Continue reading Consider Schlumberger, because oil isn't going out of style

Consider Schlumberger, because oil isn't going out of style originally appeared on BloggingStocks on Wed, 18 Nov 2009 18:00:00 EST. Please see our terms for use of feeds.

Continue reading Murphy Oil is meeting production estimates

Murphy Oil is meeting production estimates originally appeared on BloggingStocks on Wed, 26 Aug 2009 15:45:00 EST. Please see our terms for use of feeds.

Continue reading Oil prices fall on economic concerns

Oil prices fall on economic concerns originally appeared on BloggingStocks on Mon, 22 Jun 2009 18:00:00 EST. Please see our terms for use of feeds.

Why is there conflicting information coming out of the oil patch? One minute we hear that there's an oversupply of oil sitting in supertankers offshore. Now Saudi oil minister Ali Naimi says that higher consumption in China is driving up prices. He further states that the world economy has recovered enough to sustain $75 to $80 per barrel oil. Is some of this just hype ahead of tomorrow's OPEC meeting?

We should keep in mind, however, that markets do not always move on fundamentals. Very often "perception" plays a bigger role. Prices have recovered from $32.70 in February to $63 per barrel recently. Much of this increase, even Mr. Naimi concedes, is due to speculation.

Continue reading Ahead of OPEC meeting, Saudi minister sees oil prices rising

Ahead of OPEC meeting, Saudi minister sees oil prices rising originally appeared on BloggingStocks on Wed, 27 May 2009 12:40:00 EST. Please see our terms for use of feeds.

Continue reading Oil rises despite OPEC decision

Oil rises despite OPEC decision originally appeared on BloggingStocks on Mon, 16 Mar 2009 16:30:00 EST. Please see our terms for use of feeds.

Here are several reasons why we may see things stay as they are. First and foremost is that OPEC members "talk the talk" but they all do not "walk the walk." For example, Saudi Arabia has cut production by 16% since September but Iran cut its production only 4.3% and Venezuela cut its production by 8.3%. So as usual OPEC has difficulty holding each of its members to an agreed upon reduction.

Continue reading Has the oil price slide ended?

Has the oil price slide ended? originally appeared on BloggingStocks on Tue, 10 Mar 2009 15:40:00 EST. Please see our terms for use of feeds.

"Long term, supply remains the key issue to watch in the crude oil market; depressed prices continue to force producers to scale back on exploration and development spending," says energy expert Elliott Gue.

In The Energy Strategist, he says, "I watch oil service giant Schlumberger (NYSE: SLB) as a gauge of overall health in energy markets; it has its hands in just about every imaginable oil- or gas-producing market on the planet."

"Schlumberger's fourth quarter earnings release and conference call were far and away the most bearish from the company in at least five years.

"CEO Andrew Gould was notably downbeat, particularly during the analysts' question and answer (Q&A) session. Predictably, earnings estimates have plummeted since that call.

Continue reading Schlumberger: 'Best of breed' in oil services

Schlumberger: 'Best of breed' in oil services originally appeared on BloggingStocks on Mon, 16 Feb 2009 16:00:00 EST. Please see our terms for use of feeds.

There are two competing forces at work in the oil market. On the one hand, OPEC has already cut production by 4.2 million barrels per day since last September. OPEC's secretary has said the producer group was willing to make further cuts when it meets in March. The price of crude has been holding steady near (above or below) the $40.00 per barrel mark.

Another factor weighing on the market is the threat of some 30,000 U.S. refinery workers who may go on strike. This can bring our refinery capacity to a virtual standstill. In Britain, workers staged an unofficial walkout on Friday in protest over the use of foreign workers.

Continue reading Is oil going up or down?

Is oil going up or down? originally appeared on BloggingStocks on Mon, 02 Feb 2009 11:31:00 EST. Please see our terms for use of feeds.

Continue reading OPEC rumors boost oil prices

OPEC rumors boost oil prices originally appeared on BloggingStocks on Mon, 15 Dec 2008 13:28:00 EST. Please see our terms for use of feeds.

The Saudis announced an oil production cut of 8% to 8.47 million barrels per day and the price Light Sweet Crude rallied sharply early this morning ended up only $1.75. Why is that? Well the U.S. announced that product demand dropped by 6.1%. So while traders were exuberant this morning and drove prices up, by the afternoon, caution has replaced euphoria.

Trading can be an emotional game, often alternating between euphoria and despair in a matter of hours. Traders who bought this morning are now holding a loss. A good trader has taken his/her loss and will come back tomorrow, having erased this day from his/her mind.

Now, here comes the real dilemma. Since the price of Light Sweet Crude did not hold its gains today, does this mean that oil will continue dropping or will the price stabilize at these levels and then move higher? This is a high stakes game that obviously affects our economy. On the one hand, the U.S. wants low oil prices to energize our economy, while on the other side of the world the Saudis want oil to climb back up to $60-75 per barrel. Keep an eye on this one.

Oil: Has it reached a bottom? originally appeared on BloggingStocks on Wed, 10 Dec 2008 18:00:00 EST. Please see our terms for use of feeds.

Continue reading A seesaw day for oil

A seesaw day for oil originally appeared on BloggingStocks on Tue, 14 Oct 2008 14:15:00 EST. Please see our terms for use of feeds.

Upset about paying $3.80 a gallon for gasoline? Hank Paulson, former Goldman Sachs Group (NYSE: GS) CEO, argued that it was all supply and demand so quit your bellyaching. I thought speculation was playing a big part -- traders who bought oil and sold the dollar to drive up the price. Indeed, a few months agao I found a source who thinks 60% of the volume was from speculators.

Seems even that was too low an estimate. The Washington Post reported Wednesday that the Commodities Futures Trading Commission (CFTC) has analyzed the books of oil traders and calculated that 81% of oil trading volume was conducted by speculators.

Guess who broke open the opportunity for oil speculators to trade oil in a loosely regulated fashion? Goldman. The Post reports that In 1991, its J. Aron unit argued that "it should be granted the same exemption given to commercial traders because its business of buying commodities on behalf of investors was similar to the middlemen who broker commodity transactions for commercial firms."

Continue reading Speculation accounts for 81% of oil trading volume

Speculation accounts for 81% of oil trading volume originally appeared on BloggingStocks on Thu, 21 Aug 2008 08:50:00 EST. Please see our terms for use of feeds.

Exxon Mobil Corp.

Continue reading Exxon Mobil's big miss (XOM)

Exxon Mobil's big miss (XOM) originally appeared on BloggingStocks on Thu, 31 Jul 2008 09:09:00 EST. Please see our terms for use of feeds.

We had the internet bubble and the real estate bubble and now, there is the ethanol bubble. Recently, I ran some numbers on ethanol and to my amazement realized that it is - too use a catch phrase from the environmental world -- not sustainable. Turning food into fuel is just plain silly; and when oil prices come down the ethanol bubble could pop big.

I ran did a little research and found some numbers:

• 47% of the Mexician' diet is corn
• it takes 2.4 pounds of corn a day to feed a hungry person
• it takes 22 pounds of corn to make one gallon of ethanol
• there are 42 gallons of refined gas in one barrel of oil

Continue reading World food shortage and the ethanol bubble

World food shortage and the ethanol bubble originally appeared on BloggingStocks on Mon, 07 Jul 2008 13:27:00 EST. Please see our terms for use of feeds.

Continue reading Oil prices retreat a bit after hitting new highs

Oil prices retreat a bit after hitting new highs originally appeared on BloggingStocks on Wed, 14 May 2008 09:00:00 EST. Please see our terms for use of feeds.

As if there were not plenty to worry about, Goldman Sachs (NYSE:GS) is forecasting oil prices to hit $150 to $200 in the next six months to two years. According to Bloomberg, a note from one the of the bank's analysts said:``The possibility of $150-$200 per barrel seems increasingly likely over the next six-24 months, though predicting the ultimate peak in oil prices as well as the remaining duration of the upcycle remains a major uncertainty."'

Observers do not need help from Goldman to make the case. Recent problems with production in Nigeria and political unrest in the Middle East have already moved oil above $120. That situations could continue and move into other unstable countries such as Venezuela.

The theory that a slowdown in the global economy would drop oil prices has not borne out. China, India, and other major developing nations continue to push demand higher. Even in the US where gas prices are now over $3.50, consumers have not cut back use enough to move pricing down.

Some new fields will come online. Brazil just made a major discovery off its Atlantic coast, but production will not be up and running there for several years. During that time, exports from large producers like Mexico and Russia will continue to fall due to aging of their fields.

Nuclear power looks better every day.

Douglas A. McIntyre is an editor at 247wallst.com and the author of the Ten Stocks Under $10 letter.

Goldman makes case of $200 oil originally appeared on BloggingStocks on Tue, 06 May 2008 04:12:00 EST. Please see our terms for use of feeds.

Exxon Mobil Corp.

Continue reading No one will feel sorry for Exxon Mobil

No one will feel sorry for Exxon Mobil originally appeared on BloggingStocks on Thu, 01 May 2008 15:02:00 EST. Please see our terms for use of feeds.

The Saudis will shortly open one of the largest oil fields in the world for production. That would seem to be good news, but it may be the last big deposit of crude left in the country. And, getting it online has cost $15 billion.

According to The Wall Street Journal, "Even in Saudi Arabia, home to more than a quarter of the world's known recoverable reserves, the age of cheap and easily pumped oil is over."

In a period where oil now sells for $117 a barrel, the largest single question is whether global oil production has peaked. There are very few new, large fields being found now. Recently, Brazil said it has discovered one off its coast, but that is in very deep water. Getting to the crude will be expensive, and some of it may be beyond reaching at all.

Part of the rise in oil prices probably has nothing to do with current supply, but it may well anticipate a fall-off in crude production in years to come. Developing nations like China and India are still increasing their consumption. Without large new deposits to develop, there is every reason to expect that oil reserves may start to fall a decade from now.

There is nothing to replace that.

Douglas A. McIntyre is an editor at 247wallst.com.

Will the Saudis run low on oil? originally appeared on BloggingStocks on Tue, 22 Apr 2008 11:00:00 EST. Please see our terms for use of feeds.

Large emerging market countries will use more crude oil than the US for the first time ever. According to Bloomberg, "China, India, Russia and the Middle East for the first time will consume more crude oil than the U.S., burning 20.67 million barrels a day this year."

While OPEC says that higher oil prices are the result of a weak dollar and speculation, that viewpoint is clearly wrong. Demand for oil is moving up and moving up quickly. At the same time there is evidence that supply may drop. Saudi Arabia has indicated that it will soon stop investing in more oil production facilities. The Wall Street Journal says that "After 2009, the kingdom is putting a brake on new projects, because it fears rising output and consumption of biofuels and other non-fossil fuels will erode crude-oil demand."

Anyone who believes the Saudi excuse for cutting investment is a oil production is a fool. By dropping capital expenditures on new facilities, the country can increase the tens of billions of dollars in profits it makes on $116 oil.

The war between consuming nations and producing nations is entering a new and more dangerous phase. Oil needs to rise 30% to hit $150. Based on the price increase over the last year, that number is not beyond the realm of possibility. Nor is the idea that gas prices could top $5 a gallon.

Oil. More consumption and less supply. Ugly results.

Douglas A. McIntyre is an editor at 247wallst.com.

Oil at $150, Saudi and oil demand news originally appeared on BloggingStocks on Mon, 21 Apr 2008 04:19:00 EST. Please see our terms for use of feeds.

Continue reading Oil sets new record as it breaks through $114

Oil sets new record as it breaks through $114 originally appeared on BloggingStocks on Tue, 15 Apr 2008 18:15:00 EST. Please see our terms for use of feeds.