News and Commentary From

Say Goodbye to Cheap Gasoline
The wildfire in Canada and production outages around the world has erased the recent glut in daily production. Oil and gasoline prices are going to rise. Continue reading
Reality is Rapidly Approaching
The April 17th meeting in Doha Qatar is rapidly approaching and traders are finally starting to realize that even if there is an agreement it will be meaningless. Continue reading
Prices Cut Again
The Energy Information Agency cut its forecast for crude prices in 2016 and 2017 despite the recent short squeeze that lifted WTI to $38. Continue reading
Banks Taking Some Heat
JP Morgan opened a box of pain for the banking community this week after they said they were increasing their loan loss reserves for questionable energy loans. The financial sector crashed again on the disclosure. Continue reading
Saudi Kills the Limit
After a couple of days of higher oil prices the Saudi foreign minister killed the bullish sentiment before it could spread. Continue reading
No Deal
The oil ministers of Saudi Arabia and Venezuela met in Riyadh on Sunday. The Saudi minister, Ali al-Naimi, said he held "successful" talks on Sunday with his counterpart from Venezuela. In this case, successful did not mean productive. Continue reading
Russia Holds the Key to Prices
You probably witnessed the short squeeze in crude oil twice in the last three days. With fundamentals becoming increasingly bearish nearly every commodities trader was bearish. Continue reading
You know it is time to buy energy stocks when analysts begin to capitulate on the entire sector. Barrington analyst Rudolf Hokanson said current fundamentals are so badly flawed that any investment in the sector would be purely speculative. Continue reading
Oil or Water?
How far can you go on a bottle of water? If you do not have any water, your travel distance on foot is pretty limited. On a gallon of water, the average individual should be able to walk 25 miles in one day or about the same distance as you can travel on a gallon of gas in 30 minutes today in a modern car. Continue reading
Iran War with Saudi Arabia?
Last week Saudi Arabia executed 47 "terrorists" and enemies of the state. One of those enemies was Nimr al-Nimr, a leading Shiite cleric. Iran is not happy! Continue reading
OPEC Propaganda Scheme
Don't believe everything you read in the headlines. That is especially true if the source is OPEC or Saudi Arabia. Continue reading
Head Fake
Crude prices rallied +4% on Wednesday after the EIA inventory report showed a decline of -5.9 million barrels. That was the biggest decline in months but it does not represent reality. Continue reading
Worst Case Scenario
If you are an oil producer, you are facing a worst-case scenario today. Crude oil has declined to $35 and the outlook is worse than it has been in months. If you are bleeding cash at $40, you are not going to like the picture at $30. Continue reading
19 Million Barrels Missing
Energy investment bank, Tudor, Pickering, Holt & Company said the oil industry has deferred or cancelled about 150 projects that could unlock 125 billion barrels of oil over their lifetime. Continue reading
A Production Climax is Approaching
Active rigs declined -13 to 744 and the 13th consecutive weekly decline. Active oil rigs declined -9 to 555. Keeping production at the current level is going to become progressively harder as active rigs drop to a 15 year low. Continue reading
US Facing Oil Tsunami
There is a veritable wave of oil headed for America and it will push crude prices significantly lower. Middle Eastern countries are in a bidding war about who can sell oil the cheapest. Continue reading
Costs Down, Production Up
Oil producers are continuing to slash costs every quarter but they are still raising production. This has got to be OPEC's worst nightmare. Continue reading
Crude Prices Lower for Longer
Investors betting on a rebound in the price of oil better have a very long time horizon. Companies are still reporting increases in production despite slashing drilling expenses and laying off thousands of workers. Continue reading
Rusting Dinosaurs
When oil was $100 a barrel it barely made sense to spend billions of dollars to drill multiple wells and build a production platform to set on top of them. At $45 oil it makes zero sense. Continue reading
New Record Ahead
It is only a matter of time before U.S. oil inventories set a new 40-year high. Inventories increased last week by 7.8 million barrels and we are just getting started in the inventory season. Continue reading