Goldman Sachs Pegs $20-40 as New #Oil Order Range
After a decade-long “investment phase” that helped unleash the shale revolution, oil is seeking a new equilibrium between supply and demand. Jeff Currie, head of Commodities Research for Global Investment Research at Goldman Sachs, describes how the market has entered an “exploitation phase” that puts downward pressure on prices.
PUTTING SENSE TO AN INDUSTRY'S TRANSFORMATION
Saudi Aramco: The Oil Giant’s Known Unknowns
If Saudi Aramco were to become a holding company with 5% or so of its… Saudi Arabian Oil Co.: A company that enriched its private investors for decades through what was called a “golden gimmick” beckons to foreign capital once again. That foreshadows how tantalizing, yet complicated, an investment in what is known as Saudi Aramco may be. If the national oil champion were to become a holding company with 5% or so of its shares listed on the stock market, it would be too large for investors to ignore. Based on what Saudi Arabia’s Prince Mohammed bin Salman estimated to be a potential market value of $2 trillion to $2.5 trillion, just its proposed float would be larger than supermajor BP BP -1.12 % or as valuable as ConocoPhillips COP -2.83 % and Italy’s ENI E 0.38 % combined. But a proposed initial public offering of the company […]
7 Must-See Commodities Charts
Gold, being one of the leading commodities, has shown great strength in 2016. Uncoincidentally, gold has bounced right at secular support in January of this year. This is another proof that secular trend lines are extemely powerful. Note how this trend line was the last of three secular trend lines. As gold will retrace in the near future, it is imperative that the trend line is not broken to the downside, which would be the ultimate confirmation that the secular bull market is intact.
Oil and Gas Companies Turn to Digital Technology as Low Energy Prices Pressure Business
Oil and gas companies are turning to digital technologies to lower costs and improve efficiency as the industry struggles with low energy prices. Information technology budgets have decreased by 10% or more at oil and gas companies during the slump, according to IDC. Analysts say companies still are strategically spending in areas such as analytics, mobile, and cloud that can lower costs and, in some cases, help improve well production. Oil prices started to fall after a peak of $114.81 a barrel on June 20, 2014. The global Brent benchmark on the ICE Futures Europe exchange has dropped 61.2% over the last 22 months to $44.53 on April 21. During the same period average gas prices in the U.S. fell to $2.09 a gallon from about $3.70 a gallon. Plunging oil and gas has spurred cutbacks with 84,000 jobs lost in Texas, according to the Texas Alliance of Energy […]
Weakened Saudi Arabia Could See Social
Unrest After Economic Shakeup
Despite oil’s rebound from cyclical lows and the world’s exuberance that the energy space may be saved (on the basis of headline-reading algo pumping momentum into commodity futures products that only leveraged Chinese speculators could find value in), something ugly is occurring in Saudi Arabian money-markets. There appears to be a growing funding squeeze in The Kingdom as 3-month interbank rates spike above 2 percent for the first time since January 2009, prompting King Salman to approve a ‘post-oil economic plan’. (Click to enlarge) Whether this spike is responsible or not, The Kingdom is clearly seeking ways to reduce its reliance on crude. As Bloomberg reports, King Salman approved a blueprint for diversifying the country’s economy away from oil on Monday, a package of developmental, economic, social and other programs. Saudi Arabia’s plan for the post-hydrocarbon era will have to overcome habits developed over decades of relying on
