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Drowning in a Strategy

Date: 13 August 2015

Saudi Arabia has long enjoyed the status of being the top crude oil exporter in the world. With record production of 10.564 million barrels per day in June 2015, Saudi Arabia has been one of the major driving forces behind the current oil price slump.

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Could Demand for Oil Outstrip Supply?

Date: 8 August 2015

Many oil companies had trimmed their budgets heading into 2015 to deal with lower oil prices. However, the rebound in April and May to $60 per barrel from the mid-$40s suggested that the severe drop was merely temporary.

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WTI and Brent May Cross Paths

Date: 6 August 2015

A flood of bearish news has pushed down oil prices to their lowest levels in months, with WTI nearing $45 per barrel and Brent flirting with sub-$50 territory.  With a bear market back, there is pessimism throughout the oil markets. Goldman Sachs is even predicting oil stays at $50 through 2020, a profoundly grim view of the state of oil supplies.

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The Big Bet on Lithium

Date: 29 July 2015

The age of electrification across the transportation sector, the solar panel revolution, and Tesla's battery gigafactory are igniting a battle for the cheapest battery. That will transform lithium into a boom-time mineral and the hottest commodity on the energy investor's radar. It has been easy to take lithium for granted. This wonder mineral is the backbone of our everyday lives, popping up in everything from the glass in our windows to our mountains of electronics.

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Saudi Arabia Waits out the Competition

Date: 28 July 2015

The undisputed king of oil and gas is making some moves that could change the face of the global refining sector.  In June 2015, Saudi Arabia pumped a record 10.564 million barrels a day. As if being the world's biggest exporter of oil was not enough, the desert kingdom is now looking to conquer the refining sector, as it has quickly become the fourth largest refiner in the world.

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Bearish on Oil Means Bearish on Oil Jobs

Date: 22 July 2015

With the recently concluded nuclear deal between Iran and the P5+1 countries, oil prices have already started heading downward on sentiments that Iran's crude oil supply would further contribute to the already rising global supply glut. The economic crisis in Greece, OPEC's high production levels and China's market turmoil have created more pressure on oil prices, making a price rebound look highly unlikely in the near future.

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What is going on with IEA and EIA Oil Data?

Date: 15 July 2015

In the past, I documented the overstatements by both the IEA and EIA in 2014 & 2015 in terms of supply, inventory, and understatements of demand. Others also noticed these distortions and, whether intentional or not, they exist and they are very large in dollar terms. These distortions, which are affecting price through media hype and/or direct/indirect price manipulation, are quite possibly the largest in financial history.

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Enhanced Oil Recovery (EOR) in the U.S. is Poised to Pressure OPEC

Date: 14 July 2015

What OPEC countries fear most is a follow-up technological revolution that will lead to a second oil boom in the U.S., and that fear is now being realized.  A technological revolution spurred the U.S. oil boom that resulted in the greatest increase in domestic oil production in a century.  While that has stuttered in the face of a major oil price slump and an OPEC campaign to maintain a grip on market share, the American response could be another technological revolution that demonstrates that the first one was merely an impressive embryonic experiment.

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The Power and Consequences of EIA Oil Data

Date: 29 June 2015

In the latest weekly production data from the EIA, on the back of recent March revisions, the U.S. managed to post a 76,000 barrel per day increase in the lower 48. Production from Alaska fell by 61,000 barrels per day, putting overall U.S. output 15,000 barrels per day higher for the week ending June 12 compared to the previous week.

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Shining a Light on Buffett's Solar Bet

Date: 26 June 2015

During the late innings of the ICE-age (as in the Internal Combustion Engine-age), it has become clear that feeding gasoline and diesel to the next billion new cars is not going to be easy, or cheap. In China alone, 500 million new vehicles expect to jam the roads between now and 2030.  That may sound far-fetched but considering annual sales have already made it to 25 million units per year (vs. around 17 million in the U.S. – China became the top market in 2009), it only requires a 4 percent growth rate to reach that target in fifteen years.

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E&P Companies Staring at a Potentially Smaller Oil Patch Via Consolidation

Date: 24 June 2015

As stated previously, asset monetization by small E&P operators will start in earnest in the second half of this year out of cash flow necessity. Most, if not all, smaller market capitalization companies, public or private, are still free cash flow negative (operating cash flow less capital expenditure) and only a few of the larger ones are now, or will be, based on guidance. The point is, with volumes languishing (and probably poised to decline) tied to a flat oil futures price curve and with economics marginal at $60 per barrel, many E&P operators find themselves running through hedges in 2015 and still in need to finance their already reduced capital spending.

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Could the Super Bowl Use That Much Energy?

Date: 22 June 2015

In the pantheon of American culture, no event is more iconic and distinctly American than the Super Bowl. Like all things American, the Super Bowl is huge, expensive, and a source of incredible passion for fans. Just running a 30-second commercial to the more than 100 million people that watch the game costs nearly $5 million.

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Could $60 per Barrel Mean that the Worst is Over for Oil?

Date: 16 June 2015

The fallout of the collapse in oil prices has many side effects apart from the decline of rig counts and oil flows.  Oil production in North Dakota has exploded over the last five years, from negligible levels before 2010 to well over a million barrels per day, making North Dakota the second largest oil producing state in the country.

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Canadian Arctic Shale Likely Not All Its Fracked Up To Be

Date: 11 June 2015

The financial pages of Canadian newspapers have been full of headlines lately announcing the potential of two large shale oil fields in the Northwest Territories said to contain enough oil to rival the Bakken Formation of North Dakota and Montana. 

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Oil and Gas Export Reliance Makes a Huge Target for Financial Warfare

Date: 7 June 2015

In the age of derivatives, swaps, and electronic money transfers, a new form of warfare has emerged, financial warfare.  Recently, the US has passed sanctions on countries such as Syria, Venezuela, and North Korea, but the majority of energy related sanctions passed have been targeted at Iran and Russia.

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The Rebound in Oil Prices is Creating Optimism Among Drillers

Date: 20 May 2015

Oil prices have rebounded strongly since March. The benchmark WTI prices soared by more than 36 percent in two months, and Brent has jumped by more than 25 percent. There is a newfound bullishness in the oil markets – net long positions on Brent crude have hit multi-year highs in recent weeks on a belief that US supply is on its way down. 

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