Category Archives: Energy

Seems most of the peak oil crowd is unable to recognize how the energy landscape has changed ; they still say the world will be short of energy and hydrocarbons soon. The cornucopian’s forget the planet is finite. Meanwhile, world oil…

In The Outlook for Energy: A View to 2040 . ExxonMobil says to think efficency. Canadian oil production is robust and at all-time highs. Financial Post 2 Trends Making Investors Money in the Canadian Energy Patch by the promotional Keith…

The amazing shift in US fuel consumption trajectory since 2004 is a function of the oil price and has effected both supply and demand: Fuel economy is large piece of the story ( Wards Auto ) A whole lotta information in the Energy Outlook…

Take some chips off the table said Humble Student of the Markets . A bit on Keynesian-ism by Scott Minerd . Meanwhile in the real world, US facing a housing shortage? Sober Look Income investing: The New MLP Landscape: “For years, master…

Lamphier: Direct threat to Canadian economy posed by U.S. shale oil production at the Edmonton Journal . The Bakken profiled at National Geographic . Chevron: The World’s Biggest Gusher at Forbes . Oil Services And Equipment ETFs Pump Out…

Global Investment Returns Yearbook 2013 by Credit Suisse . Why is US Oil Consumption Lower? Better Gasoline Mileage? at TOD . The unsaid answer in the excellent piece is price. Meanwhile, Chinese oil imports are going the opposite…

Conference Presentation: What is Driving Today’s Investors? by Barry Ritholtz . Commodities Prices are Falling. Really. Barron’s (Google the title, the piece has interesting charts). The 15 year CRB and 20 year CRB . “…by 2030, at which…

The stock market’s secular and cyclical position discussed in Barron’s and by Josh Brown . S&P 500 Fair Value Update at Value Plays (Has the shift in income to capital from labor permanent? Or is it a function of the credit bubble?). 2008…

Investors are what they read ( AR ). Thus you subscribe to Independent Stock Analysis . Unfortunately, I haven’t found a whole lot for today. But I’m committed to posting only worthwhile stuff. “…suggests a definitive positive turning…

Welcome to the first full week of stock trading since mid-December. And the S&P 500 stands at a 5 year high. After a poor 2012, “Master Limited Partnerships came roaring back with 7% gains in the first week of the new year, leaving a…

The energy piece of the economic puzzle has morphed over the last several years. From a macro economic perspective, energy does not appear to be a headwind. Energy is providing a sustainable economic competitive advantage in the U.S…

Oil Market Going Through ‘Violent’ Structural Change: IEA at CNBC : “…the shift of oil demand from the West to the East is now rapidly accelerating” and “refining margins have become more volatile.” Iraq, Saudi on OPEC collision course…

Uranium is a difficult place to invest. I have precious little insight But here goes: Following the end of the cold war, uranium was in massive oversupply. The long Russian de-stocking program is set to end next year. Combined with growth…

Oil as an Exhaustible Resource by James Hamilton , which dovetails with the ISA idea worldwide oil production is on an undulating plateau, the shape of which will be determined by price. 9 Charts That Show Why People Have Begun To Whisper…

In NG Calls a reader asked some good questions. My cleaned up response: So you think that natural gas plants will continue to replace old outmoded coal plants? Yes, the coming wave of stateside coal plant retirements is well documented…

Citigroup- Commodities Super-Cycle is Now Over at Trading Journal of an Investment Junkie . ISA is selective in its favorite commodities while expecting emerging markets to continue their advance. I hope to run across the full 120 page…

This weekend the IEA released its World Energy Outlook 2012 , spawning a flurry of news articles. ISA is a shale believer, but much of the mainstream media know not what they speak: Maybe in a robust price environment : “The United States…

Independent Stock Analysis readers know JJ Butler was promoted from piker in the rebound from the telecom bust in 2003. Teck Resources (TCK) was an even better score as a high quality company pigeon holed with outstanding long term assets…

Oil Trades Near One-Week High as U.S. Manufacturing Expands at Bloomberg . America’s booming energy industry has emerged as the no. 1 job-creating sector of the U.S. economy by Mark Perry . The horizontal drilling boom being bullish for…

Oil Rises to Highest in One Week on Stimulus Speculation at Bloomberg . Did you know Gasoline Costs In 2011 Hit Record Average of $2,850 ? ( John Hanger ). No wonder Lessons from the 2011 oil release are discussed ( Financial Post ). U.S…

Oil Advances to 3-Month High Before Europe Debt Meetings at Bloomberg . Demand destruction stunner: “Oil consumption in July 2012 was 18.062 barrels per day–matching July 1995 levels.” John Hanger With 2011 Permian oil production of…

The super-cycle is still soft as BHP warns of job cuts in coal as China cools in Mining Weekly . However, mine curtailments and capex cuts are the fertile ground of bull markets. Peabody Energy says it is continuing to evaluate spending in…

Oil Declines in New York Amid Signs of Higher U.S. Supply at Bloomberg . June oil production in North Dakota was higher by 20k b/d over May and 71% higher year over year (June 2011 was weather depressed) ( Mark Perry ). When the revised…

They may be in bankruptcy protection, but Patriot Coal reports hefty Q2 loss on asset retirement charges, slumping revenues at SNL . “Cox added that international coal prices had fallen significantly since the highs of 2011 when they…

This weekend everyone was excited over the coal stocks. The charts finally turned and started to improve: ACI , CLD and a chart-fest at FINVIZ . Got Coal? When “Less Bad” Starts To Work at Upsidetrader garnered a lot of attention. I was…

Oil Gains Amid Concern Mideast Tensions May Curb Supply at Bloomberg . Seems everyone is calling for volatile oil prices. Do not be so sure. Protecting oil prices from going meaningfully lower are OPEC, the high cost of new supply and…

In spite of the current depressed conditions, coal is here to stay (excellent read by Robert Bryce ). The thesis here at Independent Stock Analysis consists of a booming US thermal market when natural gas production finally declines…

Oil Pares Weekly Gain as China, IEA Signal Slower Growth at Bloomberg . This is the chief reason oil is lower this morning: IEA sees oil demand growth slowing further in 2013 at Reuters . OPEC sees downside risk to 2013 oil demand outlook…

Alpha Natural (ANR) reported results and had their conference call. Let’s just say they’re in trouble. Much of the industry rationalization in this down cycle is going to come at their expense as the strong eat the weak. I’ll have more to…

Oil Rises a Second Day as U.S. Inventories Decline, ECB Meets at Bloomberg . Blackout Highlights India’s Diesel Dependence at the WSJ . “NLG Bloodbath…rippling across the oil and gas industry” at Bloomberg . Devon JV’s some Permian…

Today brought coal stock upgrades and a 6% rally in natural gas, yet the coal stocks are weak after Friday’s barn buster rally. While pondering the action, let’s consider more fundamentals: Most important for coal is natural gas. Coal…

Oil Trades Below $90 a Barrel a Third Day on Supply Gain at Bloomberg . US, Europe face distillates shortages heading into winter: BofA Merrill Lynch at Platts . Also, gasoline stocks are at the low of their five year range, though crude…

Oil Advances From One-Week Low on Chinese Manufacturing Outlook at Bloomberg . Oil-Price Surge Is All About Iran from the WSJ . Blackrock: US Shale Boom: A Case of (Temporary) Indigestion at Scribd . Eagle Ford crude pricing: RBN Energy…

Holy crap! Nexon agrees to $15.1B takeover by Cnooc . Marketwatch The Chinese are coming! The American Shale Conundrum Facing China’s Energy Champions at WSJ (google the title to read the whole article). Oil Plunges to Four-Day Low as…

The chart is from the Economist . Future electricity generation demand just for air conditioning, and thus for coal, is wildly bullish ( Guardian ). Wind and solar are not going to get the job done. China is always the elephant in the room…

Oil Drops From Nine-Week High on Signs Demand May Weaken at Bloomberg . Oil prices will have a lot to say about how quickly U.S. unconventional production surpasses OPEC’s second and third largest producers: Petroleum Economist . The…

Oil Rises for a Seventh Day on U.S. Gasoline Stockpiles at Bloomberg . The WTI:Bakken differential has collapsed: Bloomberg . Risk to the Brent:WTI spread? Financial Post North America Average Annual Crude Oil Production 1980 – 2012 at…

Yesterday saw a large swath of the oilers gain strength as the day progressed. The larger the trading volume in the name, the stronger the stock. Oil Drops From Seven-Week High on Outlook for Economy at Bloomberg . As China imports have…

About yesterday’s BMO Report which sent the sector reeling: Business Insider . Very interesting, and the opposite of conventional wisdom: Key Facts: Plant Retirements Are A Trickle In 2012 & New Plants Outpace 2 to 1 Retirements : John…

Crude Trades Near Seven-Week High on Iran Tensions, Stimulus Speculation at Bloomberg . Fragile, but Comfortable, Oil Market Expected at Oil Price . Chinese crude imports at nine-month low at CGES . What happens to price if and when…

The coal group is getting beat down again today on the BMO downgrade. Their Alpha Natural Resources price target was lowered from $18 to $5 ( Yahoo ). ANR may have intrinsic value of $18 or ANR may have intrinsic value of zero. But not $5…

With a recovery in the coal complex dependent upon some kind of natural gas normalization, note natural gas is in oversupply in two ways: Storage and Supply. First, natural gas in storage is off the charts per the EIA . The low natural gas…

Oil is $1.25 higher as I type: Bloomberg . Commentary on oil decline rate assumptions, which points to world oil production being on an undulating plateau: ODAC-Info with a hat tip to Pedriven at Investor Village . Leading peak oil…

Yesterday WTI crude oil was higher by $1.25 on the potential Statoil strike, yet Canadian pipeline crude differentials rose more than $2 at Platts . This morning Crude Drops as Norway Ends Oil Strike, China Cuts Imports ( Bloomberg ). When…

Oil Rebounds as Norway Strike Looms at Bloomberg . Statoil Prepares to Shut Down Production As Strike Continues at the WSJ . “Problem is, the rebound last year was fuelled at least in part by an average deficit of 800,000 barrels a day for…

Outstanding coal analysis re-post by Gregor . First half 2012 coal production was down 6.2% vs 2011: EIA The greenies will try to slow coal exports: Business Week . Fundamental to reviving the depressed coal sector is a natural gas price…

Crude Oil Declines on Concern Economy Failing to Recover at Bloomberg . “The United States imported about 45% of the petroleum (crude oil and petroleum products) that we consumed during 2011. Just over half of these imports came from the…

Bank of England tacks on $78 billion to their printing program ( Marketwatch ). ECB cuts more rates than expected ( Marketwatch ). But China steals the show with a cuts ( Marketwatch ). One more take: FT Alphaville . Looks like the…

Oil Rebounds in New York on Global Stimulus Speculation , Iran at Bloomberg . The especially weak ISM manufacturing data yesterday was bullish, in a perverse way, because of a pavlovian market participant response to central bank easiness…

Below is the Q1 2012 production, full year 2012 production guidance, market cap as of yesterday’s close, and acreage of five favorite Bakken players: CLR 85.5 boed 91.8 $11.3b 915k+ WLL 80.7 boed 80.9 $4.5b 701k OAS 17.6 boed 18-22k $2.1b…

Brent – WTI curves are not converging any time soon at Sober Look . OPEC warns EU low oil prices threaten future supply security at Platts . “Venezuela is aiming for “an average price of $100 a barrel.”” at Business Week . Geo-politics are…

Simply said, $70 would cause a slew of problems for oil producers. Don’t look now but unless it is being priced of against waterborne oil, we are there. Economics get very skinny and capital budgets outspend cashflow with low oil prices…

Hello Brent contango at FT Alphaville . “…the U.S. will drastically reduce its reliance on important oil, in particular from the Middle East…China’s story is precisely the opposite.” WSJ Details on yesterday’s petroleum inventories: Hard…

Yesterday a report by Leonardo Maugeri created big buzz in the oil and gas community. The Oil and Gas Journal actually used the ridiculous 17 million number in a headline. The executive summery forgets about price . The WSJ and economist…

Oil Trades Little Changed as Storm Threat to U.S. Gulf Crude Supply Fades at Bloomberg . Annual Energy Outlook 2012 (Only 252 pages long): EIA This would only be the tip of the iceberg: Oil price fall slowing oilfield activity at Calgary…

We arrive at our desks to weak prices, even with Almost 23% Of Gulf Of Mexico’s Oil-And-Gas Output Cut By Storm : IB Times . Natty will remain depressed withdrawal season begins next fall, while oil needs help from the a ‘Saudi Arabia…

Steel-making met coal has remained strong so far, a commodity I lump into the ‘industrialization of China’ investment bucket. But most U.S. producers are electrical generation thermal coal production heavy. Thermal coal on its own competes…

Energy investors have one final straw to possibly grasp: Brent oil spent the previous fourteen months over $100; the 200 day moving average is $112. Brent now having a $91 handle wouldn’t feel so good. Perhaps the Saudi’s will cut…

Peter Brandt touched off a conversation with his “Generational Bottom” post this morning on natural gas. So, what is the financial instrument to play it? UNG? With the negative roll, I’ve never seen a crappier product. Futures? Premiums…

The central bankers seem to be in charge. Oil Gains a Second Day on Stimulus Speculation, OPEC Output Call at Bloomberg . Oil and price incentives: Econbrowser . A conservative take on the Bakken: NDDMR . Apache goes big on horizontal…

Expect the Bakken boys to report stellar Q2 numbers: “April…was the largest year-over-year increase in the state’s history at 73.5%…) via Mark Perry . Also, The Bakken Buck Starts Here – Bakken Crude Pricing – Part II at RBN Energy . Lower…

OPEC maintained quotas yesterday. “The U.S. shale boom is starting to sap demand from their most important customer. OPEC members are also consuming more of their own product, leaving less to export…The euro zone accounts for a mere 12 per…

Futures are higher this morning, one take: Reformed Broker . Raymond James Energy Stat of the Week pertains to thermal coal: Raymond James . Coal export perspective from the EIA . Oil Gains Most in Five Months on Spain Bailout, China at…

The Bakken Buck Stops Here-Bakken Crude Pricing-Part 1: RBN Energy Enbridge faces Bakken complaints: Globe and Mail Multi decade oil inflation-adjusted at Chart of the Day . Saudi Arabia Achieving $100 Oil Signals Output Reversal at…

Eagle Ford human interest article: Fuel Fix As production ramps higher in a new play, operators get behind before a maintenance level of backlog inventory is found. The Eagle Ford backlog at Eagle Ford Shale . Crude oil and refined product…

Shale of the Century at the Economist . Price matters, as natural gas displaces coal at the EIA . Capital Destruction in Natural Gas by Testosterone Pit . The IEA put out a natural gas report: Global Natural Gas Demand to Rise Sharply at…

Crude glut, price plunge put oil sands projects at risk at The Globe and Mail . Monthly U.S. imports: EIA “Since 2005 the global capacity of installed wind power has quadrupled, due to a variety of factors such as improved technology…

Raymond James Energy Stat of the Week: Is Brazil really on track to double oil production by 2020? Raymond James Pipelines to Profits at Barrons . (Google the title to be able to read the full story.) With bond prices so high, MLP’s are…

Fuel switching from depressed natural gas prices has coal inventories high. EIA Meanwhile, the beaten down coal stocks have held up in today’s shellacking. 24/7 Wall Street In this commodity super-cycle, every time Chinese imports have…

Three ideas stand out in the investment landscape: 1) Peak conventional oil production is still real, with the higher price deck and technological advancements changing the game . 2) The industrialization of China and the emerging markets…

OPEC spare capacity in the first quarter of 2012 at lowest level since 2008: EIA OPEC’s view of the world: Oil Price . OPEC’s Monthly Oil Market Report: OPEC Gregor: OPEC has lost the power to lower the price of oil. Chris Martenson The…

Seems everyday markets are opening strong and close weak. Today we finally opened weak, and while putting this post together green appeared on my screen. Does this make for the turn? The thermal coal stocks have been grim death and PCX is…

Natural Gas Vehicles: Raymond James Energy Stat of the Week Missing from the Export Land Model is the new booming US oil production growth. Saudi Arabia and solar power? Peak Oil Economist Mark J. Perry posts on oil: 1) Peak What? 2) Green…

Over the last three weeks blog postings here at Independent Stock Analysis have been coming at a rate of two or more every market day, plus one on Saturday. I am taking off Mother’s Day weekend for family time and a road race. Be sure to…

The news flow surrounding Chesapeake is so heavy I have taken the ticker off my screen. Everything else was being drowned out. With every generalist having an opinion this situation looks to last for some time. Chesapeake has always been…

Marathon Oil adds to their Eagle Ford assets with an acquisition of 17,000 net acres in the liquids-rich core of the Eagle Ford shale play for $767 million. My math makes it $44,118 an acre, which would need to be adjusted for production…

EOG Resources is the furthest along the learning curve with the largest position in the best play. CEO Mark Papa loves to talk about the Eagle Ford on their conference calls. Too bad EOG’s stock is richly priced: “Our press release again…

Kuwait minister says oil fair price at $100. Peak Oil Oil a ‘Little Bit High,’ Saudi Arabia’s Al-Naimi Says Peak Oil O&G Journal suggesting Bakken peak rates in the 1.5 to 2 million b/d range with a well saturation discount. Million Dollar…

Last decade investors were concerned about the industry’s ability to produce oil and gas. Natural gas conventionally produced was on a treadmill running too fast and producers could not keep up, forcing the price ever higher. Natural gas…

Is the commodity supercycle ending? Diapason via Pragmatic Capitalism Answer: How fast will they spend and print? A look at the fiscal cliff with Sober Look . The Bakken players were hurt by differentials in Q1. Williston Basin production…

Mark Perry at Carpe Diem is a conservative economist who often editorializes on the shale revolution. I appreciate his cheerleading as to the changed landscape stateside. But the world is different outside of America. Investors must be…

In February I wrote a Seeking Alpha essay , noting the circus surrounding the company. Two weeks ago the alcohol arrived to the party. I’ll paraphrase the key idea which appears lost in the noise: At $5 ng and $100 oil CHK is cash flow…

Looking at worldwide demand: Peak Oil Industry working hard on the mid-continent glut: The Globe and Mail Turning natural gas into diesel? RBN Energy Some big names note the sea change with horizontal drilling: Business Insider

From Aubrey McClendon via the WSJ (google “ Aubrey CcClendon: The Politically Incorrect CEO “): “You want to go ban fracking for a year? Knock yourself out. It would be marvelous for our share price,” because the limit on supply would send…

Profit-Taking in Offshore Drillers May Be Premature; LT Outlook Remains Solid: Raymond James Energy Stat of the Week US Production Surges: Hard Assets Investor Eagle Ford well starts sets the table for second half production boom: Fuel Fix…

Heading into the E&P first quarter earnings season, enjoy some oil links: Middle East and Africa oil consumption. Gregor Three days of E&P company presentations. IPAA North American energy independence. RBN Energy Saudi’s stockpiling oil…

Natural gas production has stabilized, but will it begin to decline? Pragmatic Capitalism takes a look. How Will Falling Gas Prices Affect E&P Companies’ Borrowing Bases? Raymond James Energy Stat of the Week