Oct. 9, 2014, 3:25 PM
- Crushed by relentless anxiety about oversupply and weakening global demand, Nymex crude oil futures closed down $1.54 at $85.76/bbl, their lowest close since Dec. 2012, while Brent crude fell below $90/bbl for the first time in more than two years.
- Including today's losses, WTI crude is down 6.2% since the start of the month and Brent has surrendered ~5%.
- In the face of surging output, a move in WTI below its 10-year average at $82 is not out of the realm of possibility, Brown Brothers Harriman says, adding that "a break of $73/barrel could send WTI toward $64, which corresponds with the 2010 low."
- Among big oil names so far today: APC -6.3%, LINE -4.6%, EPD -3.8%, DVN -3.8%, MRO -3.6%, HES -3.8%, KMI -3.7%, TOT -3.5%, STO -3.3%, RDS.A -3.1%, OXY -3%, KMP -3%, XOM -2.6%, COP -2.6%, MUR -2.6%, CVX -2.5%, BP -2.4%.
- ETFs: USO, XLE, OIL, UCO, ERX, VDE, OIH, SCO, ERY, XOP, DIG, BNO, DTO, DBO, DUG, IYE, XES, IEO, CRUD, IEZ, PXE, USL, UWTI, PXJ, FENY, DNO, DWTI, RYE, FXN, SZO, OLO, DDG, OLEM, TWTI
Oct. 9, 2014, 9:56 AM
- Global oil producers open broadly lower as oil prices continue to slide on concerns about high supplies and weak global economic growth (also): RDS.A -2.7%, STO -2.7%, TOT -2.5%, HES -2%, APC -1.7%, BP -1.6%, CVX -1.5%, COP -1%, XOM -0.8%.
- Brent prices slump to $91/bbl, approaching two-year intraday lows, and Nymex crude tumbles to $86.67/bbl to an 18-month intraday low.
- The EIA said yesterday that U.S. crude supplies rose by a more than expected 5% last week, while gasoline and distillate inventories unexpectedly grew as well.
- Barclays is cutting its oil price forecasts: It now sees U.S. crude averaging $85/bbl in Q4 and $89 in 2015, down from previous estimates of $98 in Q4 and $100 next year, and Brent crude averaging $93/bbl in Q4 and $96 in 2015, down from a respective $106 and $107 previously.
- ETFs: USO, XLE, OIL, UCO, ERX, VDE, OIH, SCO, ERY, XOP, DIG, BNO, DTO, DBO, DUG, IYE, IEO, CRUD, PXE, USL, UWTI, PXJ, FENY, DNO, DWTI, RYE, FXN, SZO, OLO, DDG, OLEM, TWTI
Sep. 19, 2014, 2:13 PM
Sep. 16, 2014, 7:27 PM
- A new study finds that it's not the actual process of fracking that can cause water pollution; the bigger problem is faulty well construction.
- The real concern, according to an analysis published yesterday by the peer-reviewed Proceedings of the National Academy of Sciences, are leaks in the steel-and-cement casings surrounding the well bore, which let gas escape before it gets to the surface, making water undrinkable and in some cases explosive.
- "Where contamination occurs, it related strictly to well integrity," says a co-author of the study, who adds, "The answer is not to stop drilling. The fix is better executions on the construction of the well and improving well integrity."
- The study is fueling calls for stricter standards for well construction that could increase costs for energy companies.
- ETFs: XLE, ERX, VDE, OIH, ERY, FCG, XOP, DIG, GASL, DUG, IYE, XES, IEO, IEZ, GASX, PXE, PXJ, DBE, FENY, RJN, RYE, FXN, JJE, DDG, ONG, RGRE, UBN
Sep. 11, 2014, 6:54 PM
- The International Energy Agency lowers its forecast for global oil demand growth for the third month in a row, calling the recent slowdown in demand "nothing short of remarkable."
- The IEA now foresees global oil demand growth of 900K bbl/day in 2014, a decrease of 65K bbl/day vs. last month's forecast and down by 300K bbl/day since July.
- Oil demand growth in Q2 was at its lowest in two and a half years due to economic weakness in Europe and China, a trend the IEA expects will continue to hurt demand; the agency now expects oil demand to rise by 1.2M bbl/day next year, but that's 100K bbl/day less than it forecast last month.
- Saudi Arabia finally appears to be responding to the lower demand outlook, as it cut its oil output by 330K bbl/day last month and appears to have run below 7M bbl/day for the last four months, its lowest level since Sept. 2011.
- ETFs: USO, XLE, OIL, UCO, ERX, VDE, OIH, SCO, ERY, XOP, DIG, BNO, DTO, DBO, DUG, IYE, XES, IEO, CRUD, IEZ, PXE, USL, PXJ, FENY, UWTI, DWTI, DNO, RYE, FXN, SZO, OLO, DDG, OLEM, TWTI
Sep. 10, 2014, 3:28 PM
- Energy stocks, especially refiners, are taking a beating following the latest EIA inventory report that said gasoline stockpiles rose by 2.4M barrels last week, helping send U.S. crude oil futures to 16-month lows (-1.2% to $91.61/bbl) and Brent crude to 17-month lows (-1.1% to $98.02).
- The report is bearish given the large increases in refined product inventories; "even though the crude drawdown was close to expectations, it seemed to disappoint," Again Capital's John Kilduff says.
- The EIA report followed the agency’s updated demand growth report issued yesterday and this morning’s release of OPEC’s report on the oil market; both see lower demand growth this year and next.
- Oil majors are mostly lower: XOM -0.6%, CVX -1.4%, COP -0.3%, but BP (+2.9%) and RDS.A (+1%) are higher.
- Refiners are hit hard: VLO -3.6%, PSX -1.5%, MPC -1.9%, HFC -2.5%, TSO -2.9%, WNR -4.1%, CVI -1.6%, ALJ -1.8%, PBF -3.5%, DK -1.8%, CLMT -1.8%.
- ETFs: USO, XLE, OIL, UCO, ERX, VDE, OIH, SCO, ERY, XOP, DIG, BNO, UGA, DTO, DBO, DUG, IYE, IEO, CRUD, PXE, USL, PXI, PXJ, DBE, FENY, UWTI, DWTI, DNO, RJN, RYE, FXN, SZO, OLO, JJE, DDG, ONG, RGRE, OLEM, TWTI, UBN
Sep. 2, 2014, 3:25 PM
- The energy sector (XLE -1.3%) is lit up bright red this session as WTI crude oil for October delivery dives 3% to $93.04 per barrel, within a dollar or so of 2014's low price. Also headed south is natural gas, -4.1% to $3.89 per MBtu.
- USO -3%, UNG -4.5%
- The Dow (DIA -0.2%) is the weakest of the major averages, with Dow components Chevron (CVX -1.5%) and Exxon (XOM -1.1%) among the index's worst performers.
- ETFs: XLE, ERX, VDE, OIH, ERY, FCG, XOP, DIG, GASL, DUG, IYE, IEO, GASX, PXE, PXJ, FENY, RYE, FXN, DDG
Aug. 30, 2014, 6:48 PM
- "Most of the reason that banks are underearning relative to their historical norms ... is economic and not regulatory," says Richard Pzena (NYSE:PZN), who remains bullish on the TBTFs. Low interest rates, weak trading, and "government persecution" are the three factors, and - should these normalize - earnings could nearly double at Bank of America (NYSE:BAC) and Citigroup (NYSE:C), though JPMorgan's (NYSE:JPM) boost would be more modest. Goldman Sachs (NYSE:GS) is another favorite.
- Broad financial ETFs: XLF, FAS, FAZ, UYG, VFH, IYF, SEF, IYG, FXO, FNCL, FINU, RWW, RYF, FINZ
- Another cheap sector is energy, says Pzena, and based on relative valuation against the broader market - whether price-to-book or price-to-earnings - the major integrated oil companies are selling near all-time lows.
- What the market is missing, says Pzena, is the nature of oil investment. The old days saw capital spending one year, and boosted volume the next. Projects nowadays are far larger and require several years of spending before returns roll in. "We think those big new projects are going to perform and produce decent returns." HIs favorites: BP, RDS.A, RDS.B, XOM, TOT.
- Broad energy ETFs: XLE, ERX, VDE, OIH, ERY, DIG, DUG, IYE, PXJ, FENY, RYE, FXN, DDG
Aug. 29, 2014, 9:58 AM
- The U.S. government will resume issuing oil and gas leases next year for federal lands in California after a new study found limited environmental impacts from fracking and other enhanced drilling techniques.
- The study conducted by California's Council on Science and Technology concluded the current level of fracking and other well-stimulation techniques did not seem to be poisoning water supplies or increasing earthquake risks in the state.
- The research could prove a springboard for California to increase fracking activity during the coming years.
- ETFs: XLE, ERX, VDE, OIH, ERY, XOP, DIG, DUG, IYE, IEO, PXE, PXJ, FENY, RYE, FXN, DDG
Aug. 26, 2014, 3:49 PM
- Cash earned from operations by 25 leading North American E&P companies is expected in aggregate to exceed their capital spending next year for the first time since 2008, according to a Financial Times analysis.
- Shale companies' finances have improved rapidly as a result of a shift by many away from natural gas towards more lucrative oil production and a pick-up in natural gas prices after they fell to 10-year lows in 2012.
- Analysts’ consensus forecasts now indicate that the leading shale companies’ operating cash flows in 2015 will show an excess of ~$2.4B over their capital spending vs. a shortfall of $32.2B in 2012 and $8.8B last year.
- Case in point: Chesapeake Energy (NYSE:CHK) in 2012 had capital spending almost $12B ahead of its cash flow from operations, but this year and next it is expected to be able to cover its spending almost entirely from its income.
- ETFs: XLE, ERX, VDE, OIH, ERY, FCG, XOP, DIG, GASL, DUG, IYE, IEO, GASX, PXE, PXI, PXJ, FENY, RYE, FXN, DDG
Aug. 7, 2014, 11:58 AM
- Technological improvements will allow energy companies to scrape more crude out of the ground and drive U.S. oil production as high as 14M bbl/day, Pioneer Natural Resources (NYSE:PXD) CEO Scott Sheffield says.
- The industry may not discover any more elephant fields, but operators will continue to find new opportunities in conventional plays, the CEO says, noting the industry is pursuing new techniques for boosting the recovery rate at wells up from the 2%-3% common today.
- Only lower oil prices can stop the upward march in U.S. production, Sheffield adds, warning that a price collapse for domestic West Texas Intermediate crude would cause “a tremendous turndown.”
- ETFs: XLE, ERX, VDE, OIH, ERY, XOP, DIG, DUG, IYE, IEO, PXE, PXJ, FENY, RYE, FXN, DDG
Jul. 19, 2014, 10:10 AM
- The Obama administration yesterday moved closer toward allowing oil and gas drilling off seven Atlantic coast states for the first time in decades, establishing guidelines for seismic testing that would gauge offshore reserves.
- Although geophysical research companies will still have to apply for individual permits to conduct seismic studies in the area, and undergo more environmental scrutiny of their specific plans, the Interior Department's decision opens the door for the activity - and for possible drilling off the U.S. east coast in the 2020s.
- Environmental groups oppose the action, saying tests would pose serious risks to species including sea turtles and some whales, and calling seismic testing “a gateway drug to offshore drilling.”
- ETFs: XLE, ERX, VDE, OIH, ERY, FCG, XOP, DIG, GASL, DUG, XES, IYE, IEO, IEZ, PXE, GASX, PXJ, FENY, RYE, FXN, DDG
Jul. 8, 2014, 12:17 PM
- ETF inflows year-to-date of $73.7B topped $67.9B from the same period one year ago, according to Credit Suisse, with Vanguard being the owner of four of this year's five best-sellers: The FTSE Developed Markets ETF (VEA), the REIT ETF (VNQ), the S&P 500 ETF (VOO), and the FTSE Europe ETF (VGK) each picked up at least $3.3B in inflows. Also in the top five is SSgA's Energy Select SPDR (XLE) with $3.2B.
- This year's overall numbers aren't as relatively impressive when taking gold out of the equation, as $25B exited the SPDR Gold Trust one year ago, while flows this year have been relatively flat.
Jun. 27, 2014, 4:53 PM
- All U.S. crude oil that is processed by a distillation tower - not just condensate - is exempt from the crude export ban, potentially widening the amount of petroleum U.S. producers can send to markets abroad, Reuters reports, citing U.S. government and industry sources.
- By focusing on how the oil is treated rather than what it is, this week's ruling allowing two companies that produce condensate to export the oil if it is processed by a distillation tower appears to open an option for companies that produce traditional crude to get around the export ban by lightly boiling their own oil, the report says.
- The new interpretation of the ruling will add to the speculation over how much of the U.S. shale oil boom might reach overseas markets.
- ETFs: USO, OIL, XLE, UCO, ERX, VDE, OIH, SCO, ERY, DIG, BNO, DTO, DBO, DUG, IYE, CRUD, USL, PXJ, FENY, UWTI, DWTI, DNO, RYE, SZO, FXN, OLO, DDG, OLEM.
- Domestic oil stocks: OAS, NOG, KOG, CLR, WLL, EOX, SM, SFY, PVA, GST, SN, CRK, BBG.
- Global majors: XOM, CVX, BP, RDS.A, RDS.B.
- Refiners: VLO, HFC, MPC, TSO, WNR, ALJ, PSX, PBF, DK, NTI, ALDW, CVI.
Jun. 24, 2014, 11:44 AM
- Former Treasury Secretary Henry Paulson, ex-NYC Mayor Michael Bloomberg and hedge fund billionaire Tom Steyer team up to release a report called Risky Business, that argues U.S. companies should treat climate change as any other business threat.
- The report outlines the economic risks posed by climate change to the U.S., including extreme weather effects like hurricanes and rising sea levels that jeopardize more than $1.4T in coastal real estate; some Midwestern and Southern agricultural areas could see a decline in yields of more than 10% due to increased drought and flooding, according to the study.
- Steyer is known in energy circles for his strong opposition to the Keystone XL pipeline (TRP).
- ETFs: XLE, ERX, VDE, OIH, ERY, DIG, DUG, IYE, PXJ, FENY, RYE, FXN, DDG
Jun. 24, 2014, 9:56 AM
- After eight months on the market, Fidelity's ten sector ETFs have crossed over $1B in AUM, with the MSCI Information Technology ETF (FTEC) and the MSCI Energy Index ETF (FENY) seeing especially strong interest.
- All ten charge annual expenses of just 0.12% - lower than the competition from the likes of Vanguard, BlackRock (BLK), and State Street (STT) - but higher trading volumes from those three's offerings make for lower trading costs.
- Like Vanguard's VDE, the Fidelity offerings hold many more companies than those from BlackRock and State Street. The FENY, for example, has 166 stocks vs. the IYE with 84, and 44 for the XLE.
The Energy Select Sector SPDR® Fund, before expenses, seeks to closely match the returns and characteristics of the Energy Select Sector Index. Our approach is designed to provide portfolios with low portfolio turnover, accurate tracking, and lower costs.
See more details on sponsor's website
See more details on sponsor's website
Sector: Basic Materials
Country: United States