applied know how
Energy stocks jumped after the November US election because investors thought new management in Washington would be their ticket to higher pricing. But lets take a look at things from a more detailed perspective?
On the surface, with President Trump promising to reduce the Oil and Gas industry’s regulatory burden and open more federal land and offshore areas to drilling it was clear things would get better. … Read more
Oil prices continued their rally this week, after an 8% surge on Friday 30 January.
As some traders try to identify the bottom in oil prices, Morgan Stanley warns that “small crude oil rallies can occur, but are likely limited and unsustainable.”
Data from Baker Hughes last week showed that US oil rigs posted a weekly decline that was the most since the drilling company started collecting the data.… Read more
While today’s pricing is low… See my previous post, tomorrow’s Oil pricing will inevitably rise, and there will be accompanying spikes in the pricing.
Why?
The answer is Simple demand-supply economics.
There is no steady equilibrium in Oil production. Oil is a finite commodity and the wells which produce oil, tend to produce less oil each year. While demand tends to increase by a modest 1-1.5% per year (around 1 million barrels a day) , without new sources of oil the production of oil declines by around 6% per year as older wells run dry ( around 5.5 million barrels a day).… Read more
I’ve recently posted about oil – here – where I explored the different pressures on oil price beyond pure supply and demand. As a follow up it remains insightful to consider that oil supply and demand could play only a small role in oil pricing through 2015… But that’s what one Oil commentator recently suggests.
Before explaining more , why am I focusing on oil?… Read more
In our series on the plummeting price of oil, here’s the inside take on how low Oil can go before it’s no longer economic t0 turn on the tap.
The best way to look at when the biggest oil players will start feeling the squeeze from lower prices is the “cash cost.”
“Cash cost is the only true floor,” Morgan Stanley analyst Adam Longson said.… Read more