Money and Finance
There's been plenty written already about the decline in oil prices over the last 9 months or so. The per barrel price of oil has declined from $98.70 in June 2014 to $51.77 as of Friday's close. That's a 47.5% decline from the peak last year. This has caused plenty of investors to worry about the viability of the oil and gas sector for investment. Exploration and production companies have announced declines in capital expenditures around 15% and there's a high likelihood of more to come.
We haven't begun to really see the effect on earnings for the integrated majors yet, but will start to see the results later this month when both ExxonMobil (XOM) and Chevron (CVX) report Q1 earnings. For the integrated oil and gas majors this isn't the first decline in oil prices that they've had to navigate through.
Oil, like most commodities, is a rather cyclical beast. In 2002 we saw a cyclical trough that brought the price of oil down to $15.89. The subsequent peak in 2008 saw the price of oil increase to $128.08. The Great Recession brought about another trough in 2009 which saw prices of $34.14 and the last peak was in 2011 at $108.80. Per barrel oil prices are sourced from the U.S. Energy Information Administration website which be found here.
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- Links
Jeremy Grantham Divines Oil Industry's Future (LINK) [Excerpt from his letter.] The simplest argument for the oil price decline is for once correct. A wave of new U.S. fracking oil could be seen to be overtaking the modestly growing global oil demand....
- Hussman Weekly Market Comment: Restoring The "virtuous Cycle" Of Economic Growth
Link to: Restoring the "Virtuous Cycle" of Economic GrowthIn a healthy economy, the productive activity of one sector opens a vent for the productive activity of other sectors of the economy. The useful allocation of resources in one area of the...
- Weekly Roundup - March 19, 2016
Well another week gone and another week home. Even though oil prices have been climbing higher I haven't seen an uptick on the exploration side. Although I don't really expect to see too much of an increase because even in the high $30's/low...
- Weekly Roundup - September 13, 2014
Another week has come and gone. How do the days keep flying by so fast? All the more reason to reach financial independence as early as possible and start to recapture some of the ever-fleeting time that we have. With no appointments this week that...
- Another Buy
Well the markets continued their difficult start to the year by selling off again to end January. They started off really bad to start the day with the DJIA dropping over 200 points before clawing it's way back to just a 100 point loss and closing...
Money and Finance
This Too Shall Pass: Investment in the Integrated Oil Majors
There's been plenty written already about the decline in oil prices over the last 9 months or so. The per barrel price of oil has declined from $98.70 in June 2014 to $51.77 as of Friday's close. That's a 47.5% decline from the peak last year. This has caused plenty of investors to worry about the viability of the oil and gas sector for investment. Exploration and production companies have announced declines in capital expenditures around 15% and there's a high likelihood of more to come.
We haven't begun to really see the effect on earnings for the integrated majors yet, but will start to see the results later this month when both ExxonMobil (XOM) and Chevron (CVX) report Q1 earnings. For the integrated oil and gas majors this isn't the first decline in oil prices that they've had to navigate through.
Oil, like most commodities, is a rather cyclical beast. In 2002 we saw a cyclical trough that brought the price of oil down to $15.89. The subsequent peak in 2008 saw the price of oil increase to $128.08. The Great Recession brought about another trough in 2009 which saw prices of $34.14 and the last peak was in 2011 at $108.80. Per barrel oil prices are sourced from the U.S. Energy Information Administration website which be found here.
Read more »
- Links
Jeremy Grantham Divines Oil Industry's Future (LINK) [Excerpt from his letter.] The simplest argument for the oil price decline is for once correct. A wave of new U.S. fracking oil could be seen to be overtaking the modestly growing global oil demand....
- Hussman Weekly Market Comment: Restoring The "virtuous Cycle" Of Economic Growth
Link to: Restoring the "Virtuous Cycle" of Economic GrowthIn a healthy economy, the productive activity of one sector opens a vent for the productive activity of other sectors of the economy. The useful allocation of resources in one area of the...
- Weekly Roundup - March 19, 2016
Well another week gone and another week home. Even though oil prices have been climbing higher I haven't seen an uptick on the exploration side. Although I don't really expect to see too much of an increase because even in the high $30's/low...
- Weekly Roundup - September 13, 2014
Another week has come and gone. How do the days keep flying by so fast? All the more reason to reach financial independence as early as possible and start to recapture some of the ever-fleeting time that we have. With no appointments this week that...
- Another Buy
Well the markets continued their difficult start to the year by selling off again to end January. They started off really bad to start the day with the DJIA dropping over 200 points before clawing it's way back to just a 100 point loss and closing...