It appears that a warm winter lowered demand for heating oil; US refiners saw a lull in demand that's allowed them to refine copious quantities of gasoline and other refined products like jet fuel. The US is extremely well supplied with these refined products in the short term and demand is unlikely to pick up until the summer driving season gets underway. There's more scope for a drop in refined products pricing. Read More
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Based on today's low, the index has now corrected about 13.5 percent off the January high. This back-of-the-envelope calculation suggests that there could still be room for more downside. However, it's also important to note that each of these corrections, while scary each time, eventually proved to be outstanding buying opportunities; I expect that will be the case this time around as well. But that big opportunity is still some time away. Read More
Bunge and American Commercial Lines both reported their quarterly earnings today. Bunge missed their fourth quarter estimates by about five cents and then proceeded to guide slightly higher for 2006. The stock did not react well to this news despite the improved guidance, falling approximately 5 percent on the session. Based on my analysis of the call and release, I’m not changing my recommendation. American Commercial Lines actually outperformed their estimates, and shot higher about 8 percent on the session. Read More
On January 31, Cameco announced that it missed fourth quarter earnings estimates due to higher than expected exploration and administration expenses, causing the stock to go off roughly 10 to 12 percent since that time. Whenever I see a selloff of that magnitude in a portfolio stock, it’s worth taking a closer look at the results. But based on my analysis, I see no reason to change my bullish opinion on the stock. Read More
As most subscribers are already aware, I’ll be speaking at the World Money Show in Orlando next week (February 1 through 4). I’ve already received e-mail from several subscribers who’ll be attending and I look forward to meeting you there. I’d also like to extend an invitation to all subscribers… Read More
A wrapup of 2005 which examines the performance of The Energy Strategist's key investment themes as well as some of the individual recommendations. Read More
Coal miners can be very profitable if you are selective in your investments. Some are facing increased operational costs as the level of complexity rises with their aging mines and their skilled employees begin retiring. However, those operations that are able to utilize strip-mining techniques, especially in the Powder River Basin (PRB), are relatively low cost and profitable. Also, having to transport the coal from the PRB creates profitable plays in the railroads. Read More
Back in 1965, Saudi Arabia produced less than 2.3 million barrels of crude oil per day, roughly a quarter of what the US was supplying at the time. In fact, 40 years ago, the Desert Kingdom was far from the key supplier it is today--the country’s production accounted for less than 7 percent of the global total. By 1975, the Saudis were already pumping more than 7 million barrels per day and in 1980 the Kingdom’s prolific fields were flowing more than 10 million barrels per day. However, with its aging fields, more advance technology will have to be deployed to ensure production keeps up with demand. Read More
The world’s energy producers are in the midst of a major crunch--demand for oil and gas is rising rapidly while the producers simply aren’t finding new reserves to replace current production. Moreover, cost pressures are building in the group, a function of a shortage of workers and rising raw materials costs. This will be a boon to oil services and infrastructure companies as the pace of exploration increased and more advanced drilling and well technologies are deployed. Read More
Publicly traded master limited partnerships (MLPs) can hand investors high tax-advantaged yields, outstanding growth opportunities and relatively low exposure to volatile oil and gas prices. MLPs are traded right on the major US exchanges just like common stocks. And the better-placed MLPS offer annual distribution growth (payout increases) of 5 to 10 percent on top of yields between 6 and 8 percent. Read More