Energy & Commodities

Two Bullish Factors Pushing Oil Prices Higher

Posted by Tom Kool

on Wednesday, 11 December 2019 9:45

Oil prices were up on Tuesday as Washington agreed to delay the scheduled December 15th tariff hike on China. The impact of the OPEC+ production cut agreement on markets has also yet to wear off.

– The volume of natural gas that was vented or flared in the U.S. reached a record high 1.28 billion cubic feet per day (Bcf/d) in 2018.

– North Dakota and Texas alone accounted for 82 percent of all gas flared or vented.

– The pace of flaring surged by even more this year.

– Oil executives have referred to this problem as a “black eye” for the industry.

Market Movers

– Laredo Petroleum (NYSE: LPI) says it has closed a bolt-on acquisition of 4.475 contiguous net acres in Glasscock County, TX, for $65 million. LPI says the acquired acreage is located “in an area of high oil productivity with relevant offset wells indicating first year oil production 37% higher than expectations for legacy Laredo Wolfcamp drilling.”

– Kosmos Energy (NYSE: KOS) fell sharply on Monday, dragged down by the meltdown of Tullow Oil (LON: TLW). Tullow fell by 70 percent on Monday after reporting lower production guidance. Kosmos partners with Tullow in Ghana…CLICK for complete article

The Best Way To Invest In The Energy Sector In 2020

Posted by Alex Kimani

on Tuesday, 10 December 2019 9:27

A record number of energy companies filing for bankruptcy coupled with poor performance by the industry in 2019 has made it incredibly hard to find investments in the energy space that can be considered safe or promising.

The industry’s favorite benchmark, the Energy Select Sector SPDR Fund, which tracks the price and yield performance of companies in the energy sector, has returned just 2.7% compared to the 24.2% produced by the S&P 500 year-to-date, easily one of the biggest laggards in the entire market.

But first, let’s look at some popular energy instruments that have turned quite risky for the average investor.

Snake oil bonds?

Many investors tend to turn to bonds when the stock markets become choppy.

Natural Gas Set To Fall Even Further

Posted by Irina Slav

on Thursday, 5 December 2019 9:37

Slowing gas demand in China is set to pressure international gas prices further, adding to the burden of producers, some of whom already have to deal with excess supply.

Bloomberg quoted a researcher from China’s economic planning authority, who said at a BloombergNEF event in Shanghai that over the next five years, China’s demand for gas will slow down, especially in the liquefied natural gas department. The reasons for the slowdown will be economic: forecasters expect slower GDP growth in the world’s second-largest economy. Not last because of the continued trade war with the United States.

The Power of Siberia launched officially on Monday, with China’s and Russia’s presidents hailing the infrastructure as a cornerstone in bilateral relations. The two have a 30-year contract for gas supplies and these are bound to undermine Chinese LNG demand.

Domestic production will also take a chunk out of that particular gas demand segment as Beijing seeks to reduce its overwhelming reliance on imports. Tariffs on U.S. LNG imports will not help producers either….CLICK for complete article

Tesla’s Largest Competitor Is Hidden In Plain Sight

Posted by Jon LeSage

on Tuesday, 3 December 2019 9:45

The Tesla Cybertruck is getting the enthusiasm CEO Elon Musk had hoped for, bragging that 200,000 pre-orders have already been placed for the futuristic electric pickup launched Thursday night. But he’s yet to respond to Nikola Motors CEO Trevor Milton’s offer to share his company’s even cooler fuel cell pickup design to reach a “broader market.”

Nikola Motors is at the center of a surge in support for hydrogen and fuel cell vehicles that had been missing. Musk for years has dismissed and ridiculed hydrogen fuel cell vehicles, but the truck segment is grabbing hold of it — along with cleantech and green power advocates — who had previously always chosen electric vehicles over fuel cell. Consulting firm Cleantech Group calls it a new path to “decarbonize transportation.”

Nikola, Toyota, and Hyundai are being given credit for opening up the “hydrogen highway” through what they’re bringing out in hydrogen-powered commercial trucks. Daimler Trucks, Kenworth, and truck engine maker Cummins are also entering the race. Fuel cell buses are another segment gaining support….CLICK for complete article

Momentous Change in US Crude Oil Market, with Global Impact

Posted by Wolf Richter

on Monday, 2 December 2019 9:59

US exports of crude oil and petroleum products – this includes gasoline, diesel, jet fuel, naphtha, and many others – exceeded imports in September by 89,000 barrels a day, the EIA reported today, and so the US became a “net exporter” of crude oil and petroleum products for the first time on a monthly basis in the  EIA’s data going back to 1973.

The US has exported petroleum products – gasoline, diesel, heating oil, naphtha, propane, etc. – for a long time. This is the business some refineries are in. They buy crude oil from wherever they can get it, including other countries, and sell refined product to customers in the US and other countries.

For example, California produces some crude oil and gets some crude oil by tanker from Alaska and some by oil train across the Rockies. But there is no oil pipeline across the Rockies. So refineries in California, including in the San Francisco Bay Area, also import some of their crude oil from other countries, refine it, and then sell gasoline, diesel, and other petroleum products to other countries largely in Latin America….CLICK for complete article