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shale oil and shale gas (i): oil as an investment vs. natural gas
I want to write about the changes that horizontal drilling and hydraulic fracturing have made in the economics of oil and gas by allowing drillers to tap deposits in shale. This is the first of three...
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oil? ebola? the dollar?–why stock prices have been falling
In many ways, stock market commentators have an unenviable task. At any given moment they have to come up with new and interesting reasons why stocks are rising or falling. The media gurus’...
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why the oil price will continue to be weak
supply and demand In the short term (read: for now and for some vague time into the future), demand for oil is pretty constant, no matter what the price (i.e., demand is inelastic). People need to...
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I’ve dusted off my Current Market Tactics page
Current Market Tactics: why stocks are selling off, and what to do now
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the view from Canada
Yesterday the Governor of the Bank of Canada, that country’s central bank, announced it was lowering short-term interest rates from 1% to .75% as an “insurance” measure to help the Canadian economy...
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oil: how the price dynamic has changed
Value Line vs. O”Neil My first Wall Street job was with Value Line, a firm which has seen better days but which dominated the retail market for investment information in the 1970s – 1980s. It still...
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effects of lower oil prices
At $50 a barrel oil vs. $100 a barrel: 1. High-cost alternatives hydrocarbon like liquefied natural gas (LNG), where projects require billions of dollars in spending on infrastructure–cryogenics at...
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sorting out oil-related stocks
The very large drop in oil prices over the past eight months has had negative effects on all oil-related firms. The amount of suffering varies considerably, however, based on how a given firm is...
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the US dollar and commodities
dollar strength is unusual Over my working career, the US government has maintained a policy of encouraging gentle US dollar weakness, while keeping up a rhetoric (for domestic consumption) of wanting...
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what would $20 a barrel oil mean for stocks?
Yesterday I wrote about the recent Goldman report speculating that oil might fall to $20 a barrel. What would this mean for stocks? a $40 ceiling… To my mind, the most important observation is the...
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a tale of two markets …or three …or one?
In yesterday’s Keeping Score, I outlined the performance by sector of the S&P 500 component sectors over the past one and three months. Here’s the same information for 2015 to date, through the...
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thinking about 2016: oil
Regular reader Chris commented about yesterday’s post that we may be in the early stages of a decade+ downcycle in the oil price. I thought I’d elaborate on that thought today. base metals–gold, too I...
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Shaping a Portfolio for 2016: a data dump on oil
This time last year I was embarrassingly silent about oil, which I considered to have poor prospects–and still do. So naturally I’m going to go overboard in the other direction now. If there’s a...
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Shaping a Portfolio for 2016: petrodollars
Petrodollars is the term coined in the 1970s to describe the money flow from oil consuming nations to oil producers–meaning by and large OPEC–during a decade when the crude oil price skyrocketed from...
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Shaping a Portfolio for 2016: dealing with oil
Energy stocks now make up about 7% of the market capitalization of the S&P 500. That’s not much. They make up about 14% of the junk bond universe, however. And they’re a huge chunk of emerging...
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oil: confusing correlation and causation
This is about the current state of the oil market. The fact that two things occur together (correlation) does not always mean that one causes the other. For example, every morning the rooster crows and...
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oil …again
After a long period of the stock market thinking that lower oil prices are a good thing (for all sectors except Energy), the market now appears to have adopted the opposite view. Over the past short...
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oil company 4Q15 earnings reports
The 4Q15 earnings reports of the biggest integrated oil companies have two common elements: –large profits from refining and marketing. How so? Companies aren’t passing on to their customers, either...
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the Obama $10 per barrel oil tax
Last week, the Obama administration said its upcoming budget will contain a proposal for a $1o a barrel tax on oil. Its purpose would be to fund infrastructure, as well as to use price as a tool to...
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latest news on oil
Three developments in the last week or so: —Saudi Arabia has clarified for reporters the significance of its recent agreement with Russia, Venezuela and Qatar to refrain from increasing oil production....
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