Tue, Aug. 4, 8:05 PM
- The utilities (NYSEARCA:XLU) sector was Wall Street's biggest decliner today as natural gas was the surprise loser from Pres. Obama’s climate plan, with the White House apparently abandoning its previous enthusiasm for gas as a cleaner alternative to coal.
- Gas producers were "confused and disappointed" that the administration eliminated an earlier projection that natural gas would contribute much more electricity, instead increasing the role of renewables; also perplexed were utility companies, who have led a power transformation and spent hundreds of millions of dollars to switch generating plants from coal to shale gas.
- American Electric Power (NYSE:AEP) CEO Nicholas Akins says the U.S. does not have the luxury of being able to ditch nat gas, saying the only way to power big industrial processes is through large-scale, 24-hour generation close to consumers - “solar doesn’t provide that and wind doesn’t provide that."
- The final plan is considered a boon for companies such as SolarCity (NASDAQ:SCTY) and NextEra Energy (NYSE:NEE) that have invested billions in renewable generation, but Sanford Bernstein calls NRG Energy (NYSE:NRG) the biggest potential loser from the plan, saying profits in some scenarios could tumble by half because most of its electricity comes from coal plants that are in EPA’s cross-hairs.
- ETFs: XLE, XLU, VDE, ERX, OIH, KOL, UTG, IDU, VPU, ERY, FCG, DIG, GASL, DUG, BGR, IYE, GUT, BUI, FENY, FIF, PXJ, RYE, FUTY, RYU, UPW, FXN, FXU, DDG, SDP
Mon, Aug. 3, 6:35 PM
- Coal miners and related companies tumbled following today's announcement of the Obama administration's final Clean Power Plan, which aims to shift the U.S. energy mix towards renewable energy such as wind and solar while significantly limiting power plant carbon dioxide emissions.
- Pres. Obama called the plan the “single most important step America has taken in the fight against global climate change," even though U.S. power plant emissions account for just 5% of global carbon emissions.
- The final EPA rule requires a 32% cut in power plant carbon dioxide emissions by 2030 from 2005 levels, an increase from the 30% target proposed last year.
- Industry officials are concerned about the plan’s cost, and Republicans and states hardest hit by the plan say they will fight it; more than a dozen states and the coal industry plan to sue the EPA, and several states say they will refuse to comply.
- ETFs: XLE, XLU, VDE, ERX, OIH, KOL, UTG, IDU, VPU, ERY, DIG, DUG, BGR, IYE, GUT, BUI, FENY, PXJ, FIF, RYE, FUTY, RYU, UPW, FXN, FXU, DDG, PUI, SDP, PSCU, FUGAX
Sun, Aug. 2, 8:41 AM
- President Obama will unveil the final version of his plan to tackle greenhouse gases from coal-fired power plants on Monday, in what he calls the nation's most important step to combat climate change.
- The revised Clean Power Plan will seek to slash carbon emissions from the power sector 32% from 2005 levels in 2030, and will require each state to submit a plan next year that spells out how it will meet the goal assigned to it.
- ETFs: XLE, VDE, ERX, OIH, XOP, ERY, FCG, DIG, GASL, PBW, DUG, BGR, XES, IYE, IEO, IEZ, QCLN, FENY, PXE, PXI, FIF, PXJ, PSCE, NDP, RYE, GRN, FXN, PUW, DDG, HECO, DRIP, GUSH
Sat, Jul. 25, 8:25 AM
- U.S. crude oil has officially entered a bear market, having plunged more than 20% since June 10 to ~$48/bbl, amid a worldwide glut that shows little sign of slowing as U.S. production remains near 40-year highs, output from Saudi Arabia and Iraq surges to record levels, and Iran is poised to resume exports soon.
- But even though the price collapse has erased more than $100B in market cap from U.S. E&P companies, attendees at an energy conference this week in Denver reportedly talked about how they had lowered finding and development costs, sounding as if they were more likely to grow rather than shrink.
- "We have been expecting the current downturn to be as severe as the one in 1986... but not worse than that," Morgan Stanley wrote this week, but with oil rolling over again, the firm believes a worst-case scenario could be in play.
- Stanley says it underestimated OPEC's high production this year - the main reason why the re-balancing of oil markets has not gained momentum - and means the oil crash could turn out to be worse than 1986; if so, it would be the worst in at least 45 years.
- ETFs: USO, OIL, XLE, UCO, UWTI, VDE, ERX, OIH, SCO, XOP, BNO, DBO, DWTI, ERY, DIG, DTO, DUG, BGR, USL, XES, IYE, IEO, IEZ, DNO, FENY, PXE, PXJ, FIF, OLO, SZO, NDP, RYE, FXN, OLEM, DDG
Mon, Jul. 20, 6:27 PM
- Oil prices again drop below $50/bbl after closing pit trade barely above that level, as data showed Saudi Arabian exports fell to the lowest in five months despite record output while a resurgence in U.S. drilling activity seen earlier this month seems to fizzle out.
- While oil consumption has risen this year, many analysts say demand is insufficient to eat away at the global glut of crude and that a drop in output also is needed; the Iranian nuclear deal - the European Union and UN Security Council both voted in favor of the deal - also adds to concerns that more crude oil could be produced in the coming months.
- WTI crude fell more than 3% last week and more than 14% in July, while Brent fell nearly 3% last week and more than 10% for the month.
- The energy sector was easily the day's worst performing equity group: XLE, VDE, ERX, OIH, XOP, ERY, DIG, DUG, BGR, XES, IYE, IEO, IEZ, FENY, PXE, PXJ, FIF, NDP, RYE, FXN, DDG
- Crude oil ETFs: USO, OIL, UCO, UWTI, SCO, BNO, DBO, DWTI, DTO, USL, DNO, OLO, SZO, OLEM
Tue, Jul. 14, 8:12 AM
- Crude oil prices tumble as Iran reaches a nuclear deal with the group of six nations led by the U.S., raising the prospect of a doubling of Iranian oil exports into a world already awash with crude.
- Brent crude -0.8% to $57.40/bbl, while WTI crude futures -1.1% at $51.66/bbl, both well off earlier lows.
- The IEA believes Iran could raise production by 600K-800K bbl/day within months of sanctions being lifted, but there is considerable debate over the impact the lifting of sanctions would have on oil prices.
- The accord "doesn’t mean new Iranian oil overnight," says Energy Aspects analyst Amrita Sen. "The sanctions will take time to be lifted, Iran’s upstream has been neglected for years so the companies will take time before they go back in and they’re able to stabilize production."
- Major global oil producers are modestly lower in premarket trading.
- ETFs: USO, OIL, XLE, UCO, UWTI, VDE, ERX, OIH, SCO, XOP, BNO, DBO, DWTI, ERY, FCG, DIG, GASL, DTO, DUG, BGR, USL, XES, IYE, IEO, IEZ, DNO, FENY, PXE, PXI, PXJ, FIF, OLO, SZO, NDP, RYE, FXN, OLEM, DDG, GUSH, DRIP
Wed, Jul. 1, 5:19 PM
- Saudi Arabia’s move to abandon its role as the balancing force in world oil markets has successfully pressured U.S. shale players and put the brakes on America’s energy boom, Royal Dutch Shell (RDS.A, RDS.B) CEO Ben van Beurden tells Financial Times.
- Many in the industry had come to believe - incorrectly - that price risk had ceased to exist, assuming that OPEC always would adjust the oil volumes it supplied to meet global demand and keep crude prices at more than $100/bbl, van Beurden says.
- The CEO stopped short of predicting a sharp slide in U.S. output, arguing that companies’ efforts to cut costs and improve efficiency meant that production likely would continue "for a while” at roughly current levels, until “the sweet spots start running out."
- But it would be hard to justify substantial new spending on infrastructure and drilling if U.S. crude prices remain at $50-$60/bbl, since extracting “more marginal” barrels would need higher oil prices, van Beurden says.
- ETFs: XLE, VDE, ERX, OIH, XOP, ERY, DIG, DUG, BGR, IYE, IEO, FENY, PXE, FIF, PXJ, NDP, RYE, FXN, DDG
Wed, Jul. 1, 9:55 AM
- The Oklahoma Supreme Court ruled yesterday that a woman injured in a 2011 earthquake can file suit in district court against the two energy companies she accuses of causing the quake.
- The ruling raises the prospect of more lawsuits seeking to hold companies responsible for an increase in seismic activity in the state, as more scientific studies link the tremors to the energy industry.
- ETFs: XLE, VDE, ERX, OIH, XOP, ERY, DIG, DUG, BGR, IYE, IEO, IEZ, FENY, PXE, FIF, PXJ, NDP, RYE, FXN, DDG
Wed, Jun. 24, 6:57 PM
- A spike in earthquakes across Oklahoma is forcing the state's energy regulator to urgently consider tougher restrictions on drilling activity, calling it a "game changer."
- During the June 17-24 period, Oklahoma experienced 35 earthquakes of magnitude 3.0 or greater, according to the Oklahoma Geological Survey, with some of the quakes occurring in the Oklahoma City metro area where there are no high-volume wastewater injection wells.
- The spike in quakes comes two months after drillers were ordered by the Oklahoma Corporation Commission, which regulates the oil and gas industry, to stop disposing wastewater below the state's deepest rock formation.
- Oklahoma's elected officials have been reluctant to shackle an industry that directly generated more than 7% of state revenues last year in the form of production taxes from companies such as Devon Energy (NYSE:DVN), SandRidge Energy (NYSE:SD), Chesapeake Energy (NYSE:CHK) and Continental Resources (NYSE:CLR).
- ETFs: XLE, VDE, ERX, OIH, XOP, ERY, DIG, DUG, BGR, IYE, IEO, FENY, PXE, FIF, PXJ, NDP, RYE, FXN, DDG
Wed, Jun. 24, 1:07 PM
- A U.S. District Court in Wyoming has halted implementation of an Interior Department rule that would set standards for fracking on federal land, issuing a stay that delays compliance for at least a month on the rule that was set to go into effect today.
- Wyoming, North Dakota, Colorado, Utah, the Independent Petroleum Association and the Western Energy Alliance had filed for an injunction.
- The judge said it is necessary to give the federal government more time to explain how it developed the rule and how it considered comments from the public.
- ETFs: XLE, VDE, ERX, OIH, XOP, ERY, DIG, DUG, BGR, IYE, IEO, FENY, PXE, FIF, PXJ, NDP, RYE, FXN, DDG, DRIP, GUSH
Fri, Jun. 5, 11:49 AM
- Analysts say yesterday's release of a landmark EPA study that found fracking had no widespread impact on drinking water makes it less likely that the Obama administration or Congress will strip a 2005 exemption of fracking from drinking water laws and that the EPA will move to tighten rules on disclosure of the chemicals used and limits on the methane emitted.
- "The EPA fracking study does not appear likely to spur additional federal water regulation beyond initiatives that are already in process," ClearView Energy Partners analyst Kevin Book writes.
- That’s seen as good news for companies such as Halliburton (NYSE:HAL) and Schlumberger (NYSE:SLB), the largest oil services companies, as well as producers such as Exxon Mobil (NYSE:XOM) and Chesapeake Energy (NYSE:CHK), as they weather lower oil and natural gas prices.
- The study "is absolutely consistent with all the previous studies that show that effective well containment practices make hydraulic fracturing a very safe practice,” XOM said after the report's release.
- ETFs: XLE, VDE, ERX, OIH, XOP, ERY, FCG, DIG, GASL, DUG, BGR, XES, IYE, IEO, IEZ, FENY, PXE, FIF, PXJ, NDP, RYE, FXN, DDG
Thu, Jun. 4, 6:32 PM
- Chesapeake Energy (NYSE:CHK) hit a 52-week low today amid a double whammy of negative news concerning the natural gas market.
- The U.S. Energy Information Administration said storage levels grew by 132B cf in the week ended May 15 to 2.2T cf, 51% more than a year ago; the weekly surplus is the largest in 12 years and the second largest in EIA records that date back to 1994.
- Many analysts believe the oversupply eventually will push another fall in gas prices; "The market was ready for a large injection, but it's still extremely bearish," one said.
- Also, the Natural Gas Supply Association said in its 15th annual Summer Outlook assessment of the natural gas market that it expects production to set records and inflict downward pressure on prices compared with summer 2014.
- "Even with record-setting demand expected, production is also projected to set summer records," says Bill Green, NGSA chairman and Devon Energy (NYSE:DVN) VP of downstream marketing.
- ETFs: XLE, VDE, ERX, OIH, ERY, FCG, DIG, GASL, DUG, BGR, IYE, FENY, FIF, PXJ, RYE, FXN, DDG
Thu, Jun. 4, 2:57 PM
- The EPA concludes there is no evidence that fracking has had a "widespread, systemic impact on drinking water," according to a five-year analysis of U.S. water pollution risks released today.
- The EPA finds that, while there have been some cases involving spills and leaking wells, the spread of fracking did not cause extensive damage to groundwater resources.
- The study warns of “potential vulnerabilities” to water supplies that need to be addressed, including ensuring wells are well built and wastewater is disposed of properly.
- The report is the U.S. government’s most comprehensive examination of the relationship between fracking and drinking water, and it appears to mostly vindicate the energy industry's position that fracking can be carried out safely and does not need to pose a threat to water.
- ETFs: XLE, VDE, ERX, OIH, XOP, KOL, ERY, FCG, DIG, GASL, DUG, BGR, IYE, IEO, FENY, PXE, FIF, PXJ, NDP, RYE, FXN, DDG
Fri, May 29, 3:04 PM
- Trying to catch the hot trends of the moment, Direxion this week launched the Daily S&P Biotech Bull 3X Shares ETF (NYSEARCA:LABU) and the Daily S&P Biotech Bear 3X Shares ETF (NYSEARCA:LABD). Also open for business are the Daily S&P Oil & Gas Exploration & Production Bear 3X Shares ETF (NYSEARCA:DRIP) and the Daily S&P Oil & Gas Exploration & Production Bull 3X Shares ETF (NYSEARCA:GUSH).
- In another sign of the times, the company plans to shutter its Daily Gold Bull 3X Shares ETF (NYSEARCA:BAR).
- Source: Barron's Chris Dieterich
- Broad energy sector ETFs: XLE, VDE, ERX, OIH, ERY, DIG, DUG, BGR, IYE, FENY, FIF, PXJ, RYE, FXN, DDG
Fri, May 29, 2:48 PM
- WTI crude oil more than erases a week's worth of losses in the space of a few hours, closing the session up $2.61 per barrel, or 4.5% to $60.29.
- As recently as yesterday afternoon, black gold was as low as $56.50 per barrel, and earlier today was still under $58.
- Earlier this week, Ned Davis Research urged caution on oil itself and energy stocks, noting the exit of nearly $500M from the U.S. Oil Fund (USO +3.7%) this month, and $300M from the Energy Select SPDR (XLE -0.1%). At the same time, money has been flowing into bullish dollar ETFs.
- "Investor flows are no longer supportive for energy ETFs. Valuations are not as compelling at this point either. … Seasonality is about to turn ugly for the energy sector. June is historically the worst month for XLE. And finally, while longer-term, the sector remains oversold, shorter-term trend evidence suggests caution for now," says NDR's Tony Welch.
- ETFs: USO, OIL, XLE, UCO, UWTI, VDE, ERX, OIH, SCO, BNO, DBO, DWTI, ERY, DIG, DTO, UGA, DUG, BGR, USL, IYE, DNO, FENY, PXJ, FIF, UHN, OLO, SZO, RYE, FXN, TWTI, OLEM, DDG
Tue, May 26, 2:53 PM
- Energy and natural resources stocks are among today's weakest performers as a sharp increase in the dollar destabilized commodity markets.
- Nymex crude oil futures fell 2.8% to its lowest level in a week at $58.03/bbl, while Comex gold fell 1.4% to a two-week low $1,186.90/oz., as upbeat U.S. data on new home sales and consumer confidence helped lift the dollar.
- Adding to oil price weakness was commentary from Goldman Sachs expecting the global oil market to be oversupplied by 1.9M bbl/day this quarter, saying "the market now depends on how U.S. producers will respond to the recent rally and whether low-cost producers can sustainably deliver higher production."
- ETFs: GDX, USO, NUGT, OIL, XLE, GGN, DUST, UCO, SIL, UWTI, VDE, ERX, OIH, SCO, XOP, BNO, DBO, UGL, DWTI, ERY, GLDX, DGP, DIG, GLL, DTO, UGLD, DZZ, DUG, BGR, USL, XES, IYE, GLDI, SGDM, IEO, BCX, ASA, SLVP, IEZ, DGL, DNO, DGZ, RING, FENY, PXE, DGLD, PXI, HAP, FIF, PXJ, IRV, PSAU, OLO, SZO, NDP, MXI, RYE, GNR, FXN, TGLDX, GUNR, TBAR, GEUR, UBG, GYEN, BAR, TWTI, OLEM, DDG
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