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The Oil Crash Looks A Lot Like 8 Other Classic Bubbles That Burst

The Oil Crash Looks A Lot Like 8 Other Classic Bubbles That Burst thumbnail

Oil might have been in a bubble that’s now popping. Gluskin Sheff Chief Economist and Strategist David Rosenberg observed in his Friday morning research note that: “Well, with perfect hindsight, oil was in a classic bubble: parabolic price moves, tremendous excitement, widespread participation by the investing public, a ton of leverage.” Rosenberg noted that, when […]

Mounting debt for energy firms as oil prices plummet

Mounting debt for energy firms as oil prices plummet thumbnail

Energy firms have been financing new oil production by taking on large amounts of debt. When oil prices averaged over $100, that strategy made sense. But with oil at $50, most indebted firms are suddenly in crisis. In recent years oil exploration companies have taken on more debt in order to finance their operations. The […]

Deep Debt Keeps Oil Firms Pumping


Producers Have Increased Their Borrowings by 55% Since 2010 American oil and gas companies have gone heavily into debt during the energy boom, increasing their borrowings by 55% since 2010, to almost $200 billion. Their need to service that debt helps explain why U.S. producers plan to continue pumping oil even as crude trades for […]

Are low oil prices good or bad for oil traders?


Are low oil prices good or bad for oil traders? In theory oil traders should not care about the price of oil; as they have reminded us many times recently, the big trading companies trade differentials and spreads, not flat (outright) price. In a trader’s ideal world oil prices would fluctuate in a range, giving […]

This Oil Thing Is The Real Deal

This Oil Thing Is The Real Deal thumbnail

Well! WTI below $50 and Brent below $53 when I start writing this. Who knows where they’ll be by the time I’m finished?! The euro down below $1.20, US stocks flirting with -2%, major European ones off -3%, Italy and Greece over -5%. Welcome to the real world, baby! Didn’t think you’d see it again […]

The Real Cause Of Low Oil Prices: Interview With Arthur Berman


With all the conspiracy theories surrounding OPEC’s November decision not cut production, is it really not just a case of simple economics? The U.S. shale boom has seen huge hype but the numbers speak for themselves and such overflowing optimism may have been unwarranted. When discussing harsh truths in energy, no sector is in greater […]

Tough times for US natural gas


While inventories for US natural gas are low, production is up, causing prices to fall 29 per cent in December alone. Lex’s Oliver Ralph and Alan Livsey discuss.

US shale boom is same as dotcom bubble, says Russian oil executive

US shale boom is same as dotcom bubble, says Russian oil executive thumbnail

The rise of US shale is similar to the dotcom boom of the late Nineties and will cause many companies to fail, one of Russia’s top oil executives has warned. Leonid Fedun, vice-president of Lukoil, Russia’s second-largest oil producer, believes that with the price of Brent crude and WTI at multi-year lows, fracking companies will […]

Hundreds with oil company get layoff notices

Hundreds with oil company get layoff notices thumbnail

The price of oil continues to drop, and that now means mass layoffs for oil workers in Bakersfield. The Employment Development Department showed 700 people to be laid off by Ensign Energy Services, but that bad news came very suddenly for families, even with the threat of low oil prices looming overhead for months. “I’ve […]

The Israeli startup that turns air into water

The Israeli startup that turns air into water thumbnail

Arye Kohavi’s Water-Gen has developed technology to meet a basic and universal need: Making water available everywhere at a reasonable price. A drab building in Rishon Letzion’s industrial zone hides one of Israel’s most surprising and innovative enterprises. The offices of this startup company are stashed away at the back corner of the second floor, […]

Why Low Oil Prices Are Not Sustainable

Why Low Oil Prices Are Not Sustainable thumbnail

Summary There have not been any considerable fundamental changes in the oil market from June to December that justify the big drop in oil prices. OPEC surplus of crude oil production capacity has changed very little between June and December. Now is an excellent opportunity to make a long-term investment in good energy stocks at […]

Saudis hit ‘panic button’ at $40 oil


Saudi Arabia has insisted that OPEC will keep oil production at 30 million barrels per day no matter the cost of crude, but even the world’s biggest oil exporter has a limit, the CEO of Breitling Energy told CNBC on Friday. “I think the panic button is at $40,” Chris Faulkner said in a “Squawk […]

A New Jersey bid to privatize water


If approved by Gov. Christie, bill would give municipalities with aging pipes right to sell systems to private companies A bill that would allow New Jersey municipalities to sell their public water utilities to private, for-profit corporations without putting the measure to voters is awaiting Gov. Chris Christie’s signature. Until now, any municipality in New […]

The diverging paths of gold and oil in 2014

The diverging paths of gold and oil in 2014 thumbnail

Gold is a commodity that in the real world doesn’t get used for a whole lot of truly important things, but is seen as a financial asset, and always has been. Oil is a commodity that in the real world makes modern life possible, gets used for many, many important things, and yet is also seen […]

The fine art of forecasting


It was six months since he joined Business Bugle and Ashutosh was already a seasoned journalist. Summoning him, his editor said, “We’ve got an edition to run, boy. I know there’s no actual business happening. All the company chiefs and market gurus are probably in pubs swigging Single Malts. But ask them how 2015 will […]

Peak oil without US?


Boone Pickens, BP Capital founder, shares his thoughts on what oil production would look like without the United States.

The pricing challenge posed by oil’s decline

The pricing challenge posed by oil’s decline thumbnail

“Trying to forecast oil demand, supply and price in today’s market is like trying to paint the wings of an aeroplane in flight. Even if one succeeds in covering the subject, it’s unlikely to be a tidy job.” Howard Kauffmann, then president of Exxon, was speaking in 1982, as the price of crude declined from […]

North Sea oil industry close to collapse

North Sea oil industry close to collapse thumbnail

The UK’s oil industry is in “crisis” as prices drop, a senior industry leader has told the BBC. Oil companies and service providers are cutting staff and investment to save money. Robin Allan, chairman of the independent explorers’ association Brindex, told the BBC that the industry was “close to collapse”. Almost no new projects in […]

A Continent of New Consumers

A Continent of New Consumers thumbnail

Africa has the foundation for an exceptionally long runway for consumer spending. Morningstar’s long-term approach to analyzing companies requires careful analysis of Africa, which we expect to become an increasingly fertile region for consumer spending over the next several decades. Several tailwinds drive these expectations: favorable demographic trends, including a large, young, and rapidly growing […]

We Can’t Predict the Future of Oil and Gas Prices


In 2003, The Mirage, one of the premiere casino hotels in Vegas, lost an estimated $100 million and 10,000 visitors a week when a hand-raised tiger bit and grievously injured Roy Horn, half of Siegfried & Roy. That bite — which no executive or show producer ever expected — ended the run of one of […]

Why Oil Is Being Hurt by US, and Why Oil Goes Back Up in 2015


Trying to peg the bottom in oil is quite simply a guessing game. Still, with the gyrations and price swings, some investors have to wonder if the worst has been seen. After all, oil has fallen nearly 50% from the peak this summer. On top of many of the frequently covered issues around oil demand, […]

Industry Backed Bill Could Force Mineral Owners to Sell


  As lawmakers return to town this week for their final interim session of 2014, they’ll learn more about a practice in the natural gas industry companies want them to approve through legislation: forced pooling. Kevin Ellis, president of the West Virginia Oil and Natural Gas Association, explained to lawmakers during a November meeting, when […]

The Shocking Data Proving Shale Oil Is Massively Over-hyped


Hooray, Crude Oil is suddenly much cheaper than it used to be. That’s great news, right? Not so fast. For certain it’s not good news for those counting on a continued rise in US oil production from the “shale miracle”. Many drillers were challenged to operate profitably when oil was above $70 per barrel. Very […]

The Aftermath Of The Great 2014 Oil Crash “A Textbook Macroeconomic Shock”

The Aftermath Of The Great 2014 Oil Crash “A Textbook Macroeconomic Shock” thumbnail

Not a day passes without pundits on either side of the debate, eager to make their case that the acute, nearly 50% plunge in the price of crude, swear up and down their preferred economic ideology of choice that said plunge is [bullish|bearish] for the economy. The reality is that the true impact of the […]

The Oil Market Actually Works, And That Hurts

The Oil Market Actually Works, And That Hurts thumbnail

Please allow me to revert back again a little to what I wrote earlier today in Will Oil Kill The Zombies? I think we need to be clear on what’s going on here. The oil market actually works. And that’s a rarity in today’s world of manipulated everything, of no mark to market, of huge […]

North Dakota oil production hits a lull


North Dakota’s steep climb in oil production growth is hitting a lull as oil drillers retrench amid plummeting crude oil prices. State officials said Friday that oil production in October declined by about 4,000 barrels per day to 1.18 million daily barrels compared with September, the first decline in eight months. Drilling for new wells […]

Considerable pain to come for US Energy stocks

Considerable pain to come for US Energy stocks thumbnail

Houston, we have a serious problem… With only 20% of US Shale regions remaining economic at these oil price levels, it should not be surprising that the credit risk of the US Energy sector is exploding to near 1000bps… and contagiously infecting the broad HY market… Credit risk in the energy sector is starting to […]

How I Learned To Stop Worrying And Love The Collapse Of The Oil Market


Summary Diversify for safety and control risk. Energy provides positive diversification benefits. Take what the market gives you. The downturn in oil prices has led to much discussion about investment implications, particularly within the Energy sector. As I write, 70% of Seeking Alpha’s Top Articles are focused on the Energy sector. Possibilities discussed range from […]

Could Falling Oil Prices Spark A Financial Crisis?


The oil and gas boom in the United States was made possible by the extensive credit afforded to drillers. Not only has financing come from company shareholders and traditional banks, but hundreds of billions of dollars have also come from junk-bond investors looking for high returns. Junk-bond debt in energy has reached $210 billion, which […]

Shale Liquidations Begin? Sub-$50 Oil Appears In North Dakota


When ISIS dared to steal and sell oil at below market rates, they were dire pirates that needed to be destroyed (and anyone who dared to buy it was pariah). So when, as Bloomberg reports, crude sold at the wellhead in the Bakken shale region in North Dakota fell to $49.69 a barrel on Nov. […]

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