Low Coal Prices Are Tearing into Corporate Balance Sheets

It’s not just the low price of oil that’s causing trouble. Coal companies too are being ravaged by low prices.
The slide in oil prices has raised speculation that oil companies in the U. S. could be forced to cut back on production, but a market slump in another commodity is also putting pressure on producers.
Coal markets are currently experiencing a supply glut that is showing no signs of recovery. Mining companies drew up plans for billion-dollar projects in the mid-2000s, when commodity prices were on the upswing. With many of those projects now coming online, coal production is rising.
BHP Billiton, an Australian mining giant, just opened a $3.4 billion mine in Queensland, which will add 5.5 million tonnes of coal capacity per year to the global market. The mine allowed BHP Billiton to push its production to record levels. Australian Prime Minister Tony Abbott was on hand for the ribbon-cutting ceremony, where he proclaimed ‘coal is good for humanity.’
Related: Australia’s Energy Policy Is Simple. Listen To The UN And Do The Opposite
Whether or not that’s true, it’s clear that the markets are not being good to coal. BHP Billiton is adding a new ‘world class’ mine, but other mines in Australia are shutting down or laying off workers because of low prices and weak demand. According to Reuters, a third of Australia’s mining sector is operating at a loss, choosing to keep operations going while waiting for sunnier days.

This post was published at Wolf Street By Nick Cunningham, Oilprice.com ‘ October 25, 2014.

Ebola Travel Ban, Ebola Czar Fear-Overpopulation, Financial War against Russia, Canada Terror Attack

The following video was published by Greg Hunter on Oct 23, 2014
Another week, another Ebola infection and still no Ebola travel ban. This time, in crowded New York City. This after the government declared ‘U. S. Ramps up Fight on Ebola.’ This time, a young American doctor who returned after treating Ebola victims in West Africa. I cannot believe we do not have a travel ban and/or mandatory quarantine and testing for everyone coming from West Africa. It seems too stupid to be stupid to ‘keep track’ of people when we could just stop people from coming here, and we would not have to ‘keep track’ of them.
Terror, terror everywhere in North America. The only difference is that, in Canada, they call it Islamic terror. In the U. S., they call it work place violence. You heard about the guy who took an ax to some New York City Cops. They shot the ax attacker dead, but not before he hurt some police.
Good news at the gas pump as prices are going down. How long is that going to last? Saudi Arabia has finally cut production to prop up oil prices. It’s not all good news as shale oil needs a price of $85 a barrel to turn a profit. That business could come crashing down as it is highly leveraged. Also, it’s is not all supply and demand causing the prices of crude oil to fall. It is financial war by the U. S. and the West to punish Russia over Ukraine.


Theater production depicts armed siege on Aussie Parliament
The day after a gunman attacked the Canadian Parliament in Ottawa, the Australian government is facing increasing criticism over its funding of a theater production entitled ‘Kill Climate Deniers’ which depicts an armed siege on the Australian Parliament carried out by eco-terrorists.
Authors of the production are set to receive a $19,000 government grant, via the ACT Arts Fund, to stage the play.
While the production company initially revealed that the plot centered around environmentalists breaking into a ‘major institution,’ and demanding, ‘immediate cessation of all carbon emissions and the immediate transformation of the Australian economy away from any reliance on fossil fuels,’ it later emerged that the storyline depicted ‘an armed siege of the Australian Parliament by a group of eco-terrorists.’
Commentator Andrew Bolt labeled the government’s funding of the play an ‘outrage,’ asserting the production exemplified how, ‘The left is the natural home of the modern totalitarian – and of all those who feel entitled by their superior morality to act as savages.’
The production’s authors denied that they were advocating violence in pursuit of drawing attention to claims of man-made climate change, although some of the material on the Aspen Island Theater Company’s website (now removed) seemed to suggest otherwise.

This post was published at Info Wars by PAUL JOSEPH WATSON | OCTOBER 23, 2014.

Low Oil Prices Hurting U.S. Shale Operations

Slumping oil prices are putting pressure on U. S. drillers.
The number of active rigs drilling for oil and gas fell by their most in two months, according to the latest data from oil services firm Baker Hughes. There were 19 oil rigs that were removed from operation as of Oct. 17, compared to the prior week. There are now 1,590 active oil rigs, the lowest level in six weeks.
‘Unless there’s a significant reversal in oil prices, we’re going to see continued declines in the rig count, especially those drilling for oil,’ James Williams, president of WTRG Economics, told Fuel Fix in an interview. ‘We could easily see the oil rig count down 100 by the end of the year, or more.’
Baker Hughes CEO Martin Craighead predicted that U. S. drilling companies could begin to seriously start removing rigs from operation if prices drop to around $75 per barrel. Some of the more expensive shale regions will not be profitable at current prices. For example, the pricey Tuscaloosa shale in Louisiana breaks even at about $92 per barrel.
But that also reflects the high costs of starting up a nascent shale region.
[Read: Plunging Oil Prices a Game-Changer for Major Pipeline Projects] Much of the shale basins that are principally responsible for America’s oil production will not feel the effects of low prices as quickly as many are predicting.
Better-known shale formations, such as the Eagle Ford in South Texas, can break even at much lower prices. That’s because exploration companies have become familiar with the geology and fine-tuned drilling techniques to specific areas.

This post was published at FinancialSense on 10/22/2014.

“Saudi’s Policy Of Downplaying Oil Prices Will Backfire On Them”

Saudi Arabia wants to use lower oil prices to pressure Russia to change its stance on Syria, to antagonize Iran, and to force US shale gas out of the market, Pepe Escobar explains the possible blowback…
Via RT,
RT: Russia’s economy is surely being hit by the falling oil prices. But what about other oil producers like the OPEC states?
Pepe Escobar: A lot of people are being hurt. There are more or less 20 nations that need oil at least for 50 percent of their budget. Among these nations we’ll find especially a mix of African countries and Persian Gulf countries, that includes Saudi Arabia and Iraq as well, Venezuela and Ecuador. So it’s very complicated, it’s not only to hurt Russia…
RT: Saudi Arabia is one of the OPEC members and it is supposed to collaborate its oil price policy with other members. Why it is acting like this?

This post was published at Zero Hedge on 10/21/2014.

21/10/2014: Russian Gas, European Deliveries, Ukrainian Blackmail?

Over recent days there have been plenty of statements about the winter supplies of Russian gas to Europe. Majority of these fall to one side of the argument, alleging that Russia is likely to cut off gas shipments to Europe via Ukraine.
Here are the facts, strongly indicating an entirely different possibility.
Fact 1: Allegations. At the end of August, Euractive reported that “Europe faces the increasing threat of a disruption to gas supplies from its main provider Russia this winter due to the crisis in Ukraine.” (link)
But when you read beyond the headline, you get something entirely different. “Ukrainian Prime Minister Arseny Yatseniuk said today (27 August) Kyiv knew of Russian plans to halt gas flows this winter to Europe. “We know of Russia’s plans to block [gas] transit even to European Union countries this winter, and that’s why their [EU’s] companies were given an order to pump gas into storage in Europe as fully as possible,” he told a government meeting, without disclosing how he knew about the Russian plans.”
So Yatsenyuk presented a conjecture – that incidentally boost his own agenda. Media reported it with zero questioning. Meanwhile, Russian officials denied the possibility of such disruption: “It’s unlikely that Russia would cut gas supplies. Ukraine will start siphon off it itself, as it has been the case in the past,” a senior source at the Russian Energy Ministry said.”
We have set the stage: Ukraine says Russia may disrupt supplies. Russia says Ukraine may siphon off gas destined for other buyers in order to satisfy its own needs.

This post was published at True Economics on October 21, 2014.

A Caliph In A Wilderness Of Mirrors

I’m aiming at you, lover Cause killing you is killing myself – Orson Welles (director), The Lady from Shanghai,1947
He’s invincible. He beheads. He smuggles. He conquers. He’s the ultimate jack-of-all-trades. No Tomahawk or Hellfire can touch him. He always gets what he wants; in Kobani; in Anbar province; with the House of Saud (which he wants to replace) trying to make Putin (who he wants to behead) suffer because of low oil prices.
If this was a remake of Orson Welles’s noir classic The Lady from Shanghai, in the mirror sequence the lawyer (American?) and the femme fatale (Shi’ite?) would also get killed; but The Caliph of Islamic State would survive as a larger than life Welles, free to roam, plunder and “give my love to the sunrise” – as in a Brave Caliphate World shining in “Syraq” over the ashes of the Sykes-Picot agreement.
He’s winning big in Iraq’s Anbar province. The Caliph’s goons are now closing in on – of all places – Abu Ghraib; Dubya, Dick and Rummy’s former Torture Central. They are at a mere 12 kilometers away from Baghdad International. A shoulder-launched surface-to-air missile (or MANPAD) away from downing a passenger jet. Certainly not an Emirates flight – after all these are trusted sponsors.
Hit, in Anbar province, is now Caliph territory. The police forces and the province’s operational command have lost almost complete control of Ramadi. The Caliph now controls the crucial axis formed by Hit, Ramadi, Fallujah; Highway 1 between Baghdad and the Jordanian border; and Highway 12 between Baghdad and the Syrian border.
The Caliph’s goons are no less than taking over the whole, notorious Baghdad belt, the previous “triangle of death” in those hardcore days of American occupation circa 2004. Message to Donald Rumsfeld: remember your “remnants”? They’re back. And they’re in charge.

This post was published at Zero Hedge on 10/20/2014.

Houston, We Have A “Fracking” Problem

“First, the development of the ‘shale oil’ production over the last five years has caused oil inventories to surge at a time when demand for petroleum products is on the decline as shown below.”

“The obvious ramification of this is a ‘supply glut’ which leads to a collapse in oil prices. The collapse in prices leads to production ‘shut ins,’ loss of revenue, employee reductions, and many other negative economic consequences for a city dependent on the production of oil.
Secondly, I have also discussed that the ‘fracking miracle’ may not be all that it is believed to be due to fast production decline rates and massive amounts of leverage. Just recently Yves Smith posted an article discussing this very issue stating:”
‘The oil and gas sector is capital intensive. Drillers have borrowed phenomenal amounts of money, which was nearly free and grew on trees, to acquire leases and drill wells and install processing equipment and infrastructure. Even as debt was piling up, the terrific decline rates of fracked wells forced drillers to drill new wells just keep up with dropping production from old wells, and drill even more wells to show some kind of growth. One heck of a treadmill. Funded in part by junk debt.
Junk bond issuance has been soaring as the Fed repressed interest rates and caused yield-hungry investors to close their eyes and take on risks, any risks, just to get a teeny-weeny bit of extra yield. Demand for junk debt soared and pushed down yields further. And even within this rip-roaring market for junk bonds, according to Bloomberg, the proportion issued by oil and gas companies jumped from 9.7% at the end of 2007 to 15% now, an all-time record.’
I received many emails on those comments that deserved a response and/or further clarification.
As with all things, the question of oil prices is nothing more than a supply/demand issue. As shown above, the sharp increase in production brought on by “fracking” has certainly been quite remarkable. However, this remarkable resurgence in oil production currently faces two extremely strong headwinds. The total amount of available refining capacity and the level of end demand are both declining.
While the “fracking miracle” has boosted the production of raw crude in recent years, such production is only useful if you can convert the base commodity into a useful byproduct. The problem, as shown in the two charts below, is that the the number of operating refineries has continued to fall, as the regulatory environment has stifled the ability to build new plants, and operating plants are already running near full capacity.

This post was published at StreetTalkLive on 20 October 2014.

Why Moody’s Cut Russia to Two Notches above Junk

It was not the most productive summit in the history of mankind. President Vladimir Putin, after watching a military parade in Belgrade, Serbia, and questioning Kosovo’s independence, arrived in Milan on Friday so late that Chancellor Angela Merkel, with whom a private meeting had been scheduled, had to cool her heels for hours. Once done with that meeting, at 2 a.m., he headed over to his buddy’s place, persona non grata in EU politics, Silvio Berlusconi. But the Russian economy was not amused.
Russians know that the ruble is in trouble, and are not so nave to think that their currency will start to strengthen again soon. Countless factors point in favor of further depreciation, not least the inability of Russian entities to borrow from international markets, recent marked falls in oil prices, and expectations of future US rate hikes…. Government estimates that capital flight is likely to reach between $90-120 billion this year look too conservative to us.
[A]s ever with Russia, there are countless risks. What if capital flight accelerates to rates well beyond expectations to generate genuine unease about the adequacy of the CBR’s [Central Bank of Russia] reserves? What if the ruble is completely irresponsive to interest rate hikes, and simply depreciates rapidly further beyond the CBR’s comfort zone, fueling a jump in inflation into double digits? And what if companies, already unable to borrow from international markets because of sanctions, struggle to meet debt repayments? And – perhaps most obviously – what if the geopolitical situation, which is well beyond the control of the CBR, further deteriorates?You get the point.
That’s how Daiwa Capital Markets pegged the situation about a week ago. In short, every unit of foreign currency that isn’t nailed down is being yanked out of Russia.

This post was published at Wolf Street by Wolf Richter ‘ October 19, 2014.

North Korea in grip of leadership tension

North Korean leader Kim Jong-eun's extended absence from public view opened a flood gate of rumors. It went from a military coup to broken ankles, with gout, diabetes and obesity also mentioned. International concern with Kim's absence was justified, given the immense power this 31-year-old leader inherited from his father, Kim Jong-il, who passed away in December 2011.
An objective assessment of Kim's dismal performance during the past two-and-one-half years is compelling: North Korea has become a more isolated and despised nation. The missile launches, nuclear test, threats of a pre-emptive nuclear attack, the brutal execution of his uncle, Jang Song-thaek, and the routine vitriol coming out of Pyongyang all contributed to North Korea's pariah status.
Thus the initial hope that this young leader would move North Korea in a more positive direction gave way to despair, when North Korea assumed a more strident and belligerent attitude; an attitude that alienated its leadership from all countries, including China. It would not have been unreasonable to assess that this period of failed leadership was the catalyst for a military coup by those seniors in North Korea who wanted to reverse this negative trajectory; who wanted North Korea to engage economically with the international community and have United Nations sanctions lifted. Indeed, it could have been those in North Korea who wanted to re-establish North Korea's special relationship with a China that provides North Korea with the crude oil, aviation fuel and food aid necessary for the well-being of the country.

This post was published at Asia Times

Russian Foreign Minister Lavrov speaks to the World – Paul Craig Roberts

Dear Readers, I now have for you the complete English transcript of Russian Foreign Minister Sergey Lavrov’s speech to the United Nations. Lavrov’s speech, together with President Putin’s remarks in his Serbian press conference (excerpts posted on this site) clearly indicate that the moral leader of the world is Russia, not Washington.
The Russians have come out of tyranny as America descends into tyranny. Washington’s barbarity in the world is unprecedented. For 13 years Americans have permitted their government to bomb women, children and village elders in seven countries based entirely on lies and the selfish interests of the ruling elite. Washington has spewed depleted uranium everywhere, causing massive birth defects and health problems. We must remember that Washington is the only government that dropped nuclear weapons on helpless civilian populations. The victims were Japanese when the Japanese government was trying to surrender.
Putin’s warning to the White House Fool that humanity’s existence requires that Obama ‘remember what consequences discord between major nuclear powers could bring for strategic stability’ is a pointed demand that the White House Fool halt Washington’s aggression toward Russia. We have had enough, Putin said. We are a patient people, but we are running out of patience with your idiocy.
It is not ebola but Washington that is a plague upon the world. Washington has declared itself to be above both the US Constitution and International Law. Washington has destroyed the sovereignty of Great Britain, all of Europe, and Japan and permits none of the countries in its empire of captive nations to have a foreign policy independent of Washington. Europe and Japan are nothing but punk puppet states whose ‘leaders’ are well paid for their subservience to Washington.
Insouciant Americans are told that as they are the exceptional, indispensable people, their government has a right to be unaccountable to law. Law is what Washington imposes on others. Washington’s hegemony over others is the right of the ‘exceptional nation.’ No other country counts or has any rights.
Russia and China disagree with Washington. Russia formed between the third and eighth centuries and reformed after the Mongol invasion. China has been around for five thousand years. The US is 238 years old, and judging by its behavior remains a two-year old.
Here is Lavrov speaking for Russia to the world. No one in the US government is capable of giving such a speech. The speech follows after these excerpts:
‘Attempts to put pressure on Russia and to compel it to abandon its values, truth, and justice have no prospects whatsoever for success.’
‘The [US] policy of ultimatums and the philosophy of supremacy and domination do not meet the requirements of the 21st century, and run counter to the objective process of developing a polycentric and democratic world order.’

This post was published at Paul Craig Roberts on October 17, 2014.

Thomas L. Friedman: a Pump War?

Is it just my imagination or is there a global oil war underway pitting the United States and Saudi Arabia on one side against Russia and Iran on the other? One can’t say for sure whether the American-Saudi oil alliance is deliberate or a coincidence of interests, but, if it is explicit, then clearly we’re trying to do to President Vladimir Putin of Russia and Iran’s supreme leader, Ayatollah Ali Khamenei, exactly what the Americans and Saudis did to the last leaders of the Soviet Union: pump them to death — bankrupt them by bringing down the price of oil to levels below what both Moscow and Tehran need to finance their budgets.
Think about this: four oil producers — Libya, Iraq, Nigeria and Syria — are in turmoil today, and Iran is hobbled by sanctions. Ten years ago, such news would have sent oil prices soaring. But today, the opposite is happening. Global crude oil prices have been falling for weeks, now resting around $88 — after a long stretch at $105 to $110 a barrel.
The price drop is the result of economic slowdowns in Europe and China, combined with the United States becoming one of the world’s biggest oil producers — thanks to new technologies enabling the extraction of large amounts of “tight oil” from shale — combined with America starting to make exceptions and allowing some of its newfound oil products to be exported, combined with Saudi Arabia refusing to cut back its production to keep prices higher, but choosing instead to maintain its market share against other OPEC producers. The net result has been to make life difficult for Russia and Iran, at a time when Saudi Arabia and America are confronting both of them in a proxy war in Syria. This is business, but it also has the feel of war by other means: oil.
The Russians have noticed. How could they not? They’ve seen this play before. The Russian newspaper Pravda published an article on April 3 with the headline, “Obama Wants Saudi Arabia to Destroy Russian Economy.” It said: “There is a precedent [for] such joint action that caused the collapse of the U.S.S.R. In 1985, the Kingdom dramatically increased oil production from 2 million to 10 million barrels per day, dropping the price from $32 to $10 per barrel. [The] U.S.S.R. began selling some batches at an even lower price, about $6 per barrel. Saudi Arabia [did not lose] anything, because when prices fell by 3.5 times [Saudi] production increased fivefold. The planned economy of the Soviet Union was not able to cope with falling export revenues, and this was one of the reasons for the collapse of the U.S.S.R.”

This post was published at NY Times

The Most Dangerous Market Since 2008

Autumn Blues The Dow ended the session down 173 points On Thursday, after falling more than 300 points during the day.
Press reports told us that investors were worried about weak US consumer sales and falling producer prices. Combined with falling crude oil prices, these make it look as though a European-style slump is coming to the whole world. But what did you expect?
It is autumn. The days dwindle down … life closes in on you. It comes as a shock. Like when you turn 60 and you suddenly realize that you are … alas … mortal.
You will not make an infinite amount of money in your lifetime; in fact, you’ve already made most of what you’re likely to make. You will not drink an infinite number of martinis… or have an infinite number of friends… or hear an infinite number of concerts.
Au contraire, the numbers in your life are limited… and probably already undergoing some shrinkage. Your height. Your savings. The years left to you … the number of times you’ll get sick or fall down drunk.
They’re all getting smaller. Then you have to think more carefully about what you’re going to do with the numbers you’ve got left.

Saint Petersburg
(Photo credit: fmh)

This post was published at Acting-Man on October 17, 2014.

Is The Ebola Crisis The October Surprise? – Episode 494

The following video was published by X22Report on Oct 16, 2014
Italy and France are looking for economic opportunities to get out of debt. Home builder sentiment is declining. Foreclosures picking up in 10 states. FED looking to continue QE. Ebola workers did not wear protective closing with Thomas Duncan. CDC confused in protocols, information and Ebola. FEMA conducting pandemic drills in 2013-2014. Russia will reduce gas supplies to Europe if Ukraine siphons gas. Gulf states are putting together a navy to counter Iran. Russia will not cooperate with U. S.on the Islamic State unless UN approves the coalition. FBI now warning Chinese are getting ready to cyber attack the U. S.

Oil Price Crash Could Push Venezuela Over The Edge

Sliding oil prices are putting enormous pressure on oil producers around the world.
Saudi Arabia has insisted it is willing to live with lower prices for quite a while as it seeks to maintain a grip on its market share. Kuwait also indicated its willingness to slash prices in order to keep output level. That sent oil prices lower on Oct. 14, as the markets reacted with a bit of surprise to the unwavering stance by OPEC’s leading members: WTI dropped 4.5 percent.
Lower oil prices are putting a strain on all producers, including Saudi Arabia, but Riyadh is hoping that the economic pain will be much greater for some of its competitors. That includes U. S. shale producers, which have higher average production costs.
In fact, an estimated 2.8 percent of total worldwide oil production could become unprofitable if oil prices drop below $80 per barrel, according to a new report from the IEA. Canadian oil sands projects topped the list, but U. S. shale might not be far behind.
But while Saudi Arabia tests the mettle of North American producers, it could be Venezuela that is the most vulnerable. As a fellow OPEC member, Venezuela has been the most vocal about the need to cut oil production and has called for an emergency meeting of the 12-member oil cartel. That is because Venezuela is in a much weaker position than many of the other member countries, and the recent drop in prices has raised alarm in Caracas.

This post was published at Wolf Street on October 16, 2014.

Vladimir Putin Responds To Obama’s ‘Hostile’ Acts: Warns of Nuclear Consequences

When the leadership of North Korea or Iran suggests a nuclear attack against the United States the threat is usually dismissed as mere posturing by extremist regimes.
But when the President of a global military super power like Russia makes such a threat, then perhaps it’s time to start paying attention.
In an interview with Serbia’s Politika newspaper Vladimir Putin did not mince words about his feelings surrounding the recent sanctions against his country’s economy and monetary system. He believes the actions of Europe and the United States to be hostile acts and he warns that Russia is prepared to go all the way if the hostilities continue.
It’s futile for the U. S. and its allies to ‘blackmail’ Russia over the Ukraine crisis, President Vladimir Putin said in a newspaper interview today.
Russia’s partners should remember the risks involved in disputes between nuclear powers, Putin said.
He accused Barack Obama of adopting a ‘hostile’ approach in naming Russia as a threat to the world in the U. S. president’s speech to the United Nations General Assembly on Sept. 24.

This post was published at shtfplan on October 16th, 2014.

Falling Oil Prices Could Push Venezuela Over The Edge

“There is nothing good to say about the state of Venezuela’s economy, and this isn’t helping,”warns Danske’s Lars Christensen as tumbling prices for Venezuela’s oil are threatening to choke off funds (oil is 95% of exports) needed to pay debt.. and that is clear from the collapse of bond prices. The Maduro government desperately needs a rise in oil prices, but Saudi Arabia has so far rebuffed calls for an emergency meeting as it pursues a strategy of waiting out higher cost competitors. OPEC does not plan on meeting until Nov. 27. That is an eternity for a country that is beginning to unravel.

Submitted by Nick Cunningham via OilPrice.com,
Oil prices continue to slide, putting enormous pressure on oil producers around the world.
Saudi Arabia has insisted it is willing to live with lower prices for quite a while as it seeks to maintain a grip on its market share. Kuwait also indicated its willingness to slash prices in order to keep output level. That sent oil prices lower on Oct. 14, as the markets reacted with a bit of surprise to the unwavering stance by OPEC’s leading members: WTI dropped 4.5 percent.

This post was published at Zero Hedge on 10/16/2014.

Vladimir Putin Reminds Obama That Sowing Discord Between Nuclear Powers Can Undermine Strategic Security

In an interview today with Politika, a Serbian newspaper, Russia’s president, Vladimir Putin, said that it is futile and dangerous for the US and its European puppets to blackmail Russia and that the Exceptional Nation and its vassals should consider the risks that are inherent in aggressive disputes between countries heavily armed with nuclear weapons. Putin noted that Obama took a hostile attitude toward Russia in Obama’s UN speech to the General Assembly on September 24 when Obama declared Russia to be one of the three threats to the world along with the Islamic State and ebola. President Putin said that unilateral and punitive actions taken against Russia can provoke a crisis, and that if Washington’s purpose is to’isolate our country, it is an absurd and illusory goal.’
Here are some of President Putin’s direct quotes:
‘How can we talk about de-escalation in Ukraine while the decisions on new sanctions are introduced almost simultaneously with the agreements on the peace process?’
‘Together with the sanctions against entire sectors of our economy, this approach can be called nothing but hostile.’

This post was published at Paul Craig Roberts on October 15, 2014.

XLE Rebounds

As you all know, crude oil and its products have been hammered of late. One has to wonder if the Saudis’ decision to not reduce output was a deliberate attempt to go after the US fracking industry. Either way, the energy complex has been hit extremely hard over the last six weeks. Just look at the following chart!

The XLE had lost 22% over that time frame before some decent buying finally showed up today which enabled it to close up on a day in which the entirety of the US equity markets were getting clobbered.

This post was published at Trader Dan Norcini on Wednesday, October 15, 2014.

U.S. bid for oil supremacy shakes crude market

Propelled by surging shale output, the United States is fighting for supremacy in the global oil market even as a pullback in crude prices threatens to challenge the boom.
The U.S., which only a few years ago seemed to be in the midst of an inexorable decline in domestic petroleum production, may have already overtaken other petroleum giants.
In terms of crude alone, the US pumped 8.8 million barrels a day in September, still a distance from Russia's 10.6 million barrels and Saudi Arabia's 9.7 million, according to official sources.
But when natural gas liquids are included, the U.S. extracted 11.5 million barrels in August, essentially level with OPEC kingpin Saudi Arabia, according to data from the International Energy Agency.

This post was published at France24