Sun, Mar. 20, 9:05 AM
- In a note Friday, Michelle Meyer, U.S. economist at BofAML, says it's not likely a wave of oil bankruptcies would lead the U.S. economy into recession:
- ""It is important to note that if defaults rise due to non-macro events – which means without being triggered by a recession – there seems to be somewhat limited feedback into the economy."
- Meyer says high-yield bond defaults could hit 6% this year. Still... "If we assume the companies who default are average size, this would mean that 600K workers are vulnerable. However, many bankruptcies result in restructuring rather than the demise of the company, suggesting a portion of the workforce would likely be retained. For argument’s sake, let’s say half of the workers in companies going through bankruptcy proceedings become unemployed over the course of a year. This would result in 25K job cuts a month. As we have seen in the energy sector, a lot of these layoffs may already be happening so the incremental layoffs would presumably be less than 25K per month. This is clearly just illustrative and assumes that bankruptcies are narrow and do not spread to the broader economy."
- Further, Meyer is not seeing signs that oil-sector fears are leading to a broader tightening in credit markets: "While it is still early, there is little evidence of bank credit tightening thus far. "
- ETFs: USO, OIL, UCO, UWTI, SCO, BNO, DWTI, DBO, DTO, USL, FRAK, IXC, DNO, IPW, OLO, SZO, GNAT, SZC, OLEM, FILL, IOIL, YLCO, EMEY
May 19, 2014, 7:17 PM
- Mexico, Iran and other countries that once played hardball with big oil companies are now rolling out the welcome mat, offering generous deals in the hope they will bring capital to stimulate output.
- But it isn't certain the big oil firms will want to return to all those countries, as the economics of the oil business may be changing to favor different kinds of exploration projects elsewhere in the world, WSJ reports.
- The biggest shake-up is coming in Mexico, where production has been falling steadily while rising electricity demand has forced dependency on imported natural gas and sent prices soaring; Total (TOT), Chesapeake (CHK) and Chevron (CVX) have expressed interest in entering the country.
- Iran is considering big changes to its current stringent oil terms, but some analysts say "it will be a slow process to get Western oil companies back to Iran... Iran's reservoirs are prolific, but they are also complex and in poor shape."
- Also, he Ukraine crisis has reinforced the trend in thinking about geopolitical risk as being a big factor.
- ETFs: XLE, ERX, VDE, OIH, ERY, FCG, XOP, DIG, GASL, DUG, XES, IYE, IEO, IXC, IEZ, GASX, PXE, IPW, PXJ, BARL, PXI, PSCE, FENY, RYE, FXN, GNAT, DDG, IOIL, FILL
May 12, 2014, 4:41 AM
- Saudi Arabia could increase oil production if the tension between Russia and Ukraine causes any market shortages, Saudi Oil Minister Ali al-Naimi said today at an energy conference in Seoul.
- Al-Naimi's comments came after pro-Russia separatists declared victory in a "self-rule" referendum for Donetsk in eastern Ukraine.
- Absent of any crude shortages, al-Naimi doesn't expect OPEC to increase its production cap of 30M barrels a day when it meets next month. "Supply is highly sufficient. Demand is great. And the market is fairly stable. There's no reason for a change," al-Naimi said. He also described $100 a barrel as a fair price "for everybody, consumer, producer and oil companies."
- WTI crude is +0.2% at $100.20 a barrel, while Brent is +0.3% at $107.80.
- ETFs: USO, OIL, UCO, SCO, DTO, DBO, BNO, IXC, CRUD, USL, IPW, BARL, UWTI, DNO, DWTI, SZO, GNAT, OLO, IOIL, OLEM, FILL, TWTI
Oct. 2, 2013, 6:45 PM
- The increase of U.S. energy output in recent years has been widely discussed, but a WSJ analysis of global data shows the U.S. is on track to pass Russia as the world's largest producer of oil and gas this year - if it hasn't already.
- The U.S. last year tapped more natural gas than Russia for the first time since 1982, and it's catching up in pumping crude; Russia produced an average 10.8M bbl/day in H1 2013, 900K/day more than the U.S. but down from a difference of 3M bbl/day a few years ago.
- The amount of crude from the Bakken oil field in North Dakota and the Eagle Ford shale in Texas continues to rise rapidly, while Russian output is expected to remain flat through 2016; that's a big problem for Russia, whose oil exports could fall 25%-30% after 2015, reducing GDP more than $100B. (also)
- ETFs: IEO, IEZ, IYE, PXE, PXI, XES, XLE, XOP, VDE, RYE, FXN, OIH, PXJ, PSCE, ERX, DIG, ERY, DUG, DDG, IXC, IOIL, AXEN, IPW, GNAT, FILL, RSX, ERUS, RBL, RSXJ, RUDR.
Sep. 28, 2013, 8:25 AM
- North America will become "energy independent" by 2020 on the strength of the shale revolution and then become a net energy exporter, consultant Wood Mackenzie says in a new report.
- North America’s energy independence will introduce a new dynamic to coal, oil and gas prices; coal and gas exports will establish a price cap on their respective markets during periods of high demand, and weak oil demand growth will see U.S. tight oil provide a price floor under crude markets.
- The report says energy independence does not imply a North America entirely detached from global markets; the region as a whole will be dependent on others to clear excess production, and the U.S. will need to import oil for the foreseeable future.
- ETFs: IEO, IEZ, IYE, PXE, PXI, XES, XLE, XOP, VDE, RYE, FXN, OIH, PXJ, PSCE, ERX, DIG, ERY, DUG, DDG, IXC, IOIL, AXEN, IPW, GNAT, FILL.
Sep. 9, 2013, 2:23 PM
- Refiners (PXE, RYE, IOIL) are broadly underperforming the rest of the energy sector today after a Simmons downgrade to Neutral from Overweight, expecting continuing challenges to EPS and refining margins in Q3 and into 2014 after a dismal Q2.
- Individual stocks lowered by the firm: Marathon Petroleum (MPC -1.5%), Tesoro (TSO -0.6%), Delek US (DK -1.3%), Alon USA (ALJ -0.5%), CVR Energy (CVI -1.8%), CVR Partners (CVRR -1.2%).
- HollyFrontier (HFC -1.8%) breaks down to fresh multi-week lows after a downgrade from Morgan Stanley.
- Also, Barclays says at its Energy-Power conference that it believes most refiners will miss current consensus expectations by a wide margin, with Valero (VLO +0.7%) the exception (Briefing.com).
Jan. 7, 2012, 8:30 AM
If you still have a hunger for risk and it's aimed at energy, look beyond even cheap-looking Big Oil shares to smaller firms in oil shale (like SM, OAS and COG, or ETFs like PSCE or IOIL) - pricier, but maybe better positioned in newer technologies like horizontal drilling and hydraulic fracturing, and which may be takeover targets for the big boys.| Jan. 7, 2012, 8:30 AM | 7 Comments
Jan. 3, 2012, 7:54 AMDahlman Rose estimates that global oil and exploration could increase 9% to $595B in 2012 after the firm surveyed major oil companies. The firm says the results support a thesis for a long upcycle for the oil services sector. | Jan. 3, 2012, 7:54 AM
Dec. 14, 2011, 5:22 AM
OPEC members agree the group should set a production ceiling of 30M barrels/day, says an unnamed OPEC delegate, but may not allocate individual country quotas because of disagreement over how the oil output should be distributed. OPEC ministers, meeting now, will hold a press conference later this morning. Crude futures -0.44% to $99.70.| Dec. 14, 2011, 5:22 AM
Dec. 14, 2011, 4:04 AMOPEC ministers meet today, and have been edging toward a decision to keep output broadly steady. Iran and Saudi Arabia, whose clash on output levels led to the collapse of the June meeting, both indicated they see demand for next year to be similar to this year's. Oil futures -0.2% to $99.93. | Dec. 14, 2011, 4:04 AM
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