecked European civilization. It goes back at least to the days of the Roman Empire. There’s evidence that an Icelandic eruption in A.D. 405 led to a harsh winter the next year, in which the Rhine River froze. This allowed the barbarians cross in numbers sufficient to defeat the Roman Legions. In A.D. 934, there was a massive lava flow from Iceland’s Eldgja fissure system. It unleashed the largest basalt flood in recorded history. An ash cloud blanketed Northern Europe and weakened many political structures. This eruption helped keep the Dark Ages dark, and in particular harmed the English political system. It’s no coincidence that William, Duke of Normandy, conquered England a century or so later, in 1066. Then there was the Laki eruption in 1783, with another immense outpouring of lava in Iceland. This eruption emitted large volumes of poisonous gas, including fluoride and sulfur dioxide chemicals that poisoned half of Iceland’s livestock. The gas cloud blew over Scandinavia as well, causing many deaths and hardships that included a long famine. There were many deaths further south in Western Europe, as well, in 1783. Then came several years of extreme weather. Among other problems was a shortfall in farm output. This led to a drop in tax receipts for governments across the continent. In France, King Louis XVI eventually had to summon the Estates General to ask for new taxes. Instead, he wound up with the French Revolution. Do not discount the immediate or long-term human, economic and social effects of natural phenomena. I hope that the Icelandic volcano goes back to being dormant. But it’s nothing that anyone can control. One way or the other, the Icelandic volcano is important to you as an investor. …

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