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Energy & Commodities

U.S. Shale Is Now Cash Flow Neutral

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Posted by Oilprice.com

on Friday, 23 December 2016 06:53

Oil prices are probably already high enough to spark a rebound in shale production.

The IEA says that in the third quarter of 2016, the U.S. shale industry became cash flow neutral for the first time ever. That isn’t a typo. For years, the drilling boom was done with a lot of debt, and the revenues earned from steadily higher levels of output were not enough to cover the cost of drilling, even when oil prices traded above $100 per barrel in the go-go drilling days between 2011 and 2014. Even when U.S. oil production hit a peak at 9.7 million barrels per day in the second quarter of 2015, the industry did not break even. Indeed, shale companies were coming off of one of their worst quarters in terms of cash flow in recent history.

That all changed around the middle of 2015 when the most indebted and high-cost producers went out of business and consolidation began to take hold. E&P companies began cutting costs, laying off workers, squeezing their suppliers and deferring projects that no longer made sense.

By 2016, oil companies large and small had shed a lot of that extra fat, running leaner than at any point in the last few years. By the third quarter, oil prices had climbed back to above $40 and traded at around $50 per barrel for some time, replenishing some lost revenue. That was enough to make the industry cash flow neutral for the first time in its history.

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Energy & Commodities

Indexing Marijuana’s Monster Growth

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Posted by Daniel Collins Editor in Chief Modern Trader

on Thursday, 22 December 2016 06:45

To be a legitimate market sector, you must have a benchmark to measure what qualifies as under- and over-performance.

A large debate that has grown in investing circles during recent decades is the ability for professional investors to provide “alpha” rather than simply “beta.” That they are adding value rather than just collecting the value provided by the broad market or a specific sector. Legitimate market sectors draw investors and those investors are being asked to prove their value not only versus the broad market but versus the particular sector or strategy group they are involved in. 

So, if an emerging industry is going to attract professional investors, it will be asked to measure its performance versus a benchmark. The Marijuana Index, which is owned by MJIC, tracks the performance of the legal marijuana industry. This includes companies that directly handle legal marijuana, such as marijuana producers, processors, distributors and retailers. It also includes companies that don’t directly handle plant product, but cater to those who do, as well as to consumers. These “ancillary” businesses operate in a wide range of industries such as consumption devices, product packaging, information technology, equipment, business services and more, says Dan Nicholls, vice president at The Marijuana Index. “Our definition of marijuana includes all forms and applications of the marijuana, cannabis and hemp plant, including cannabinoids such as CBD or THC,” says Nicholls, adding that it does not, however, include activities related to synthetic cannabinoids.

MJIC breaks down the Marijuana Index into three indexes: The North American Index, American Index and Canadian Index (see “One plant, 3 indexes,” below). Currently there are 23 stocks in the overall index, 13 American and 10 Canadian (see “The roster,” below). MJIC recently reconfigured the index based on specific criteria. “The start of this year we revamped the index, putting in place strict eligibility criteria,” Nicholls says. 

MT January CoverStory Index OnePlant

....much more analysis and charts HERE

...related, Mark Leibovit was in on Marijuana at the very bottom and recently took "Monster Profits":

 



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Energy & Commodities

Commodity ETF Overview

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Posted by Hard Assets Investor

on Wednesday, 21 December 2016 08:47

Commodities-VadodaraCommodities are known as the raw materials for production processes. Investing in them provides investors with exposure to unique factors that historically have brought diversification and inflation hedging benefits to traditional portfolios. Nowadays, ETFs have expanded the availability of commodity investments providing exposure to single commodities and commodity-linked indexes. At the same time, ETFs have exposed investors to a new set of risk factors that may be unfamiliar to the average investor.

This channel is designed to help you understand commodity ETFs, how they work, how they are built, their risks and their rewards, so that you can decide if commodity ETFs deserve a place in your portfolio.

...look at the complete list of ETF's and their performance HERE

...related:

Canada's Oil Exports Would Be Dead Without U.S. Shale Production



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Energy & Commodities

Canada's Oil Exports Would Be Dead Without U.S. Shale Production

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Posted by Seeking Alpha

on Friday, 16 December 2016 07:29

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As of 2015, 36% of total U.S. crude imports come from Canada.

Canada is a large exporter of low API grade crude referred to as heavy crude oil, most of which comes from Canada’s bituminous Oil Sands deposits.

To deal with the lack of fluid-flow of Canadian heavy oil and bitumen, some oil production is partially refined to produce synthetic crude, which creates more fluidity.

How is it that Canada could be dependent on U.S. oil production? As of 2015, 36% of total U.S. crude imports come from Canada. As Canada continues to exports over 3 million barrels per day of oil to the U.S., what direct role does the U.S. have in allowing Canadian oil to flow southward?

....continue reading HERE



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Energy & Commodities

Agriculture Booms - Canada Well Situated

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Posted by David Zammit & The Agri Food Value View

on Wednesday, 14 December 2016 13:29

FCC Releases Canadian Agriculture's Productivity and Trade Report

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For 2016 to date:
       Agri-Equities: +18%        
       S&P 500: +11%
       NASDAQ: + 9%

Farm Credit Canada (FCC) has released its latest Canadian agriculture productivity and trade report.

The purpose of the report is to look at the overall performance of Canadian agriculture and world markets.

FCC chief economist J.P. Gervais explains what sets Canada apart from other countries when it comes to productivity.

"We're the fifth largest exporter when it comes to agriculture commodities in the world. The idea that we've been able to grow production on our farms faster than the rate of growth of farm inputs. Because of that we manage to grow our exports in world markets, that's what really sets us apart in when it comes to expanding our success in the world markets,"

Gervais notes that 30 per cent of Canada's income in the ag sector comes from exports to the United States, although that could change in the future.

"We have diversified the importance of the US market, we've diversified away from the US, in terms of relying on the US as an export destination over the last few years. I think we're going to be able to continue doing the same, I think it's a good strategy, we're going to always the United States for probably a long time, but diversifying away from the US is actually a pretty good thing," Gervais said.

Canada was the world's fifth largest agriculture exporter in 2015.

....read page 2 HERE

...related: 

Agri-Commodities: Birthing a New Bull?



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