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Energy & Commodities

Dan Steffens: Energy Sector Making a Comeback

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Posted by Financial Sense

on Thursday, 28 September 2017 06:43

EnergySectorThe price of oil is finally back above $50 and Dan Steffens, President of the Energy Prospectus Group, believes the remainder of the year will be quite bullish for the energy sector.

Market Direction Is Up

With demand projected to continue growing this year into next, inventories tightening and continuing to fall, and rig counts decreasing, we can expect oil prices to go up into year-end, said Steffens.

It’s interesting to note that in the first quarter, S&P 500 profits largely came from the energy sector. Yet, energy stocks have been decimated since then.

Steffens follows about 50 publicly traded companies, and almost all are down year-to-date even though they’re having a better year financially.

There's “this fear that there’s going to be a big collapse in oil and gas prices,” he said. “I don’t see it happening. I don’t see any way sub-$50 oil can be maintained and meet future demand for refined products.”

While Steffens doesn’t think we’re going to see $100 anytime soon, he believes we will hit around $65 oil in 3 or 4 months.

Energy Stocks Unloved

....continue reading HERE

 

Also Consider: Dan Steffens: Energy Sector Massively Undervalued (Podcast)



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Energy & Commodities

Commodities Bottom as Emerging Markets Breakout

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Posted by Rambus Chartology

on Thursday, 28 September 2017 05:02

Tonight I would like to update some of the different commodities and emerging markets we took some positions in back in late July of this year. First, let me say that as investors we like everything to line up in perfect harmony so we can make some sense out of what is actually happening in the markets. It’s just human nature. For example, if the US dollar is doing this then the PM complex or the commodities should be doing that. There is a general rule that there is an inverse correlation between the US dollar and the PM complex or commodities, but it’s not always accurate.

Many times we can get bogged down trying to make everything fit perfectly before we make a trade. This can sometimes lead to missed opportunities as what we were expecting didn’t take place. For the most part this is one of the reasons why I prefer Chartology. When a pattern is building out the bears and bulls are making their side known by the battle they’re having with each other, which eventually creates a consolidation or reversal pattern. All the fundamentals that a stock has is also priced into the chart pattern.

Many times as investors we have to know why a stock is doing what it’s doing, from a fundamental point of view, which can begin to complicate things to the point where we become more confused than ever and can’t see the forest for the trees anymore. For me personally I try to keep it fairly simple by looking at what chart pattern is building out and base my buy or sell points by what the chart is suggesting. Nothing is perfect when it comes to trading the markets, but sometimes less is more.

I know right now many investors are seeing a stronger dollar and expect that commodities will head much lower based on the inverse correlation these two generally have which may in fact turn out that way. From a Chartology perspective many of the different commodities built out very large reversal patterns, which is going to be very hard to reverse those patterns. So regardless of what the US dollar is doing I have to go with what the chart patterns are suggesting.

Lets start by looking at a weekly chart for Copper which built out a very large 3 year inverse H&S bottom. About 3 months ago we got the breakout above its neckline telling us the bottoming process was complete. After a strong breakout move Copper is now pulling back to the breakout point forming a backtest to the neckline which will come in around the 2.75 area along with the 30 week ema. Until something changes this bullish setup I have to respect what the chart is saying regardless of what the US dollar is doing presently.

Screen Shot 2017-09-28 at 6.06.38 AM

 

Double Click to Get Full Chart

The 20 year monthly chart for Copper shows a very symmetrical H&S bottom forming after an almost 7 year decline. This is the area one would be looking for some type of reversal pattern to form.



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Energy & Commodities

The Biggest Global Tax Break Ever Bubbles Up from Texas Oil Industry

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Posted by Frank Holmes - US Global Investors

on Tuesday, 26 September 2017 07:54

COMM-texas-oil-rig-map-09222017

Recently, I had the privilege of appearing on “Countdown to the Closing Bell,” Liz Claman’s program on Fox Business. When asked if I was nervous that stocks are heading too high, I said that I’m very bullish. All around the world, exports are up, GDPs are up and the global purchasing manager’s index (PMI) is up.

Oil prices continue to remain low, however, thanks in large part to the ingenuity of Texas fracking companies. As I told Liz, this has served as a multibillion-dollar “peace dividend” that has mostly helped net importing markets, including “Chindia”—China and India combined, where 40 percent of the world’s population lives—Japan and the European Union.

What Makes Texas Unique and Great

I can’t emphasize enough how impressive it is that Texas shale oil producers continue to ramp up output even with crude remaining in the $50 per barrel range.

This underscores their efficiency and innovation in drawing on oil reserves that were largely out-of-reach as recently as 10 or 12 years ago. What’s more, common law property rights here in the U.S. benefit mining companies in ways that simply can’t be found in Latin America and other parts of the world that operate under civil law.



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Energy & Commodities

SWOT Analysis: Opportunities Across the Gold Mining Space

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Posted by Frank Holmes - US Global Investors

on Monday, 25 September 2017 06:12

Strengths

  • Typical of FOMC meeting weeks, we tend to see the precious metals take a hit. The best performing precious metal for the week was palladium, off 0.43 percent on little market moving news.  Ford announced that it will add more downtime to five North American automobile plants due to a decrease in demand as inventories rise on dealer lots.
  • The gold price could soon recover, says Jason Schenker, president and founder of Prestige Economics, the reason being that the Federal Reserve might raise rates less rapidly because of low U.S. inflation. “The fact that the Fed members lowered their forecast for their own future Fed funds rate indicates that the Fed may again kind of undershoot what they’re predicting they’re going to do for rates,” Schenker told Bloomberg. This could end up being neutral to bearish for the dollar, which would help support the gold price.
  •  Gold has begun to climb back toward $1,300 an ounce on safe-haven demand now that tensions between Washington and Pyongyang are steeply escalating. Following new U.S. sanctions against North Korea, the rogue Asian country’s leader Kim Jong-un threatened to detonate a hydrogen bomb in the middle of the Pacific Ocean. With the back-and-forth rhetoric intensifying, investors’ interest in safe havens, gold included, has been renewed.

Weaknesses 

  • The worst performing precious metal for the week was platinum, off 3.77 percent.  Platinum prices has been out of favor for the last couple of years, recently prompting Impala Platinum, the world’s second largest producer, to propose some job cuts in South Africa that could lead to supply disruptions if labor is not on the same page.  Earlier this week, gold dropped below $1,300 an ounce as risks receded of another hurricane striking the mainland U.S. and as major stock market averages continued to hit record highs on a near-daily basis. In addition, a diplomatic resolution to the nuclear standoff with North Korea appeared likely, with Secretary of State Rex Tillerson saying the U.S. is seeking a peaceful conclusion.
  • The gold price responded negatively to Fed officials’ announcement that the central bank would begin unwinding its $4.5 trillion balance sheet as soon as October and also signaled additional rate hikes in 2018 following a December hike. Speaking with Bloomberg, RJO Futures’ Bob Haberkorn said that “the unwinding, coupled with the hawkish tone for December and the three hikes next year, could weigh on gold for the time being.”

9-25fh



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Energy & Commodities

Oil rallies on storms, increased demand and potential OPEC cuts

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Posted by Phil Flynn - The Price Futures Group

on Friday, 22 September 2017 08:02

iStock 000012333468XSmall 6
Oil prices hit a four-month high on bullish data from the Energy Information Administration (EIA), strong global and U.S. demand and the fact that oil products are at a multi-year low (see chart below). That situation is not going to improve after Hurricane Maria dealt a devastating blow to Puerto Rico and St Croix, wiping out small refineries and oil product storage tanks. But the threat to the rally is the Fed pronouncement that they want to raise interest rates in December, giving strength to the dollar and a downgrade to the Chinese credit rating, which will potentially raise future demand concerns. Yet talk that OPEC and non-OPEC may cut back on more production give oil bulls a slight edge even though the market fails to officially break-out, staying below that upper Bollinger band resistance.

FLYNN Sep 21



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