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Top Three Reasons Why Oil Prices Are Poised to Rally
Experts roundly agree that the recession is only a short-term blip in the long-term escalation of oil prices.
And this time, there are 1.05 trillion reasons why oil is going to climb well past its peak last year.
Table of Contents:
- Oil Production: Why OPEC’s Keeping a Lid on Production
- Oil Prices: Why Crude Thrives on the Diving Dollar
- Oil Outlook: The Coming Oil Price Shock
- Investing in Oil: The Best Companies, Stocks and ETFs
Oil has staged an impressive rally since dropping below $35 a barrel in mid-February.
And while there remains a risk that prices will retreat further due to sluggish demand,…
Lack of Investment Will Lead to Higher Oil Prices
Oil companies are slashing new investment and production far more sharply than analysts projected just a couple of months ago, a strategy analysts say could lead to shortages and higher gas prices when consumption rebounds. And, analysts say, a standoff between the oil giants and their suppliers over the cost of rigs, labor and other expenses could prolong the investment slowdown.
"The turnaround will probably come faster than people expect, and the supply won’t be there," says Joseph Stanislaw, an adviser to Deloitte’s energy practice.
Oil companies are shaving exploration and production spending 18% this year, including a…
4Mar2009 | The Real Deal | 0 comments | Continued5 Signs the Economy is Recovering
What a relief. The markets are up. We’re all saved. It’s time to spend again. Borrow away. The panic’s over. A recovery is coming in 2010. We’re home free, right?
If you listened to Fed Chairman Bernanke today that’s what we would be led to believe. He said “there is a reasonable prospect” the recession will end this year.
Now, I know we have too many houses in overbuilt suburbs that nobody wants at these prices. And the auto industry is sucking down billions of cash each month. Housing prices are still falling. It goes on and on. But the government has…
25Feb2009 | Q1 Publishing | 0 comments | ContinuedInvestors Made 566% the Last Time This Happened
No one really knew what to expect when Sid Bass took over the family oil business in 1968. Sid’s father and uncle were wildcatters who struck it rich in the 1930’s. The two built an oil company with 120 wells and a combined fortune of $50 million over the next three decades.
In 1968, the family fortune was handed over to Sid. Once at the helm, Sid hired Richard, one of his old college buddies, away from Goldman Sachs to help him invest the family’s fortune.
They couldn’t have gotten off to a worse start. The pair thought a more “aggressive”…
5Feb2009 | Q1 Publishing | 0 comments | ContinuedCould Oil Supply Fall 20 Million BPD Over Next Three Years?
Randy Ollenberger, managing director of oil and gas research at BMO Capital Markets, said global oil supply could decline by as much as 20 million barrels a day over the next three years if the oil industry stops investing new capital, whether by building new projects or sustaining existing ones, because oil prices are too low. This would dwarf a decline in demand of about 2.25 million barrels a day over the same period.
"The market is fixated on the demand side and ignoring the supply side, and if oil prices remain at these levels, what we will see is…
29Jan2009 | The Real Deal | 0 comments | ContinuedFormer Talisman Energy CEO says low oil prices only temporary
Consumers shouldn’t get too comfortable with cheap gasoline, because the planet is running out of oil and prices will go "sky high" — as high as $20 per litre — as petroleum reserves dwindle in the coming years.
That’s the view of Jim Buckee, the British oilman who was CEO of Calgary-based Talisman Energy Inc., one of Canada’s largest energy producers, from 1993 to 2007.
Black oil has peaked," he said in telephone interview this week. "The biggest oilfields in the world have been producing for 50 years and they’re all getting tired."
He says no giant oilfield, capable of replacing those…
16Jan2009 | The Real Deal | 0 comments | ContinuedWhy Crude Oil Will Present Investors with a Golden Opportunity in 2009
Oil prices have fallen 70% since hittinga record $147.27 a barrel in July, which means in just five months, crude has given up all the price gains it made in the past four years.
After such a wrenching plunge, many analysts believe the outlook for the “black gold” remains bleak – and in the short term it certainly is. In the long run, however, dwindling supplies, resurgent demand, and a lack of investment will cause crude oil to double, triple, or even quintuple in price over the next few years.
In fact, the Paris-based International Energy Agency (IEA) – energy advisor to…
29Dec2008 | Money Morning | 0 comments | ContinuedOil Prices Climb on Speculation that OPEC and Russia will Cut Production
Speculation that oil prices are beginning to bottom helped push crude contracts higher yesterday (Wednesday), as traders closed out short positions and rumors surfaced that both Russia and the Organization of Petroleum Exporting Countries (OPEC) are planning to cut production next week.
Light, sweet crude for January delivery rose $1.45, or 3.4% to settle at $43.52 on the New York Mercantile Exchange, after climbing by as much as 7% earlier in the day. Futures have plunged roughly 70% since hitting a record-high $147.27 a barrel in July. However, they may be set for a rebound as traders close out short positions and production cuts…
11Dec2008 | Money Morning | 0 comments | ContinuedGlobal Investing Roundups
AT&T Disconnecting 12,000 Jobs; Credit Suisse Announces 5,300; Capital One Puts Chevy Chase in Its Wallet; Argentina Announces $3.9 Billion Stimulus, Jobless Benefits at 26-year High; Dupont Cuts 2,500 Employees; Williams-Sonoma Beats Estimates; Oil Falls 5%
- AT&T Inc. (T) said it would scale back 12,000 jobs, about 4% of its workforce, between now and the end of 2009 to fight "economic pressures, a changing business mix and a more streamlined organizational structure." It will also take a severance charge of nearly $600 million for the fourth quarter, Reuters reported.
- Credit Suisse Group AG (ADR: CS) will scale back its workforce, eliminating 5,300 workers,…
OPEC Left to Deliberate as Oil Prices Plummet
Crude oil prices have plunged two- thirds from its record high during the summer, and the likelihood they’ll fall further has caused panic among oil-producing nations and inspired the Organization of Petroleum Exporting Countries (OPEC) to call another meeting this week to discuss possible production cuts.
After blitzing to a record-high $147 a barrel in July, oil last week receded below $50 a barrel, causing a stir among energy companies and oil-producing nations that rely heavily on exports for income. Some analysts predict that oil could fall to $30 or $40 a barrel by early 2009, as so-called “demand destruction” sets…
24Nov2008 | Money Morning | 0 comments | Continued
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