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Energy & Commodities

Record High Oil Inventories Crush Hopes For $70 Oil

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Posted by Christopher Johnson

on Friday, 17 February 2017 06:51

10ef99737f71bb9bdbb5055d0d39f027Plus "Oil rises after news OPEC could extend output cuts"

Another week brings yet more signs that the highly-anticipated oil market “balance” will not occur in the immediate future. Heading into 2017, there was a broad consensus that global oil production would fall below demand in the first half of the year, a deficit that would help bring down inventories and lead to relative balance between supply and demand. Mid-2017 seemed to be the timeframe that everyone was looking at for this development to occur.

But there are growing signs that the oil market won’t reach balance by then, and perhaps not this year at all. “We don’t really see a real balancing of the market coming until much much later,” Richard Gorry of JBC Energy Asia told CNBC in an interview. “Right now the oil market is oversupplied by about 500,000 barrels per day in the first quarter. So to see inventories continue to go up is absolutely of no surprise to us.”

...continue reading HERE

...related:

Oil rises after news OPEC could extend output cuts

Oil prices rose on Thursday after OPEC sources said the group could extend its oil supply-reduction pact with non-members and might even apply deeper cuts if global crude inventories failed to drop to a targeted level.



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Energy & Commodities

Silver: On The Verge Of A New Bull Market?

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Posted by GoldStockBull

on Thursday, 16 February 2017 12:22

It’s been an exciting start to the year thus far for precious metals investors. Both metals are off to a good start, and the January rallies are very reminiscent of 2016. Despite the 9% rally off the lows for silver, we still have a reading of more than 3 bears for every 1 bull. Bullish sentiment is still in bearish territory on silver, and the metal has been locked in a descending channel for nearly 7 months now. Fortunately for the bulls, the trend in sentiment in data is finally starting to turn the corner, and brighter days may be ahead.

SilverSenti130-1024x475

... for larger charts and more analysis go HERE



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Energy & Commodities

The Blood Bath Continues In The U.S. Major Oil Industry

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Posted by Steve St. Angelo - SRSrocco Report

on Thursday, 09 February 2017 06:11

The carnage continues in the U.S. major oil industry as they sink further and further in the RED.  The top three U.S. oil companies, whose profits were once the envy of the energy sector, are now forced to borrow money to pay dividends or capital expenditures.  The financial situation at ExxonMobil, Chevron and ConocoPhillips has become so dreadful, their total long-term debt surged 25% in just the past year.

Unfortunately, the majority of financial analysts at CNBC, Bloomberg or Fox Business have no clue just how bad the situation will become for the United States as its energy sector continues to disintegrate.  While the Federal Government could step in and bail out BIG OIL with printed money, they cannot print barrels of oil.

Watch closely as the Thermodynamic Oil Collapse will start to pick up speed over the next five years.

According to the most recently released financial reports, the top three U.S. oil companies combined net income was the worst ever.  The results can be seen in the chart below:

Top-Three-US-Oil-Companies-Net-Income

In 2011, ExxonMobil, Chevron and Conocophillips enjoyed a combined $80.4 billion in net income profits.  ExxonMobil recorded the highest net income of the group by posting a $41.1 billion gain, followed by Chevron at $26.9 billion, while ConocoPhillips came in third at $12.4 billion.

However, the rapidly falling oil price, since the latter part of 2014, totally gutted the profits at these top oil producers.  In just five short years, ExxonMobil’s net income declined to $7.8 billion, Chevron reported its first $460 million loss while ConocoPhillips shaved another $3.6 billion off its bottom line in 2016.  Thus, the combined net income of these three oil companies in 2016 totaled $3.7 billion versus $80.4 billion in 2011.

Even though these three oil companies posted a combined net income profit of $3.7 billion last year, their financial situation is much worse when we dig a little deeper.  We must remember, net income does not include capital expenditures (CAPEX) or dividend payouts.  If we look at these oil companies Free Cash Flow, they have been losing money for the past two years:



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Energy & Commodities

The Canadian Comeback: Oil Rig Productivity Takes A Huge Leap

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Posted by OilPrice.com

on Thursday, 02 February 2017 07:47

20170126 Figure 1ACanada’s Western Canadian Sedimentary Basin (WCSB) is one of the largest repositories of hydrocarbons in the world, with plenty of source rocks that are conducive to the same innovative processes that are delivering impressive results in the US. Yet productivity improvements in Canada have lagged – until recently.

Introduction of larger, AC electric “triple” rigs that can walk on pads has lagged the US. But the modern fleet has risen in the WCSB and geriatric rigs have been retired. Over the past year other ingredients in the United States secret sauce have been adopted by Canadian industry in a big way. Established producers in the WCSB are going down the learning curve quickly; validating the notion that Canadian rocks can perform as well as other highly productive regions

....read more HERE

....also:

Weaker US$ Could Send Gold & Gold Stocks to Higher Targets

 



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Energy & Commodities

"Jobs Report Week: Gold Stays Firm"

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Posted by Stewart Thomson - Graceland Updates

on Tuesday, 31 January 2017 09:57

Jan 31, 2017

  1.      As I have noted for many years, gold has a rough general tendency to decline ahead of the US jobs report, and then rally in the hours and/or days following the release of the report.
  2.      The next monthly jobs report will be released at 8:30AM on Friday. This report and the closure of the Chinese gold market for the New Year’s holiday should be quite negative for gold, but… 
  3.      The sell-off from the $1220 area is orderly, and gold feels firm.
  4.      Please click here now. Double-click to enlarge.  Gold did break down from a small double top pattern.  
  5.      The price target of the pattern is $1170, but there may be an uptrend channel forming. I’ve highlighted that in blue.
  6.      Also, the lead line of the 14,7,7 Stochastics series oscillator that I use exclusively on daily bar and candlestick charts is now sitting at about 50, where momentum-based rallies can occur.
  7.      With China offline and the jobs report dead ahead, why is gold acting so firmly? Well, please click here now. Double-click to enlarge.  The US dollar looks very weak on this daily bars chart against the Swiss Franc.
  8.      It’s broken down from a head and shoulders top pattern, and has not rallied since arriving at technical support yesterday. 
  9.      The rally could still happen, and that would likely push gold down to $1170 ahead of the jobs report. 
  10.      Given that gold has rallied from $1125 to $1220, a decline to $1170 is perfectly normal. An orderly decline like this should not make gold investors nervous.
  11.      Please click here now. Double-click to enlarge this dollar versus yen chart.  
  12.      All gold community eyes should be focused on the 112.50 price level. A breakdown below that level would almost certainly usher in a gold price rally to my $1250 target zone.
  13.      The Swiss franc, the Japanese yen, and gold bullion are all viewed as key “risk off” assets by bank FOREX traders. 
  14.      It’s clear that the dollar is struggling now against both the franc and the yen. 
  15.      Please click here now. Double-click to enlarge this weekly bars euro versus the dollar chart.
  16.      The euro never rallied against the dollar in 2016 in the way that the franc, yen, and gold did. 
  17.      That’s partly because Europe’s economic recovery has been more anemic than America’s, but mainly because euro is not viewed as a safe haven currency by the large bank traders.
  18.      Having said that, most gold price discovery takes place in US dollars, and a rally in the euro could add some zest to the gold price!
  19.      The recovery taking place in Europe now could be enough to reverse the ECB’s policies of QE and low interest rates. 
  20.      That would create both European inflation and a euro rally.
  21.      Please click here now. Double-click to enlarge this daily bars GDX chart.
  22.      Gold stocks are performing exceptionally well since gold ran into resistance at my $1220 target zone. 
  23.      Can GDX rally to $25 if gold falls to $1170? I think that’s asking a bit much (for now), but GDX should easily rally to $25 if gold can climb back to $1220.
  24.      A rally to $1250 would likely see GDX surge to $28, and a bigger move to $1650 for gold should see GDX make a new all-time high. That’s a bit further down the road, but eager gold stock investors should ensure they are building a solid block of core positions now, to partake in all the upside fun!


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